Herc (HRI) Goldman Sachs Second Annual Leveraged Finance Conference summary

Cycle outlook

• Economic indicators supported a “middle innings” view of the cycle; ARA projected 3%-5% annual rental-industry growth over five years, with infrastructure spending potentially extending expansion.

Separation and liabilities

• Completing separation from Hertz remained the top priority; transition services covered front- and back-end IT, with completion expected as soon as possible but potentially extending to June 30, 2018.

• 2017 spin costs were expected at $25m-$26m and to decrease dramatically in 2018.

• Share of certain pre-spin litigation and liabilities was 15% under the separation and distribution agreement.

Fleet strategy and operations

• ProContractor and ProSolutions rose from ~15% of OEC in 2015 to ~18%; target is 25%-30% within five years, alongside shifts toward scissors, compact earthmoving and customer-preferred equipment.

• Five-year goal is to reach leading-peer financial metrics; average fleet age was 49 months, with small tools typically held four or five years and some larger equipment 10-12 years.

• Procurement combines branch and sales feedback with corporate purchasing; premium brands and equipment with stronger residual values inform fleet decisions.

• CapEx could be pared back in a downturn; spending would remain needs-based, prioritizing underperforming fleet rotation while operating cash flow supports the business.