Herc : Q4 2022 Earnings Call Presentation

Shifting Into High Gear

©2021 Herc Rentals Inc. All Rights Reserved.

Herc Rentals Team & Agenda

Larry Silber	Aaron Birnbaum	Mark Irion
President & Chief	Senior Vice President &	Senior Vice President &
Executive Officer	Chief Operating Officer	Chief Financial Officer

Agenda

• Safe Harbor
• 2022 Overview
• Q4 Operations Review
• Q4 Financial Review
• 2023 Outlook
• Q&A

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©2023 Herc Rentals Inc. All Rights Reserved.

Safe Harbor Statements and Non-GAAP Financial Measures

Forward-Looking Statements

This presentation includes forward-looking statements as that term is defined by the federal securities laws, including statements concerning our business plans and strategy, projected profitability, performance or cash flows, future capital expenditures, our growth strategy, including our ability to grow organically and through M&A, anticipated financing needs, business trends, the impact of and our response to COVID-19, our capital allocation strategy, liquidity and capital management, and other information that is not historical information. Forward looking statements are generally identified by the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "looks," and future or conditional verbs, such as "will," "should," "could" or "may," as well as variations of such words or similar expressions. All forward-looking statements are based upon our current expectations and various assumptions and, there can be no assurance that our current expectations will be achieved. They are subject to future events, risks and uncertainties - many of which are beyond our control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward- looking statements. Further information on the risks that may affect our business is included in filings we make with the Securities and Exchange Commission from time to time, including our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and in our other SEC filings. We undertake no obligation to update or revise forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

Information Regarding Non-GAAP Financial Measures

In addition to results calculated according to accounting principles generally accepted in the United States ("GAAP"), the Company has provided certain information in this presentation that is not calculated according to GAAP ("non- GAAP"), such as adjusted net income, adjusted earnings per diluted share, EBITDA, adjusted EBITDA, adjusted EBITDA margin, REBITDA, REBITDA margin, REBITDA flow-through and free cash flow. Management uses these non-GAAP measures to evaluate operating performance and period-over-period performance of our core business without regard to potential distortions, and believes that investors will likewise find these non-GAAP measures useful in evaluating the Company's performance. These measures are frequently used by security analysts, institutional investors and other interested parties in the evaluation of companies in our industry.

Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to similarly titled measures of other companies. For the definitions of these terms, further information about management's use of these measures as well as a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures, please see the appendix that accompanies this presentation.

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©2023 Herc Rentals Inc. All Rights Reserved.

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2022: An Exceptional Year of Growth

Rental Revenue		Total Revenues	Adjusted EBITDA¹
$ in millions	$2,552	$ in millions	$ in millions	$1,227
	$2,739

				$1,910	+34%					$2,073	+32%						$895	+37%
							$1,999
						$1,977
$1,658	$1,702										$741	$689
						$1,781				$685
	$1,544
2018		2019	2020	2021	2022	2018	2019	2020	2021	2022		2018	2019	2020	2021	2022
	Earnings Per Diluted Share				Adjusted EBITDA Margin¹				ROIC2
					$10.92						44.8%							10.8%
										43.2%						9.6%
				$7.37				37.1%	38.7%
					+48%					+160 bps			6.0%			+120 bps
					34.6%				5.4%
											5.2%

$2.39$2.51

$1.63

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

1. For a reconciliation to the most comparable GAAP financial measure, see the Appendix beginning on Slide 22
2. The company's ROIC metric uses after-tax operating income for the trailing 12 months divided by average stockholders' equity, debt and deferred taxes, net of average cash. To mitigate the volatility related to fluctuations in the company's tax rate from period to period, the U.S. federal corporate statutory tax rate of 21% was used to calculate after-tax operating income.

NYSE: HRI

©2023 Herc Rentals Inc. All Rights Reserved.

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2022: Exceptional Growth and Market Share Gains

Equipment rental market in NA grew ~11% in 2022

• Strong demand across all regions, equipment categories and key end markets
• Shift from equipment ownership to rental continues
• Supply chain constraints persist
• Ongoing industry rate discipline contributed to positive trends

HRI equipment rental revenue grew 34% in 2022

• Fleet investment focused on quality, capacity and diversity
• Specialty solutions continued double-digit growth
• Strategic acquisitions accounted for one-third of YoY growth
• Broad geographic network, relationships provide advantage on manufacturing and infrastructure projects
• Reputation and experience reinforced customer relationships
• Strong balance sheet offers capital flexibility
• Market share +100 bps YoY to >4%

NYSE: HRI

©2023 Herc Rentals Inc. All Rights Reserved.

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