Columbia Business School's Pershing Square Challenge

(NYSE: HTZ)

Richard Hunt '14 ([email protected]) Stephen Lieu '14 ([email protected]) Rahul Raymoulik '14 ([email protected])

Investment Thesis – Multiple Drivers of Value  We recommend investors buy Hertz (HTZ) stock with a target share price of $36.00, which represents ~52% upside from the current share price Four Main Points to Investment Thesis  The market significantly underestimates the impact of Hertz's recent merger with Dollar Thrifty, which marks the completion of a ten-year consolidation that dramatically improves the competitive dynamics of the industry  The market underestimates the levers Hertz can pull to counter the negative impact of falling used car prices

 Hertz has strong revenue growth opportunities in the U.S. and will realize significant revenue and cost synergies through its acquisition of Dollar Thrifty  Divestiture of non-core Equipment Rental business would unlock substantial value by deleveraging the balance sheet

As of 4/19/13; in USD m except per share data

Current Capitalization Stock Price Diluted Shares Outstanding (M) Market Cap Corporate Debt Cash Unfunded Pension Liability

Enterprise Value

$23.72 462.0 $10,959 6,545 (1,105) 227 $16,626

Trading Statistics 52-Week Range $10.22-$24.28 Dividend Yield 0.0% Avg. Daily Volume (M) 7.7 Short Interest as % of Float 11.0% Summary Valuation 2013e EV / Revenue 1.5x EV / EBITDA 7.4x P/E 12.5x

2014e 1.4x 6.4x 9.9x

2

Business Overview Business Description

Rental Locations

 Car Rental (2012 rev: $7.6bn): Operates through the Hertz, Dollar and Thrifty brands. Rents cars that the company owns or leases. Maintains a substantial network of car rental locations both in the United States and internationally, and the largest number of airport car rental locations in the world  Equipment Rental (2012 rev: $1.4bn): Operates through HERC brand. Rents a broad range of industrial, construction and material handling equipment. Also sells new equipment and consumables. One of the largest equipment rental companies in North America

 With the acquisition of Dollar Thrifty, the Company has over 10,000 locations across the United States and 17 other countries

Franchised / Licensee Total Locations

Revenue Breakdown Equip ment Rental 15%

Segment

Intl 1,215 304 911 150 1,365

Total 4,425 946 3,479 1,510 5,935 4,335 10,270

Geography Intl 30%

Car Rental 85%

Staffed rental locations Airport Off-airport Non-staffed locations Total Corporate

U.S. 3,210 642 2,568 1,360 4,570

United States 70%

International Countries Puerto Rico France U.S. Virgin Islands Germany Canada Italy Brazil Luxembourg Belgium Netherlands Czech Republic Spain

Slovakia United Kingdom China Australia New Zealand

3

Consolidation Improves Industry Competitive Dynamics Industry Consolidation

Focus Shifted to Profitability  Hertz's acquisition of Dollar Thrifty marks the completion of an industry consolidation that, over the past ten years, has gone from six separate rental car companies to only three today

100%

90% 80% 70% 60%

 The three remaining players now have incentive to focus on profitability instead of market share

50% 40%

Pricing Environment Already Improving

30%

20%

$65

10% $55

Enterprise Avis National / Alamo Other

Hertz Dollar / Thrifty Budget

2011

$45

2012

$35

2013

$25

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0%

4

Market Underestimates Improved Pricing Environment Overly Conservative Pricing Guidance

Strong Pricing Environment w/ Price Signaling

 Management's revenue and EPS guidance assumes no pricing growth  Sell-side analyst consensus estimates assume a 1% increase in pricing “On pricing, it's very conservative assumptions where we really don't try to assume any price increases in our models.” – Hertz CEO in April 2013

Impact of Pricing on Valuation  1% increase in U.S. RPD results in a 6% increase in share price Sensitivity to U.S. RPD Growth Y/Y 0.0% 1.0% 2.0% 3.0% 4.0% 2014e EBITDA $2,610 $2,734 $2,859 $2,985 $3,112 2014e EPS $2.44 $2.62 $2.79 $2.96 $3.14 Price Target $30.80 $32.88 $34.97 $37.08 $39.20 PT % Increase 6.8% 6.4% 6.0% 5.7%

“One of the headlines I'd like to make is we don't want to gain share by reducing price. We want to gain share by increasing value, and that's how we're doing it.” – Hertz CEO in April 2013 “We're seeing our competitors move for profitability, rather than share, and that has a positive impact on all of us.” – Avis CFO in February 2013 “We've been very aggressive in initiating price increases over the last 4 months or so and I think that's had a positive impact. And we've seen a fairly good matching of increases by both Hertz and the Enterprise.” – Avis CFO in March 2013

5.0% $3,239 $3.31 $41.34 5.4%

“We made a strategic decision to minimize our participation with less profitable commercial accounts.” – Hertz CEO in February 2013

5

Misunderstood Impact of Used Car Prices Non-Program Car Purchases Reduce Fleet Costs

Hertz Does Not Track Manheim Index Manheim Index

Hertz Residual Values

+10%

140 135 130 125 120

-3%

115

Sep-12

Aug-12

Jul-12

Jun-12

Apr-12

May-12

Feb-12

Mar-12

Jan-12

Dec-11

Oct-11

Nov-11

Sep-11

Jul-11

Aug-11

Jun-11

Apr-11

May-11

Mar-11

105

Jan-11

110

Feb-11

Manheim Used Car Value Index

145

 Sharp Decline in Program Car Purchases: Since 2006, the percentage of program cars purchased fell from 61% to just 19% today. Program cars are repurchased by car manufacturers for a specific price  Save 1% on auto purchase price  Allow for more profitable resale channels  Significant Shift Away from Auctions: Since 2009, auction sales fell from 88% of non-program car sales to just 33% today  Only Halfway Through this Successful Transition: Depreciation per month should be flat (even if used car prices fall) as fewer program cars are purchased and more profitable channels are utilized

6

Strong Growth Opportunities in U.S. Off-Airport Locations – 14% yoy Growth  12% share in a three-player market: Since 2006, Hertz has increased its off-airport locations by more than 60% and expects a 9.6% increase in 2013. It has a significant opportunity to capture more share from the insurance replacement market

Value Segment – 25% yoy Growth  Dollar Thrifty will capitalize on value trend: The value segment is the fastest growing on-airport rental car market with over 25% growth in 2012. We expect the Dollar Thrifty brands to continue double-digit growth in 20132014

 Significant opportunity to expand Dollar Thrifty to off-airport locations

24/7 Video Kiosks Increase Efficiency

Hourly Rentals – 30% yoy growth

 Expands Hours to 24/7: Self-serve kiosks allows 24/7 rentals, which increases fleet utilization in a cost-effective manner

 Hertz On Demand (hourly rentals) will expand to 3,500 locations by Q3 2013: We expect little to no cannibalization from the continued expansion of this business

 Allows for Rapid Expansion of Off-Airport Network: Asset-light model will increase returns on capital. Kiosks make it significantly easier to move into body shops, auto dealerships, and hotels

 All of Hertz's ~500,000 U.S. vehicles will have On Demand technology by the end of FY2014

 Significantly Reduces Labor Costs: Live agents maintain a high-quality, personal experience for customers in a cost-effective manner

7

Significant Synergies from Dollar Thrifty Acquisition Revenue Synergies ~$300 million

Cost Synergies ~$300 million

 Leverage Global Partners: Hertz's travel partners such as airlines, hotels, and AAA currently represent 30% of Hertz revenue. These partners have strong interest in adding the Dollar Thrifty brands. Lufthansa and AAA have already started to offer all three brands  Europe Corporate Expansion: Dollar Thrifty currently has no corporate locations in Europe. Hertz is adding Dollar Thrifty to its European locations  Expand Off Airport: Hertz is adding the Dollar Thrifty brands to the majority of its off-airport locations

 Fleet: With the combined company, Hertz will see savings from more efficient buying, selling, and optimizing vehicle usage during ownership  IT: Savings driven by the roll-out of advanced technology to Dollar Thrifty  Procurement: The combined company will see savings from more efficient non-fleet purchasing  Financing, Other: DTG’s blended fleet interest rate is 4.9% while Hertz's is 4.0%. The combined company will be able to command lower financing rates

Revenue Synergies $300M

Cost Synergies $300M

Other, 6% Expand Off Airport, 17%

Leverage Global Partners, 40%

Europe Corporate Expansion, 37%

Financing, Other, 14% Procurement, 15%

Fleet, 40%

IT, 31%

8

HERC Divestiture – 20% Incremental Upside  HERC operates in an extremely cyclical and fragmented industry, follows an acquisitive growth strategy, and has caused a chronic drag on Hertz's consolidated ROIC relative to the car rental business  We believe divesting HERC would be most prudent for the company as it would:  Significantly deleverage Hertz's balance sheet and help the company reach investment grade corporate debt rating sooner  Lower interest expense and unlock value by causing an immediate EPS accretion in the range of $0.14-$0.19 plus additional value of $2.90 per share  Allow deployment of FCF towards a share buyback and/or dividend program  Allow Hertz management to focus solely on the core and higher-return car rental business, Dollar Thrifty integration, and new growth areas  Allow HERC management to focus on growing the business organically and through acquisitions  Potential buyers of HERC include United Rentals, Sunbelt Rentals, and private equity firms Proceeds from Sale of HERC HERC EBITDA (2014e) $675 x EV/EBITDA 6.2x Pre-tax proceeds $4,187 Cost Basis 3,140 Gain on Sale 1,047 Tax on Gain 366 After-Tax Proceeds $3,820 Proceeds from Monetizing Spin-off HERC EBITDA (2014e) $675 x Debt / EBITDA 4.2x After-tax proceeds $2,836

Before Divestiture After-Tax Proceeds $0 Long-term debt (2013e) 6,184 Total Debt / EBITDA 2.6x Interest Expense 340 Blended Cost of Debt 5.5% Fleet Interest 343 Fleet Interest Rate 4.0% Decrease in Interest Expense ∆ Net Income less income from HERC ∆ EPS Forward P / E Increase in Value per Share from ∆ EPS Remaining Value to Shareholders Remaining Value per Share Total Value to Shareholders

Sale $3,820 2,363 1.2x 83 3.5% 300 3.5% 300 87 $0.19 12.5x $2.35

$2.35

Spinoff $2,836 3,348 1.7x 117 3.5% 300 3.5% 266 65 $0.14 12.5x $1.75 1,350 2.90 $4.65

“We've always maintained the position that if there was a reason to divest it that was shareholder friendly, we're not resistant to looking at other things and other variables in terms of the equipment rental business.” – Hertz CEO in February 2013

9

Valuation Analysis Methodology  Hertz currently trades at 7.4x forward EV/EBITDA versus its pre-crisis average of 8.5x  On a forward P/E basis, Hertz currently trades at 12.5x  This is a significant discount relative to its historical average forward P/E of 14.0x and pre-crisis average of 15.4x  Based on an average of P/E, EV/EBITDA and SOTP analysis, we arrive at a target share price of $36 or +52% upside to today's share price  Divestiture of HERC would lead to incremental 20% upside

Target Price ($ millions except per share) FY2014 Estimates Car Rental EBITDA Equipment Rental EBITDA Consolidated EBITDA EPS

Base

Bear

Bull

Street

$2,413 509 $2,922 $2.87

$1,828 432 $2,261 $1.90

$2,727 539 $3,266 $3.39

$2,143 453 $2,596 $2.38

12.5x 7.4x 7.4x 6.2x

11.0x 6.0x 6.0x 5.0x

13.0x 8.0x 8.0x 6.5x

12.5x 7.4x 7.4x 6.2x

Price per Share P/E x EPS EV/EBITDA x EBITDA SOTP

$35.93 $36.73 $35.41

$20.91 $18.87 $17.89

$44.06 $46.90 $45.16

$29.80 $31.53 $30.36

Target Price Upside (Downside)

$36.00 52%

$19.00 (20%)

$45.00 90%

$30.56 29%

Key Assumptions RPD CAGR (FY'12-'14) Manheim Index CAGR (FY'12-'14) Chg. in Residual Value due to Channel Mix Shift Cost Synergies (FY2014)

2.5% (3.0%) $256 $250

(1.0%) (5.0%) $0 $150

3.5% 0%-1% (2.0%) (2%)-(4%) $383 $125-$175 $300 $300

Target Forward Multiples P/E EV/EBITDA SOTP: Car Rental SOTP: Equipment Rental

10

Strong Management Team & Cash Returns Key Management

Mark P. Frissora Chairman & CEO

Elyse Douglas Chief Financial Officer

 Strong management team with laser focus on costs, returns, and customer satisfaction  Sales per employee +6% and operating margin +520bps from 2008 to 2012  Management incentives are aligned with shareholders  Changing incentives: increased weighting of EVA reflects structurally healthier company and industry  Consistently conservative guidance: Frissora has beaten the high end of his guidance every year except 2008

Cash Return to Shareholders  Strong FCF generation would allow Hertz to pay down corporate debt and achieve target Net Debt/EBITDA ratio of 1.6x by 2014  Management has repeatedly asserted that Hertz will return cash to shareholders once it meets its target leverage ratio  We expect Net Debt/EBITDA to fall below 1.6x in 2014, which should be followed by significant dividend and/or share repurchase programs  Payout of 35% of FCF as share repurchase could accelerate EPS growth by an incremental +6%

“There was one time when we had a customer complain to corporate. Frissora happened to be in town that week and showed up here unannounced in jeans and a sweater to figure out with us a way we could resolve the issue.” –Manager, Hertz Off-Airport Manhattan Location

11

Risks and Mitigants  A drop in global GDP or enplanements could materially impact Hertz's profitability 

Hertz has been profitable through cycles. During phases of weak demand, Hertz sells down its fleet to cut capacity and maintain stable pricing. In 2008 and 2009, Hertz reduced its fleet size by 1% and 10% and earned $237 and $199 (EBT) respectively



We believe that Hertz's shift to off-airport locations, especially the non-cyclical insurance market, mitigates this risk

 Our expectations of a cooperative oligopoly could be incorrect 

We believe that there is a high probability that Hertz, Avis, and Enterprise will avoid destructive price wars, especially given the changing incentives and price signaling seen from Hertz

 Given Hertz's high financial leverage, rising interest rates may adversely impact profitability and FCF conversion 

The option to sell HERC and use the sale proceeds to pay down debt mitigates this risk

12

Investment Recommendation: Buy Hertz at $23 Multiple drivers to realize Hertz's intrinsic value of $36 per share 1

Industry consolidation dramatically improves pricing environment

2

Used car market risk is misunderstood

3

Strong revenue growth opportunities in the U.S. and significant revenue and cost synergies from Dollar Thrifty acquisition

4

Divestiture of Equipment Rental segment would unlock substantial value

13

Primary Research Source List Current and Former Employees             

Mark Frissora Elyse Douglas Scott Sider Lois Boyd Tom Callahan Bob Stuart Rob Moore Scott Massengill Jatindar Kapur Sr. Cannot disclose Cannot disclose Cannot disclose Cannot disclose

Chairman & CEO Senior Exec. VP & CFO President RAC Americas President Hertz Equipment Rental President Donlen Exec. VP Global Sales & Marketing Sr. VP, IT Services Sr. VP & Treasurer VP & Corporate Controller Tech Initiative Project Manager Former Sr. Director of Remarketing Dealer Direct Salesman Former Hertz Franchisee

Industry Sources     

Luke Froeb Tom Webb Neil Abrams Scott White John Hunt

Former Chief Economist of the FTC Chief Economist of Manheim Leading Industry Source for Pricing Former Head of Bus Dev at Budget Hunt Ford Chrysler Dealer Principal

Current Shareholders     

Oscar Schafer Michael Smeets** Dan Monaco Dennis Hong Steve Bischoff

Rivulet Capital Fir Tree Partners Fidelity Investments Altimeter Capital 40 North Industries

Other Investment Funds  Michael Karsch Anna Baghdasaryan**  Ethan Binder  Danilo Santiago  Jon Luft  Cristiano Amoruso**  Pallav Gupta  Jason Perri  Investment team

Karsch Capital Management Slate Path Capital Rational Asset Management Eagle Capital Partners Starboard Value MSD Capital Apollo Global Management Roystone Capital

Sell-Side Analysts  David Lim  Chris Agnew

Wells Fargo MKM Partners

** Former Pershing Square Challenge Winner 14

Supplementary Materials

15

Table of Contents Appendix A: Thesis Industry Consolidation Used Car Market Growth Opportunities Dollar Thrifty Acquisition Equipment Rental Business

17 18 27 38 42 44

Appendix B: Base Case Financials and Valuation Financial Summary EPS Bridge EBITDA Bridge Model Sensitivities Equity Trading Comps Sum-of-the-Parts Valuation Unit Economics

46 47 53 54 55 56 58 59

Appendix C: Management Key Management Biographies Track Record Compensation Incentives

61 62 63 65

Appendix D: Ownership Private Equity Ownership Current Shareholder Base

66 67 68

Appendix E: Additional Analysis Industry’s Improved Pricing Sustainable? Rental Car Pricing Sources Why Hertz Over Avis? European Car Rental Market Economic Downturn Debunking Myths About Hertz Stock Price History Competitor Overview - Avis Fit with Pershing Square Criteria

69 70 71 72 73 74 75 76 77 78

Appendix F: Downside Case Financials

79

Appendix G: Upside Case Financials

85

Appendix H: Team Member Bios

91

16

Appendix A: Thesis

17

Industry Consolidation – Timeline A Series of Acquisitions have Consolidated the Car Rental Market November 2002: Avis acquires Budget

2002…

March 2009: Hertz acquires Advantage

…2007

2008

August 2007: Enterprise acquires National / Alamo

2009

November 2012: Hertz acquires Dollar Thrifty

2010

2011

2012

October 2011: Avis acquires Avis Europe

2013

March 2013: Avis acquires ZipCar

18

Industry Consolidation – Current Snapshot Today, Three Players Comprise >90% of the U.S. Rental Car Industry Hertz Corporation

Avis Budget Corp

Enterprise Holdings

19

U.S. Market Share Over Time 100% 90% 80%

70%

Other Budget

60%

National / Alamo 50%

Dollar / Thrifty Avis

40%

Hertz 30%

Enterprise

20% 10% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Auto Rental News

20

U.S. Market Share: On-Airport and Off-Airport On-Airport Market in U.S.

Off-Airport Market in U.S.

Other 2%

Hertz 12%

Hertz 39%

Avis Budget 10%

Avis Budget 26%

Enterprise 33%

~$12.5 billion market

Other 9%

Enterprise 69%

~$11.0 billion market

21

U.S. Car Rental RPD – Hertz  Since Hertz's IPO in late 2006, Hertz's U.S. rental car rates (RPD) have decreased 19 out of the past 24 quarters, including the last nine quarters  Following the close of the Dollar Thrifty acquisition in November 2012, Hertz's management noted that U.S. pricing improved during the latter portion of the fourth quarter, culminating in December airport RPD increasing 1.6% and January airport RPD increasing 6.0% 8%

Hertz U.S. RPD Growth (y/y)

6%

RPD Growth (y/y)

4% 2% 0% (2%) (4%) (6%) (8%)

Hertz has seen pricing improve since the Dollar Thrifty acquisition

22

U.S. Car Rental RPD – Avis  Since Q1 2007, Avis' U.S. rental car rates (RPD) have decreased 17 out of the past 24 quarters, including the last 11 quarters  Following the close of the Dollar Thrifty acquisition in November 2012, Avis' management noted that U.S. pricing improved in December, January, February and March

10%

Avis U.S. RPD Growth (y/y)

RPD Growth (y/y)

8% 6% 4% 2% 0% (2%) (4%)

Avis has seen pricing improve since the Dollar Thrifty acquisition

23

Post-Consolidation Pricing Environment With respect to pricing, we are seeing a pretty healthy environment toward the end of the fourth quarter and into the first quarter. And I think there are a few things that are probably driving it. The first is that we've redoubled our own efforts to push for pricing wherever we can. And I think those are having an impact. I think we have an industry that is generally right-fleeted. And then on top of that, I think we're seeing our competitors move for profitability, rather than share or other potential objectives, and that has a positive impact on all of us. - Avis CFO in March 2013 Unprecedented RAC pricing is converting skeptics to believers. U.S. RAC pricing turned positive just after HTZDTG, fuelling the bull case for a new era of pricing power (top 3 players control 98% of U.S. on-airport). U.S. pricing was +5% in Jan and also strong in Feb/Mar. Avis initiated another price increase effective for Apr 8, which was quickly followed by Enterprise. - Morgan Stanley in March 2013

We made a strategic decision to minimize our participation with less profitable commercial accounts. In January commercial revenue per day was actually positive compared with the prior year. – Hertz CEO in February 2013

One of the headlines I'd like to make is we don't want to gain share by reducing price. We want to gain share by increasing value, and that's how we're doing it. – Hertz CEO in April 2013

We've been very aggressive in initiating price increases over the last 4 months or so (post the Dollar Thrifty acquisition), and I think that's had a positive impact. What we watch for is the extent to which our competitors react to that with increases. And we've seen a fairly good matching of increases by both Hertz and the Enterprise. – Avis CFO in March 2013

24

Post-Consolidation Pricing Environment (cont.) The real issue becomes whether anyone is taking a very different view on pricing and not moving pricing up when the rest of the industry is, because that clearly can have an impact. I think in an environment where there are three competitors rather than four, there's obviously a little bit less risk of that happening. - Avis CFO in March 2013

Enterprise says rates at some of the top 200 airports their brands serve were up to 4% higher in February than during that month last year. - USA Today, February 2013 In (car rental) markets with four brands, each separately owned, the merger of two brand-owners increases average prices 4%. - Former Chief Economist of the FTC

Average Pricing of Six Major Airports, May 2011 to February 2013 $65

$55 2011 $45

2012

2013

$35

$25 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Source: Rate-Highway

25

Structural Shift in Rental Car Pricing Environment  Historically, the major auto manufacturers (GM, Chrysler, Ford) overproduced cars and used the rental car market as a means to unload excess production 

This resulted in consistent over-fleeting and under-utilization in the car rental market



In order to increase utilization, car rental companies were incentivized to lower prices, ultimately resulting in a highly competitive pricing environment marked by low returns

 As a result of the major restructurings of GM, Chrysler, and Ford, auto manufacturers have become much more rational with their production 

This has significantly mitigated over-fleeting in the car rental market and increased utilization –

Car rental utilization rates across the industry are at their all-time high

–

High utilization dis-incentivizes car rental companies from competing on price

–

Renewed focus on returns and profitability

Restructuring in the Auto Manufacturing Industry marks a Structural Shift in Rental Car Pricing Environment

26

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Jan-08

Oct-07

Jul-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

Oct-05

Jul-05

Apr-05

Jan-05

Manheim Used Car Value Index

Used Car Market Analysis Manheim Used Car Value Index is within 5% of All-Time High

130

125

120

115

110

105

100

95

90

Used car prices must fall by 5.7% to return to pre-crisis levels

27

Used Car Market Analysis (cont.)  Competing supply of off-lease vehicles expected to significantly rise in 2013-2014





Off-Lease Volume

Off-lease volumes are set to increase 55% by 2014. Off-lease vehicles directly compete with Hertz's supply of used cars, which put downward pressure on residuals

Ford, GM, and Chrysler drastically reduced vehicle leases during the financial crisis. Off-lease volumes today, which lag lease originations by 33 months, are close to an all-time low. We expect them to increase 6% in 2013 and 27% in 2014 By 2014, we expect an increase of 550,000 off-lease vehicles, which represents 42% of 2012 car rental sales

 Despite the significant increase, we expect off-lease volume in 2014 to be less than that in 2008

New Lease Originations

3.0 2.5 Cars (in millions)



Supply Increase is Around the Corner

2.0 1.5 1.0

Competing Supply +55%

0.5 0.0 '05

'06

'07

'08

'09

'10

'11

'12

'13E '14E

“Supply is definitely going to increase. The off-retail lease volume is a competitive impact.” – Tom Webb, Manheim's Chief Economist

The widely expected supply increase is around the corner

28

Used Car Market Analysis (cont.) Upcoming Increase in Supply – It's Different This Time Healthier OEMS = Healthier Residuals  Restructured OEMs have abandoned destructive practices 

Rationalized capacity at Big 3 automakers means that practices that destroyed residual values will be gone: big incentives, high dealer inventories, excessive lease subsidies, and short rental cycles

 Rental car companies now have rational relationships with OEMs 

The shift to a risk model means that OEM excess capacity is no longer pushed through to rental car companies, which leads to a more rational supply and protects residual values

Shift to Online Purchases = Healthier Residuals  Online buying makes retail and direct-to-dealer channels much easier to operate and more likely to succeed 

Rapid changes in technology has changed the way dealers and individuals buy cars



58% of used car buyers say the Internet was the most influential element in their vehicle search

 Online buying transforms local markets to national markets 

Fewer national used car market inefficiencies leads to structurally higher residual values



The average distance between buyers and sellers is 190 miles for local auction purchases vs. 439 miles for online purchases

We are in a new era of structurally higher used car residual values

29

Used Car Market Analysis (cont.) If Prices Fall, Hertz has Many Levers to Pull Increase Direct-to-Dealer Mix  Hertz can increase its Dealer Direct mix to mitigate falling prices 

Increasing the Dealer Direct channel by 10% decreases depreciation/unit/month by 1.1%

Increase Holding Period in a Downside Scenario  Hertz can increase its rental holding period to mitigate falling prices 

Increasing average fleet holding period by three months decreases depreciation/unit/month by 0.6%

Increase Retail Mix  Hertz can increase its Retail/Rent2Buy mix to mitigate falling prices 

Increasing the Retail/Rent2Buy channel by 10% decreases depreciation/unit/month by 3.1%

Increase Prices in a Downside Scenario  Falling residuals affect all rental car companies 

In the past, pricing has increased after significant declines in used car residual values (72% R-squared)

Hertz has many ways to mitigate declines in used car prices

30

Used Car Market Analysis (cont.) Hertz has significantly outperformed the Manheim Index since Jan 2011 Manheim Index

“While people are forecasting this headwind from a drop in the Manheim Index, we are not experiencing it. It's due to the shift in channels, where we're selling the cars and how we're selling them, and that's improving our fleet costs.”

Hertz Residual Values

140

+10%

135

“Is [lower depreciation] sustainable? We believe it is sustainable in our business model. We believe that used cars are probably the most liquid currency out there, and that if you look at over the last 40 years used cars have always held their value. I mean, after 9/11 they bounced back in four months. After 2008, 2009 they bounced back in six months to higher levels than they were before.”

130 125 120 -3%

115 110

Sep-12

Aug-12

Jul-12

Jun-12

May-12

Apr-12

Mar-12

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

105 Jan-11

Manheim Used Car Value Index

145

“We feel really good about fleet costs continuing to go down, based on only being about 50% of the way deployed on the car channel shift.” -- CEO Mark Frissora

Hertz's remarketing strategy is working

31

Remarketing Channel Mix – Overview % ofPct Fleet SoldSold through Auction of Fleet - Auction 100%

% of Pct Fleet Sold Sold through Retail/Rent2Buy of Fleet - Retail/Rent2Buy 100%

88% 75%

80%

80%

65%

60%

60% 33%

40%

40%

23%

20%

13%

13%

2014E

2015E

0%

20%

33%

7%

8%

9%

13%

2009

2010

2011

2012

2014E

2015E

0% 2009

2010

2011

2012

2013E

% ofPct Fleet SoldSold through Dealer of Fleet - Dealer DirectDirect 100%

80%

80%

60%

47%

47%

48%

2013E

% of Pct Fleet Sold Sold through Other Channels of Fleet - Other Channels

100%

48%

60% 40%

40% 20%

33% 23%

11%

19% 20%

0%

5%

6%

7%

7%

7%

7%

7%

2009

2010

2011

2012

2013E

2014E

2015E

0%

0% 2009

2010

2011

2012

2013E

2014E

2015E

The shift away from auctions into more profitable resale channels mitigates the expected drop in used car prices

32

Remarketing Channel Mix – Overview (cont.) Dealer Direct - $500 Premium over Auction

Retail/Rent2Buy - $1,300 Premium over Auction

$1,400

$1,400

$1,200

$1,200

$1,000 $800

Extra Interest and Depreciation

$1,000

Price Differential

$800

Price Differential $1,035

Transportation to Auction

$600

Transportation to Auction

$600

$400

$160

Auction Reconditioning Fees

Auction Reconditioning Fees

$400

Auction Sales Fee

$200

$75 $75 $90

$0

Auction Sales Fee $200

$100

$0

Premium Over Auction - Dealer Direct

$75 $90

$100 Premium Over Auction Retail/Rent2Buy

Retail/Rent2Buy and Dealer Direct offer significant premiums over the auction channel

33

Remarketing Channel Overview – Retail/Rent2Buy 1. Retail Sales Cut Out the Middleman

2. Innovative Sales Process Provides Advantage

 Hertz cuts out the cost of the auction for the buyer and seller, which enables it to charge the lowest retail prices

 Instead of 30-minute test drives, Hertz offers refundable 3-day test drives, which customers love and traditional car dealerships cannot offer

 Average retail price is 20% below Blue Book Value

 Prices are non-negotiable (no-haggle price)

3. Retail Sales Growth Obscured by Accounting

4. Strong Reviews from Customers

 With the steady supply of used cars and an attractive value proposition to retail customers, we believe Rent2Buy will ultimately become an effective competitor to CarMax

 “Better price, recent model years, the ability to 'try before you buy,' hassle-free buying, a warranty, and buying the cream of the crop”  “The prices are VERY good”

 Retail stores have grown from nine in 2011 to over 30 today  Continued growth in retail sales is only reflected in a lower depreciation cost, a much less visible metric than sales growth

We expect the shift to retail/Rent2Buy to continue to offset the decline in residuals

34

Remarketing Channel Overview – Dealer Direct  Hertz has significantly built up its Direct-to-Dealer sales infrastructure  Direct-to-Dealer sales force increased from 15 in 2011 to over 120 today  Dealer Direct increases fleet utilization by advertising active rentals  Attractive value proposition for dealers  $45 buyer fee compared to $300-$500 from Manheim, the largest used car auction  No change in dealer behavior required. Enterprise has a long history of selling direct to dealers  Strong growth despite relatively infant infrastructure  This channel didn't exist in 2009, but now represents 40% of remarketing. The channel more than doubled from 2011-2012  Only 6% of vehicles have condition reports and pictures – Vehicles with condition reports and pictures are eight times more likely to sell, according to Manheim – Management has indicated that most Dealer Direct vehicles will have electronic condition reports by 2014

We expect the shift to Dealer Direct sales to increase utilization and decrease fleet cost

35

Capitalization Costs  Hertz has moved to a significantly more diverse fleet 

Hertz is Less Reliant on Ford and GM

Reduced reliance on Ford and GM:

% of Vehicles Purchased by Manufacturer –

– 

Since the spin-off from Ford in 2005, Hertz has reduced its reliance on Ford and General Motors from 57% of purchases to just 38% today

More suppliers = more bargaining power

Shift from program cars saves 1% on capitalization costs

100% 80%

40%

20%

This analysis significantly reduced purchases of exotic trim packages on cars for leisure customers

16% 13%

Nissan

17% 40%

25%

General Motors

13%

Ford

2006

Toyota

2012

Consolidation Increases Purchasing Scale 700,000

600,000 Avg # of Cars



Others

0%

 Deep analytics on trim packages minimizes depreciation/unit/month New software packages ensure that vehicles have the trim packages that balance customer satisfaction, capitalization costs, and residual values

33%

60%

 Consolidation concentrates vehicle purchasing and increases buyer power



43%

Donlen

500,000 400,000

International (Hertz and Dollar Thrifty)

300,000

200,000

Domestic (Hertz and Dollar Thrifty)

100,000 2010

2011

2012

36

Fleet Efficiency  Increases in fleet efficiency can significantly reduce costs 

Fleet efficiency explains 86% of the variation in DOE + SGA margin

Fleet Efficiency is Improving 81.0%

80.0%

80.0%









Synergies from Dollar Thrifty – opposite demand schedules means that Hertz's excess supply of weekend cars get used at Dollar Thrifty Technological Changes – kiosks, Hertz On Demand, and mobile apps, reduce the need for staffed locations and expand hours to 24/7 The Shift to the Dealer Direct Remarketing Channel – reduces the time cars spend grounded by up to 16 days, which saves approximately $10 per day in depreciation and interest expense We expect these factors to increase utilization by 130bps to 80.5% by 2015

80.5%

79.3% 78.5% 78.3% 78.6%

79.0% 77.9% 78.0%

77.1%

77.0% 76.0% 75.0% '07

'08

'09

'10

'11

'12

'13E '14E '15E

Improved Fleet Efficiency Reduces Costs DOE + SG&A margin

 Three main factors are leading to increased utilization

80.3%

R² = 86%

78.0%

76.0% 74.0% 72.0%

70.0% 77.5% 78.0% 78.5% 79.0% 79.5% 80.0% 80.5% U.S. RAC Fleet Efficiency

37

Growth Initiative – U.S. Off-Airport Market  12% share in $11bn off-airport market = significant growth opportunity 







While off-airport revenue per day is lower than that in airport markets, rental periods are longer, leading to higher utilization and lower costs The insurance replacement market is particularly attractive, with long rental periods and stable revenues and profits, even in economic downturns Changes in technology (Hertz On Demand, kiosks) reduce the up-front investment costs, making this market expansion particularly attractive We expect off-airport locations to grow by >10% per year through 2015

Off-Airport vs. On-Airport Cost Differentials Labor Costs DOE SG&A Utilization

Off-Airport Location On-Airport Location $4.09 $4.47 $18.54 $28.00 $1.63 $3.12 80.3% 78.3%

Difference 9% lower 34% lower 48% lower 2% higher

Growth is Accelerating Off-Airport Locations 3,000

2009-2012: +14.0% CAGR

2,500 2,000

2004-2008: +5.5% CAGR

1,500 1,000 2005 2006 2007 2008 2009 2010 2011 2012

Off-Airport Revenue Mix

19% 43%

Retail Replacement Business

38%

Source: Hertz investor presentation

38

Growth Initiative – ExpressRent Kiosks / iPhone App  A parking space is the only requirement 

Hertz can use technology to leapfrog Enterprise on offairport markets



Opens up body shops, car dealerships, and hotels to Hertz rental cars. Requires a modest $6000 kiosk investment

ExpressRent Kiosk

iPhone App

 Increasing consumer preference towards mobile applications reduces costs 

70% of Hertz On Demand customers used mobile apps



Mobile check-in increases labor productivity and customer satisfaction

 How it works 



iPhone App: Text message after plane lands notifies customer where their car is located. Eliminates the need to stop by the counter

“Investors underestimate the impact of these volumeenhancing product and service improvements.” – Buyside Investment Analyst

24/7 kiosk: Videophone connects to agent in Oklahoma, City who guides customer through the process. Customer scans driver's license at kiosk

39

Growth Initiative – Hertz On Demand (Hourly Rentals)  Significant Advantages Over ZipCar 

Scale: approximately 500,000 U.S. rental cars by 2014 vs. 9,700 for ZipCar



No membership required and free to join, compared to Zipcar's $25 application fee and $60/year



Second-mover advantage –

Cheaper and better technology

–

Does not have to educate the public about car sharing

Hertz On Demand is Self Serve

 Increases Fleet Utilization 

Car-sharing customers and traditional rent-a-car customers do not overlap



24/7, short-term car sharing minimizes idle time

 Reduces Costs 

On Demand technology is completely self-serve

40

Growth Initiative – Donlen Fleet Management  Donlen gives Hertz an end-to-end solution for its customers. No other rental car company offers this solution

Donlen Fleet Management Solutions

 Significant revenue synergies continue to be realized 

E.g. Hertz Value Lease expands Donlen's product offering to large companies by leveraging Hertz's rental car network



Revenue growth is accelerating. We expect 2012 revenues of ~$460 million to grow by 16% to $534 million

 Donlen's expertise in remarketing is an underappreciated asset 

Our primary research discovered that Donlen has significant expertise in sourcing and remarketing that will be a substantial benefit to Hertz as it continues to move away from program cars

“Donlen is the best remarketer I've ever seen.” – Former Hertz Licensee

“Our Donlen acquisition has turned out to be a much better acquisition than we anticipated. The revenue synergies that we're getting out of this acquisition are large.” – CEO Mark Frissora

41

Dollar Thrifty Acquisition Terms Hertz completed its acquisition of Dollar Thrifty in November 2012

Purchase Price

Deal Structure

Transaction Benefits

   

$87.50 per share purchase price Equity Value of $2.6 billion Corporate Enterprise Value of $2.3 billion 2012E EV/Corp EBITDA multiple of 7.8x (based on mid-point of DTG 2012E Corp. EBITDA guidance of $285 million to $310 million )

 100% cash consideration  Antitrust clearance required Hertz to divest its Advantage brand  Advantage divestiture (~$30 million of Corp. EBITDA)  Highly attractive transaction for HTZ owners – EPS accretion & positive EVA  Including impact of Advantage divestiture (~$30 million of Corp. EBITDA)  Estimated $600 million in synergies  Acquisition multiple of 2.6x EV/EBITDA (including synergies)

42

Synergies from Dollar Thrifty Acquisition  Hertz operated primarily in the premium segment of the car rental market  The Dollar Thrifty acquisition gives them a leading brand in the faster growing mid-tier and value market or the “leisure” segment  Revenue synergies of $300M per year and cost synergies of $300M per year. Revenue synergies have incremental margins of 20-30%  By 2015, these synergies would contribute $0.57 in incremental EPS. $1.5B NPV of incremental operating profits

43

Equipment Rental (HERC) Business Overview Business

HERC Revenue Mix by Markets

 HERC offers a broad range of equipment for rental in the U.S., Canada, France, Spain, China and Saudi Arabia. Ancillary to its rental business, it is also a dealer of certain brands of new equipment in the U.S. and Canada  Customers range from local contractors to large industrial plants. As of December 31, 2012, no customer accounted for more than 1.5% of HERC’s global sales  HERC revenues and margins are cyclical due to high exposure to the construction and industrial markets  U.S. represents approximately 70% of worldwide revenues Fleet

HERC Fleet by Equipment Type

 HERC acquires its equipment from a variety of manufacturers. The equipment is typically new at the time of purchase and is not subject to any repurchase program  The per-unit acquisition cost of rental equipment varies from over $200,000 to under $100. As of December 31, 2012, the average per-unit acquisition cost (excluding small equipment purchased for less than $5,000 per unit) for rental fleet was approximately $38,000  Average age of worldwide rental fleet is 43 months

44

Equipment Rental Divestiture to Unlock Value  HERC operates in an extremely fragmented industry, with the top 10 North America rental companies making up only 30% of revenue 

United Rentals (NYSE:URI) is the market leader with 13% share



Sunbelt Rentals (LSE:AHT) is 2nd with 5% market share



HERC is 3rd with 4% market share

United Rentals 13% Sunbelt 5% HERC 4%

 Management has previously discussed the possibility of divesting HERC  Potential buyers include United Rentals, Sunbelt Rentals, and private equity firms 

We spoke with an analyst who asked the CEO if he foresees any FTC issues with regards to an acquisition of HERC by United Rentals or Sunbelt Rentals. He replied that has already looked into it and there would not be any issues

 We believe a monetizing spinoff would maximize shareholder value. Hertz should: 

Issue debt at HERC level, transfer the proceeds of debt issuance to parent (Hertz Global Holdings), and then spin-off HERC



Sell HERC after six months to qualify for tax-free treatment under IRS Section 355(e) “Safe Harbor” rule

 An outright sale of HERC could also be pursued based on the cost-basis (undisclosed) of HERC’s historical acquisitions

Other 78%

“We've always maintained the position that if there was a reason to divest it that was shareholder friendly, we're not resistant to looking at other things and other variables in terms of the equipment rental business.” – Hertz CEO in February 2013

45

Appendix B: Base Case Financials and Valuation

46

Model Summary – Base Case ($ in millions, except per share data) Income Statement Metrics Total Revenue Total Revenue Growth Car Rental Equipment Rental EBITDA EBITDA Margin Net Interest Expense EBT EBT Margin Car Rental Equipment Rental Cash Tax Expense Net Income on Operating Basis EPS EPS Growth Balance Sheet Metrics Net Debt Total Debt to Equity Net Debt / EBITDA Return on Equity Return on Invested Capital Return on Assets Cash Flow Metrics Cash Flow - Operating Capex FCF

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

$8,525 (1.8%) 0.8% (5.5%) 1,240 14.5% 429 238 2.8% 4.2% 16.4% 83 134 $0.41 nm

$7,102 (16.7%) (12.8%) (33.0%) 998 14.1% 404 199 2.8% 7.8% 6.9% 70 115 $0.31 (25.5%)

$7,563 6.5% 8.5% (3.7%) 1,089 14.4% 436 347 4.6% 9.9% 7.3% 121 208 $0.51 63.7%

$8,298 9.7% 9.2% 13.0% 1,356 16.3% 279 681 8.2% 12.0% 13.3% 238 423 $0.95 88.1%

$9,021 8.7% 7.8% 14.5% 1,607 17.8% 274 901 10.0% 13.4% 16.4% 315 586 $1.31 37.5%

$11,163 23.8% 26.7% 7.6% 2,420 21.7% 386 1,571 14.1% 19.2% 16.3% 550 1,021 $2.20 68.4%

$11,952 7.1% 7.1% 6.6% 2,922 24.4% 365 2,062 17.3% 22.3% 17.7% 722 1,341 $2.87 30.6%

$12,670 6.0% 6.1% 5.6% 3,258 25.7% 336 2,398 18.9% 23.6% 18.8% 839 1,559 $3.33 15.7%

$13,055 3.0% 3.1% 2.8% 3,407 26.1% 308 2,561 19.6% 24.0% 19.4% 896 1,665 $3.53 6.2%

$13,465 3.1% 3.2% 2.8% 3,568 26.5% 253 2,761 20.5% 24.4% 20.0% 966 1,795 $3.79 7.3%

3,260 3.12x 2.63x 9.1% 7.2% 2.6%

3,339 2.25x 3.34x 5.5% 5.8% 2.5%

3,249 2.77x 2.98x 9.9% 6.4% 2.9%

3,465 2.11x 2.55x 18.9% 9.0% 3.5%

5,440 2.61x 3.38x 23.4% 8.4% 3.3%

4,355 1.68x 1.80x 27.7% 12.9% 5.3%

2,804 1.15x 0.96x 27.0% 14.8% 6.3%

1,044 0.80x 0.32x 24.2% 15.3% 6.9%

(898) 0.53x (0.26x) 20.8% 15.2% 7.1%

(3,011) 0.30x (0.84x) 18.5% 15.5% 7.4%

2,096 1,317 779

1,775 1,579 196

2,209 1,063 1,146

2,233 1,832 402

2,718 2,663 55

3,714 2,629 1,085

4,359 2,808 1,551

4,762 3,001 1,761

5,003 3,061 1,942

5,235 3,122 2,113

47

Income Statement – Base Case ($ in millions, except per share data) Net Sales

2008 $8,525

2009 $7,102

2010 $7,563

Fiscal Year Ending December 2011 2012 2013e 2014e $8,298 $9,021 $11,163 $11,952 Bloomberg Consensus: $10,911 $11,695

Expenses: Direct Operating 4,930 4,084 4,283 4,566 4,796 Deprec. of revenue earning equip, leases 2,194 1,931 1,868 1,906 2,148 SG&A 769 641 665 745 946 Interest Expense 870 680 773 700 650 Interest Income 25 65 12 6 5 Impairments, Others 1,169 0 0 63 36 Total Expense 9,907 7,272 7,577 7,974 8,570 GAAP Pre-Tax Income (1,382) (171) (15) 324 451 Adjustments for non-cash and non-recurring items: Purchase Accounting 101 90 90 88 110 Non-Cash Debt Charges 100 172 183 130 84 Other charges 1,419 108 89 138 258 (Restructuring Charges, Derivative Loss, Pension Adjustment, Acquisition Charges, Other) Total Adjustments 1,620 370 362 356 451 Adjusted Pre-Tax Income 238 199 347 681 901 Cash Tax 83 70 121 238 315 Less: Noncontrolling interest 21 15 17 20 0 Net Income to Hertz 134 115 208 423 586 Diluted EPS $0.41 $0.31 $0.51 $0.95 $1.31 Bloomberg Consensus: Fully Diluted Share 323 372 412 445 448

2015e $12,670 $12,548

2016e $13,055

2017e $13,465

5,464 2,640 1,309 710 6 0 9,816 1,348

5,651 2,808 1,491 683 6 0 10,126 1,826

5,882 2,979 1,615 649 7 0 10,519 2,151

6,004 3,082 1,655 614 7 0 10,747 2,307

6,132 3,191 1,697 551 7 0 10,964 2,501

129 94 0

138 98 0

146 101 0

150 103 0

155 105 0

224 1,571 550 0 1,021 $2.20 $1.90 464

236 2,062 722 0 1,341 $2.87 $2.38 466

247 2,398 839 0 1,559 $3.33 $2.68 469

254 2,561 896 0 1,665 $3.53

260 2,761 966 0 1,795 $3.79

471

473

48

EBITDA Reconciliation – Base Case ($ in millions, except per share data) Car Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments - Car rental fleet interest - Car rental fleet depreciation + Non-cash expenses & charges + Extraordinary, unusual charges RAC Segment EBITDA Equipment Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments + Non-cash, extraordinary, unusual charges HERC Segment EBITDA Other reconciling items: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Noncontrolling interest GAAP EBITDA before adjustments + Non-cash expenses & charges + Extraordinary, unusual charges Corporate Segment EBITDA Total Adjusted EBITDA

2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

(385) 2,107 445 443 2,610 425 1,844 83 108 532

190 1,785 302 0 2,276 316 1,614 130 105 582

442 1,724 390 0 2,556 377 1,595 135 30 749

756 1,774 329 0 2,858 313 1,651 33 24 950

784 2,007 312 0 3,103 297 1,876 41 136 1,107

1,733 2,509 298 0 4,539 285 2,347 51 0 1,958

2,172 2,669 292 0 5,133 280 2,495 54 0 2,413

2,452 2,834 286 0 5,572 275 2,650 58 0 2,705

2,571 2,932 279 0 5,783 268 2,743 59 0 2,831

2,701 3,038 271 0 6,010 261 2,842 61 0 2,968

(629) 417 111 111 624 106 731

(20) 383 53 0 416 39 455

(15) 338 39 0 363 35 398

69 324 45 0 439 42 481

152 356 52 0 561 25 586

190 380 47 0 617 0 617

225 405 46 0 675 0 675

256 428 45 0 729 0 729

274 440 43 0 757 0 758

292 453 42 0 787 0 787

(368) 6 307 (21) (76) 30 24 (23) 1,240

(340) 8 311 (15) (36) 37 (39) (38) 998

(442) 10 333 (17) (117) 37 21 (59) 1,089

(501) 11 321 (20) (188) 28 85 (74) 1,356

(486) 13 282 0 (191) 27 78 (86) 1,607

(575) 17 360 0 (199) 44 0 (155) 2,420

(571) 18 340 0 (213) 47 0 (166) 2,922

(557) 19 313 0 (226) 50 0 (176) 3,258

(537) 19 285 0 (233) 51 0 (181) 3,407

(492) 20 232 0 (240) 53 0 (187) 3,568

49

Balance Sheet – Base Case ($ in millions, except per share data) Assets: Cash & ST investments Receivables Inventory Revenue Earning Equipment Other Property & Equipment Goodwill & Intangibles Other Total Assets Liabilities & S.E.: Payables Fleet Debt Corporate Debt, Leases Deferred Income Taxes Other Total Liabilities Shareholders' Equity Total Liabilities & S.E. Key Statistics: Net Debt Net Debt / Equity Net Debt / EBITDA Total Debt / Equity Receivables Turnover Receivables Days

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

1,326 1,911 96 8,692 1,255 2,886 287 16,451

1,351 1,325 93 8,852 1,188 2,893 300 16,002

2,582 1,357 87 8,924 1,164 2,879 353 17,345

1,240 1,616 84 10,105 1,252 2,954 422 17,674

1,105 1,887 106 12,908 1,436 5,374 470 23,286

1,828 2,335 131 12,675 1,457 5,287 470 24,183

2,879 2,500 140 12,436 1,253 5,194 470 24,872

4,140 2,650 148 12,205 1,071 5,096 470 25,779

5,111 2,730 153 11,923 852 4,994 470 26,234

5,956 2,816 158 11,585 594 4,889 470 26,469

931 6,387 4,586 1,482 1,577 14,963 1,488 16,451

659 5,675 4,689 1,471 1,410 13,905 2,097 16,002

954 5,476 5,831 1,508 1,457 15,226 2,118 17,345

897 6,612 4,705 1,688 1,535 15,439 2,235 17,674

999 8,903 6,545 2,700 1,631 20,779 2,507 23,286

1,236 8,742 6,184 2,700 1,631 20,493 3,690 24,183

1,324 8,578 5,684 2,700 1,631 19,916 4,956 24,872

1,403 8,418 5,184 2,700 1,631 19,336 6,443 25,779

1,446 8,224 4,213 2,700 1,631 18,213 8,021 26,234

1,491 7,991 2,945 2,700 1,631 16,758 9,710 26,469

3,260 2.19x 2.63x 3.08x 4.46x 80.7

3,339 1.59x 3.34x 2.24x 5.36x 67.2

3,249 1.53x 2.98x 2.75x 5.57x 64.6

3,465 1.55x 2.55x 2.11x 5.13x 70.1

5,440 2.17x 3.38x 2.61x 4.78x 75.3

4,355 1.18x 1.80x 1.68x 4.78x 75.3

2,804 0.57x 0.96x 1.15x 4.78x 75.3

1,044 0.16x 0.32x 0.80x 4.78x 75.3

(898) (0.11x) (0.26x) 0.53x 4.78x 75.3

(3,011) (0.31x) (0.84x) 0.30x 4.78x 75.3

50

Cash Flow Statement – Base Case ($ in millions, except per share data) 2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

134 2,194 239 (331) (141) 2,096

115 1,931 226 316 (813) 1,775

208 1,868 219 270 (357) 2,209

423 1,906 228 (313) (10) 2,233

586 2,148 257 (190) (82) 2,718

1,021 2,640 289 (236) 3,714

1,341 2,808 298 (87) 4,359

1,559 2,979 303 (79) 4,762

1,665 3,082 299 (42) 5,003

1,795 3,191 295 (45) 5,235

(1,178) (139) (71) (79) (1,466)

(1,502) (77) (76) 35 (1,621)

(922) (140) (48) (1) (1,111)

(1,604) (228) (227) (30) (2,089)

(2,488) (175) (1,905) 90 (4,477)

(2,406) (223) (2,629)

(2,569) (239) (2,808)

(2,748) (253) (3,001)

(2,800) (261) (3,061)

(2,853) (269) (3,122)

Financing Activities: Proceeds from Debt Issuance, net Proceeds from Rev. Line of Credit Proceeds from Equity Issuance Dividends Paid Others Cash Flow from Financing Act.

(816) 199 (78) (695)

523 (1,126) 529 (54) (129)

(799) 1,026 (93) 134

(1,320) 57 (224) (1,487)

443 1,273 (92) 1,625

(112) (250) (362)

(250) (250) (500)

(250) (250) (500)

(971) (971)

(1,268) (1,268)

Cash Flow for Year Cash at Beginning of Year Cash at End of Year

(66) 1,391 1,326

25 1,326 1,351

1,231 1,351 2,582

(1,342) 2,582 1,240

(135) 1,240 1,105

723 1,105 1,828

1,051 1,828 2,879

1,261 2,879 4,140

971 4,140 5,111

845 5,111 5,956

779

196

1,146

1,085

1,551

1,761

1,942

2,113

Operating Activities: Net Income Revenue Earning Equip. D&A Other PPE D&A Changes in Working Capital Others Cash Flow from Operating Act. Investing Activities: Fleet Equip. Capex, net disposals Other PPE Capex, net Acquisitions, net cash acquired Others Cash Flow from Investing Act.

CFO less Capex (FCF)

402

55

51

Key Model Assumptions Sales EBITDA EPS Critical revenue drivers: U.S. RPD - growth Y/Y U.S. Enplanements - growth Y/Y International RPD - growth Y/Y International Enplanements - growth Y/Y Critical cost drivers: Manheim Index (Used Car Prices) - growth Y/Y Fleet utilization + Y-Y gain from DTG integration + Y-Y gain from technology improvements + Y-Y gain from incremental 1% share of off-airport sales Channel mix Dealer direct Retail & R2B Auction, other Average resale value rel. auctions Dealer direct Retail & R2B

Actual 2012a $ 9,021 1,607 1.31

$

Final impact on Depreciation per Car per Month Y/Y * * (determined by Manheim Index, fleet utilization, channel mix, and average premium of resale price over auction channel) DTG cost synergies ($mn)

2013e $ 11,163 2,420 2.20

Base 2014e $ 11,952 2,922 2.87

2015e $ 12,670 3,258 3.33

(3.1%) 4.0% (2.9%) (2.9%)

2.5% 3.5% 0.0% 1.0%

2.5% 3.5% 0.0% 1.0%

0.0% 3.0% 0.0% 1.0%

(1.0%) 2.0% (2.0%) 0.0%

(1.0%) 2.0% (2.0%) 0.0%

(1.0%) 79.3% nm nm nm

(4.0%) 80.0% 0.50% 0.25% 2.2%

(2.0%) 80.3% 0.00% 0.25% 2.2%

0.0% 80.5% 0.00% 0.25% 2.2%

(6.0%) 79.5% 0.25% 0.00% 2.2%

47.0% 13.0% 40.0%

47.3% 22.8% 30.0%

47.5% 32.5% 20.0%

47.5% 32.5% 20.0%

47.0% 13.0% 40.0%

Bear 2014e $ 11,222 2,280 1.92

2013e $ 11,168 2,585 2.44

Bull 2014e $ 12,048 3,250 3.37

2015e $ 12,812 3,481 3.85

(1.0%) 2.0% (2.0%) 0.0%

3.5% 4.0% 0.0% 1.5%

3.5% 4.0% 0.0% 1.5%

0.0% 3.0% 0.0% 1.5%

(4.0%) 79.5% 0.00% 0.00% 2.2%

0.0% 79.6% 0.00% 0.00% 2.2%

(3.0%) 80.5% 0.75% 0.50% 2.2%

(1.0%) 81.0% 0.00% 0.50% 2.2%

0.0% 81.5% 0.00% 0.50% 2.2%

47.0% 13.0% 40.0%

47.0% 13.0% 40.0%

48.5% 25.3% 26.3%

50.0% 37.5% 12.5%

50.0% 37.5% 12.5%

2015e $ 11,715 2,458 2.27

500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 1,300 1,300 1,300 1,300 1,100 1,100 1,100 1,500 1,500 1,500 5.2%

$

2013e $ 10,828 2,042 1.60

-

0.6%

$

150 $

0.5%

250 $

-

300 $

7.1%

100 $

1.0%

200 $

5.6%

300 $

(2.7%)

200 $

(2.8%)

300 $

-

300

52

EPS Bridge – Base Case

53

EBITDA Margin Bridge – Base Case

54

Model Sensitivities Sensitivity to U.S. RPD Growth Y/Y -2.5% 0.0% 2.5% 5.0% 2014e EBITDA $2,445 $2,610 $2,922 $3,239 2014e EPS $2.22 $2.44 $2.87 $3.31 Price Target $28.06 $30.80 $36.02 $41.34 Sensitivity to U.S. Enplanements Y/Y 0.0% 1.8% 3.5% 5.3% 2014e EBITDA $2,852 $2,887 $2,922 $2,957 2014e EPS $2.78 $2.83 $2.87 $2.92 Price Target $34.86 $35.44 $36.02 $36.60

7.5% $3,562 $3.76 $46.74

2014e EBITDA 2014e EPS Price Target

Sensitivity to Fleet Utilization 78.3% 79.3% 80.3% 81.3% $2,872 $2,897 $2,922 $2,946 $2.80 $2.84 $2.87 $2.91 $35.19 $35.61 $36.02 $36.42

82.3% $2,970 $2.94 $36.81

7.0% $2,992 $2.97 $37.18

Sensitivity to Manheim Index Y/Y -8.0% -6.0% -4.0% -2.0% 2014e EBITDA $2,755 $2,838 $2,922 $3,006 2014e EPS $2.65 $2.76 $2.87 $2.99 Price Target $33.38 $34.70 $36.02 $37.35

0.0% $3,089 $3.10 $38.67

Impact of Used Car Prices and Resale Channel Mix 2012 2014e Scenarios Actual Base Down Channel used car resale price relative to Auction channel Dealer Direct $500 $500 $500 Retail & R2B $1,300 $1,300 $1,100 Share of Vehicles Sold via Channel Dealer Direct 47% 48% 47% Retail & R2B 13% 33% 13% Auction, other 40% 20% 40% EBITDA $1,607 $2,922 $2,280 EPS $1.31 $2.87 $1.92 Price per Share Estm. $36.02 $19.37

Up $500 $1,500 50% 38% 13% $3,250 $3.37 $45.14

55

Equity Trading Comps Company

Share Price

Market Enterprise CAGR '12a-'14e Cap Value Sales EBITDA EPS

EV / EBITDA 2013e 2014e

Price / Earnings Net Debt/ 2013e 2014e EBITDA

Car Rental Hertz Global Holdings Avis Budget Group Average

$23.72 10,959 $28.00 3,083

16,626 5,382

14% 6% 10%

26% 6% 16%

34% 10% 22%

7.4x 6.6x 7.0x

6.4x 5.8x 6.1x

12.5x 12.0x 12.3x

9.9x 9.6x 9.8x

3.4x 2.7x 3.1x

Equipment Rental United Rentals Ashtead Group (Sunbelt) Average

$51.69 $9.31

11,888 6,301

15% 13% 14%

23% 22% 22%

26% 42% 34%

5.3x 7.0x 6.2x

4.8x 6.6x 5.7x

10.7x 20.1x 15.4x

8.5x 16.5x 12.5x

4.2x 2.2x 3.2x

4,871 4,658

56

Historical Comps

57

Sum-of-the-Parts Valuation  We use a forward EV/EBITDA range of 6.0x-8.0x for the Car Rental segment

($ in millions except per share)

 Our base case multiple is Hertz's current NTM EV/EBITDA of 7.4x

Revenue (2014e)



However, we believe Hertz's valuation could re-rate to its historic average EV/EBITDA of 8.5x given industry dynamics, improving pricing, strong execution by management team especially on integration of Dollar Thrifty, and efficient capital allocation with potential for cash returns in the next 18 months

 We use a forward EV/EBITDA range of 5.0x-6.5x for the Equipment Rental segment 

The Equipment Rental companies currently trade at an average 6.2x forward EV/EBITDA and historically traded in the 2.4x-7.5x range

Base

Bear

Bull

Car Rental Equipment Rental Total EBITDA (2014e) Car Rental Equipment Rental Total Forward EV / EBITDA Car Rental Equipment Rental

10,361 9,630 10,457 1,589 1,560 1,619 $11,952 $11,192 $12,078 2,413 1,828 2,727 509 432 539 $2,922 $2,261 $3,266 7.4x 6.0x 8.0x 6.2x 5.0x 6.5x

Enterprise Value

17,854 10,970 21,814 3,158 2,139 3,505 $21,012 $13,109 $25,320

Car Rental Equipment Rental Total

Less: Debt (2013e) Plus: Cash (2013e) Less: Unfunded Pension Obligation (2013e) Excess Value Price per Share Upside to Current Price

(6,184) (6,259) (5,894) 1,828 1,677 1,756 (227) (227) (227) $16,430 $8,301 $20,954 $35.41 $17.89 $45.16 49%

(25%)

90%

58

Unit Economics Per Car in US$ units 2008

2009

2010

2011

2012

2013e

2014e

2015e

2016e

2017e

$44.31 nm 281 77.1%

$43.68 -1.4% 286 78.5%

$43.14 -1.2% 286 78.3%

$41.33 -4.2% 287 78.6%

$40.01 -3.2% 289 79.3%

$40.69 1.7% 292 80.0%

$41.40 1.7% 293 80.3%

$41.40 0.0% 294 80.5%

$41.40 0.0% 294 80.6%

$41.40 0.0% 294 80.6%

$12,461

$12,513

$12,323

$11,858

$11,577

$11,880

$12,128

$12,169

$12,171

$12,173

Fleet Interest Expense % of Sales Fleet Depreciation Expense % of Sales

$989 7.9% $4,029 32.3%

$764 6.1% $3,904 31.2%

$901 7.3% $3,582 29.1%

$696 5.9% $2,683 22.6%

$615 5.3% $2,821 24.4%

$458 3.9% $2,837 23.9%

$430 3.5% $2,852 23.5%

$401 3.3% $2,852 23.4%

$386 3.2% $2,852 23.4%

$369 3.0% $2,852 23.4%

Operating Profit before DOE % of Sales

$7,444 59.7%

$7,845 62.7%

$7,840 63.6%

$8,479 71.5%

$8,140 70.3%

$8,585 72.3%

$8,847 72.9%

$8,916 73.3%

$8,934 73.4%

$8,952 73.5%

Direct Operating Expense % of Sales SG&A % of Sales

$4,272 34.3% $1,106 8.9%

$4,337 34.7% $1,100 8.8%

$4,227 34.3% $1,036 8.4%

$3,988 33.6% $1,021 8.6%

$3,719 32.1% $1,153 10.0%

$3,488 29.4% $1,183 10.0%

$3,420 28.2% $1,208 10.0%

$3,363 27.6% $1,212 10.0%

$3,328 27.3% $1,212 10.0%

$3,293 27.0% $1,212 10.0%

Operating Profit % of Sales NOPAT % of Sales

$2,065 16.6% $1,342 10.8%

$2,408 19.2% $1,565 12.5%

$2,577 20.9% $1,675 13.6%

$3,470 29.3% $2,256 19.0%

$3,269 28.2% $2,125 18.4%

$3,913 32.9% $2,544 21.4%

$4,219 34.8% $2,742 22.6%

$4,341 35.7% $2,822 23.2%

$4,393 36.1% $2,856 23.5%

$4,447 36.5% $2,891 23.7%

ROIC

21.7%

25.2%

27.0%

36.4%

34.3%

41.0%

44.2%

45.5%

46.1%

46.6%

Average Rate per Day Growth Y/Y Number of Transaction Days Utilization Rental Rate Sales

59

Debt Maturity Corporate Debt Maturity Schedule ($ mn) (Weighted Average Interest Rate 5.51%) $3,000 $2,500 $2,000 $2,081 $1,500 $1,000 $1,250

$500 $700

$475 '14

$500

$500

'21

'22

$195

$0 '13

$700

'15

'16

'17

'18

Fixed

Floating

'19

'20

'28

60

Appendix C: Management

61

Key Management Biographies Name

Mark P. Frissora Chairman & CEO

Elyse Douglas Chief Financial Officer

Scott Sider

Biography  Joined Hertz as CEO and Director in July 2006; elected as Chairman in January 2007  Prior to joining Hertz, served as Chairman and CEO of Tenneco Inc. (NYSE:TEN) from 2000 and as President of the automotive operations of Tenneco Inc. from 1999 to 2006. From 1996 to 1999, held various positions within Tenneco Inc.'s automotive operations  Previously worked at Aeroquip Vickers, General Electric, and Philips Lighting Company  Currently serves as a Director of Walgreen Co. and Delphi Automotive PLC  Joined Hertz as Treasurer in July 2006 and became CFO in October 2007  Prior to joining Hertz, served as Treasurer of Coty Inc. from 1999 until 2006  Previously served as an Assistant Treasurer of Nabisco from 1995 to 1999. Also served in various financial services capacities for 12 years at Chase Manhattan Bank (now JPMorgan Chase)  CPA and has three years experience in public accounting  Currently serves as a Director of Assurant Inc.  Joined Hertz in 1983 and currently serves as President, Car Rental and Leasing, the Americas  Also oversees the fleet planning and re-marketing functions for the Americas  Has held several senior management positions in the U.S. car rental business since 1983, including Manhattan Area Manager, Vice President of the New England, West Central and Western Regions and, since 2008, Vice President and President, Off-Airport Operations for North America

President, Vehicle Rental

62

Track Record vs. Management Guidance  Management has proven to be very conservative in its financial guidance. Since CEO Mark Frissora joined Hertz in July 2006, management has beat the high end of its guidance every year, except in 2008 Guidance Revenue Corporate EBITDA Adjusted EPS

2007 2008 $8,500-$8,600 $8,900-$9,000 $1,540-$1,570 $1,575-$1,615 $1.15-1.22 $1.38-1.44

2009 no guidance no guidance no guidance

2010 2011 2012 $7,400-$7,600 $7,950-$8,100 $8,850-$8,950 $1,045-$1,060 $1,265-$1,305 $1,520-$1,590 $0.37-0.39 $0.75-$0.81 $1.16-$1.26

Actual Revenue Corporate EBITDA Adjusted EPS

2007 $8,686 $1,542 $1.26

2008 $8,525 $1,100 $0.42

2009 $7,102 $980 $0.29

2010 $7,563 $1,101 $0.52

2011 $8,298 $1,390 $0.97

2012 $9,021 $1,636 $1.33

 We believe management's 2013 estimates are extremely conservative

Revenue Corporate EBITDA Adjusted EPS

2013 Management's Consensus Guidance Estimates $10,850-$10,950 $10,898 $2,210-$2,270 $2,212 $1.82-1.92 $1.89

63

Track Record vs. Consensus Estimates  Since CEO Mark Frissora took office in July 2006, Hertz has beat consensus estimates 21 of the past 25 quarters, including the last 15 quarters in a row Period Q4 12 Q3 12 Q2 12 Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Q4 09

Actual Consensus Beat Beat / Result Estimate Consensus Miss % $0.33 $0.31 yes 5% $0.63 $0.61 yes 4% $0.35 $0.32 yes 9% $0.05 $0.00 yes 2,400% $0.24 $0.20 yes 20% $0.51 $0.50 yes 3% $0.26 $0.21 yes 22% ($0.03) ($0.04) yes 27% $0.10 $0.07 yes 37% $0.40 $0.37 yes 7% $0.14 $0.12 yes 18% ($0.12) ($0.13) yes 8% $0.06 $0.01 yes 500%

Period Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Q1 07 Q4 06

Actual Consensus Beat Beat / Result Estimate Consensus Miss % $0.31 $0.22 yes 41% $0.12 $0.11 yes 12% ($0.25) ($0.22) no (14%) ($0.22) $0.07 no nm $0.33 $0.53 no (38%) $0.30 $0.31 no (4%) $0.02 $0.01 yes 300% $0.29 $0.26 yes 12% $0.65 $0.57 yes 15% $0.30 $0.26 yes 14% $0.02 ($0.05) yes nm $0.14 $0.13 yes 12%

Given management's impressive track record, we believe they are extremely conservative in nature and the $600 million Dollar Thrifty synergies estimates is very achievable

64

Management's Incentives Aligned with Shareholders Compensation Incentives

EVA Weighting in Incentive Comp Increasing

 Cash Incentives Aligned with Shareholders Based 40% on Economic Value Added (“EVA”). This incentive was introduced in 2010 and increased in 2011 –

Increases in EVA are highly correlated with shareholder returns

–

The increased weighting reflects management's confidence in generating returns on capital above its cost of capital over the long term

–

$300 million of incremental EVA has been generated since 2009

–

Hertz's top 400 managers are paid based on EVA



Based 40% on adjusted pre-tax income



Based 20% on revenue

 Stock Incentives Aligned with Shareholders 

CEO Mark Frissora owns 1.4% of the company

EVA Weighting



50% 40%

40%

2011

2012

40% 30% 30% 20% 10% 0% 0% 2009

2010

“I think the competitors have all settled on the market share numbers that they're at right now. I don't think anyone in the industry is looking to cut price. The fleets right now are adequate, so we feel pretty good about the fact that the industry is very rational.” – CEO Mark Frissora

“We have a very EVA/asset-light strategy focus in the company today.” “We have a very positive movement in economic value added, 40% of my bonus and the top 400 managers in the Company is tied to EVA.” – CEO Mark Frissora

New focus on EVA reflects structurally healthier industry and company

65

Appendix D: Ownership

66

Private Equity Ownership  In December 2005, Clayton, Dubilier & Rice (CDR), The Carlyle Group (Carlyle), and Merrill Lynch (collectively, the “Sponsors”) acquired Hertz from Ford Holdings for $5.6 billion ($2.3 billion in equity)  Over the past three years, the company's Private Equity Sponsors have been gradually divesting their stakes 

In the past six months, the Sponsors sold 110 million, reducing their stake from 38% to 13%

Sponsors Ownership % 80%

72% 55%

60%

55%

51%

51% 38%

40%

26% 20%

13%

0%

2006

2007

2008

2009

2010

2011

2012

2013

Sponsors Investment History  The Sponsors have been invested in Hertz since 2005 and have generated a strong return on its investment Dec-05 Jun-06 Nov-06 Jun-07 May-09 Mar-11 Dec-12 Mar-13 Apr-13 Investment ($2,300) ($200) Special Dividend $991 $260 Shares Sold $1,111 $782 $789 $1,209 Remaining Shares $1,316 Total Cash Flows ($2,300) $991 $260 $1,111 ($200) $782 $789 $1,209 $1,316

Sponsors' IRR 33% Cash-on-Cash Return 2.6x

67

Current Shareholder Base Shares 44.4 22.8 20.3 17.6 15.9 15.5 14.4 14.1 11.7 10.5 9.6 9.1 7.5 7.3 6.6

Market % of Value CSO $1,053 11.1% 542 5.7% 482 5.1% 418 4.4% 378 4.0% 369 3.9% 342 3.6% 334 3.5% 276 2.9% 250 2.6% 229 2.4% 217 2.3% 178 1.9% 174 1.8% 157 1.7%

Investor Shares PE Owners (CD&R, Carlyle, Merrill Lynch) 48.7 CEO Mark Frissora 2.2 Other Insiders 1.7

Market % of Value CSO 1,155 12.2% 53 0.5% 39 0.4%

Investor Wellington Management Clayton, Dubilier & Rice Carlyle Group The Vanguard Group Wells Capital Management BlackRock T. Rowe Price Highbridge Capital Management York Capital Management Lord, Abbett & Co. UBS Global Asset Management Columbia Wanger Asset Management Discovery Capital Management Owl Creek Asset Management Columbus Circle Investors

Investor SRS Investment Management BNP Paribas Investment Partners S.A.C. Capital Merrill Lynch Senator Investment Group State Street Global Advisors Systematic Financial Management Fir Tree Partners Valinor Management The Roosevelt Investment Group Norges Bank Investment Management Fidelity Investments Goldman Sachs Westchester Capital Management Columbia Management

Shares 6.0 5.9 5.7 5.5 5.3 4.7 4.5 3.9 3.5 3.4 3.4 3.4 3.3 3.3 3.1

Market % of Value CSO $142 1.5% 140 1.5% 136 1.4% 131 1.4% 126 1.3% 112 1.2% 108 1.1% 92 1.0% 82 0.9% 82 0.9% 81 0.9% 81 0.9% 79 0.8% 78 0.8% 73 0.8%

Key Shareholders Summary

68

Appendix E: Additional Analysis

69

Industry’s Improved Pricing Sustainable?  Today, the U.S. car rental industry has three players that make up 95% of the market: Hertz, Avis, and Enterprise. From the blatant price signaling in earnings call and conference call transcripts, it is clear that Hertz and Avis are focused on profitability and keeping the industry’s car rental rates high. The main question is whether or not privately-held Enterprise will follow.  There are four main reasons why we believe Enterprise will cooperate with Hertz and Avis’ pricing increases: 1  The industry’s price spoiler has historically been Dollar Thrifty, who is now owned by Hertz

2  Since the Dollar Thrifty acquisition closed in November 2012, Enterprise has matched the price increases by Avis

and Hertz 3  It no longer makes sense to lower prices because none of the three remaining players have dominant market share.

If Enterprise lowers prices, Hertz and Avis will follow and no one will gain market share. Lower pricing would only result in lower profitability for all three players 4  Due to auto OEM restructurings and more rational car production, car rental companies finally have right-sized

fleets. With utilization rates at all time highs, there is no longer incentive to lower prices to raise utilization rates

70

Rental Car Pricing Sources Auto Rental News  Auto Rental News publishes monthly auto rental rate surveys for six major airports: BOS, MIA, ORD, HOU, SEA and LAX. The rates are based on weekly surveys and are published monthly May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Pre-DTG Acquisition (5%) (22%) (19%) (11%) (6%) (4%) Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Post-DTG Acquisition 18% 48% 15% 12% 8%

Sell-Side Analysts “Our research suggests rental car pricing in 1Q13 continued to firm, and was likely up year-over-year throughout the quarter. In regards to monthly performance, improvements in March were the strongest of the quarter.” – Northcoast Research, April 2013 “Avis initiated another price increase effective for Apr 8, which was quickly followed by Enterprise.” – Morgan Stanley, March 2013

Hertz and Avis Earnings Calls

Dec 2012 Jan 2013 Feb 2013 Mar 2013

Avis North America > +1.0% > +5.0% > +3.0% ~ +4.0%

Hertz Hertz Dollar Thrifty US Airport Total +1.6% +4.6% +6.0% +2.6%

“We instituted 2 price increases for January, 2 for February and 2 effective for March rentals. January pricing was up yearover-year, more in fact than December was, and our existing reservations give us a measure of confidence that pricing could end the quarter being positive.” – Avis CEO, February 2013

USA Today “Enterprise says rates at some of the top 200 airports their brands serve were up to 4% higher in February than during that month last year.” – USA Today, February 2013

71

Why Hertz Over Avis?  Because of the improved pricing environment, we believe both Hertz and Avis are attractive investment opportunities. However, we favor Hertz over Avis for the following reasons: 1  Management: Hertz’s CEO Mark Frissora is extremely well-regarded in the industry. Since Frissora joined in July

2006, Hertz has beaten management’s guidance every year except for in 2008 and the company has beaten consensus estimates for the past 15 quarters in a row. Prior to joining Hertz in July 2006, Frissora had a phenomenal track record at Tenneco –

During Frissora’s tenure as CEO of Tenneco (1999-2006), the company dramatically improved its operating efficiency and financial performance, which translated into significant increases in Tenneco’s market capitalization. In 2004, Tenneco earned the industry’s top award for auto supply companies, which recognized the company for delivering the highest shareholder returns – 158% in one year and 745% in three years – of any global automotive supplier

2  Dollar Thrifty Acquisition: After taking into account synergies, Hertz paid less than 3.0x EBITDA to acquire

Dollar Thrifty, which we believe was a very prudent deal for management 3  Zipcar Acquisition: In March 2013, Avis acquired Zipcar for $500 million to enter the Hourly Rentals segment.

Hertz acquired technology to implement hourly rental capabilities in its fleet and will have its entire fleet upgraded with hourly rental technology by 2014 for a fraction of the cost

72

European Car Rental Market European Car Rental Market Share

Sixt 10% National Alamo 5% Other 29%

 Highly fragmented market, with large percentage of independent and small car-rental companies. Analysts expect industry to consolidate over the next five years  Plans to implement three brand offering across Europe  Hertz: premium  Dollar Thrifty: mid-tier  Firefly (formerly Advantage): value  Dollar Thrifty opportunity in Europe Size of European Car Rental Market (millions) $13,000 Low Base High Size of Market $13,000 $13,000 $13,000 Dollar Thrifty Market Share 1% 2% 3% Dollar Thrifty Revenue $130 $260 $390

Hertz 16%

Europcar 21%

Avis Budget 18%

~$13.0 billion market

Pre-Tax Margin Pre-Tax Income Taxes @ 35% Net Income

20.0% $26 $9 $17

22.5% $59 $20 $38

25.0% $98 $34 $63

Shares Outstanding EPS Impact

427 $0.04

427 $0.09

427 $0.15

73

Economic Downturn  The rental car industry is not as cyclical as intuition would suggest. 

During phases of weak demand, car rental companies cut down their fleet size by selling cars



This reduces capacity, balancing supply-demand and keeping pricing stable

 Hertz has been profitable through business cycles 

During 2008 and 2009, Hertz generated pre-tax income of $237 and $199 respectively by reducing fleet size by 1% and 10% respectively to maintain supply-demand balance



Furthermore, Hertz's mix shift to off-airport locations, especially the non-cyclical insurance market, mitigates risk of cyclical earnings and cash flows

74

Debunking Myths About Hertz 

More than 70% of Hertz's fleet is acquired using fleet debt, which is non-recourse to the company. Fleet interest expense is akin to cost of goods sold. Acquiring fleet does not tie up significant capital.



Non-fleet capex is relatively small, especially given technological changes that allow Hertz to expand its network without major infrastructure investments.



Car rental is a good business, as evidenced by a long history of relatively stable market share among competitors and a recent history of >10% ROICs.

Myth #2



Car rental is a commodity business

Hertz's subpar profitability from 2005-2009 was the result of inefficient operations, excess capacity in U.S. auto makers, and poor fleet management. These issues are now fixed.



Over 37% of transactions were made by Hertz Gold Club Members. Gold Club Members are 3x more likely to rent from Hertz over other companies.



The company has a 99.3% retention rate on corporate contracts.



Over 40.5 million used cars were sold in the U.S. in 2012 – the used car market is extremely large, efficient, and liquid. After 9/11, used car prices rebounded in four months. After the financial crisis, prices bounced back in six months.



All rental car companies are equally affected by changes in used car prices. If prices fall more than expected, rental car companies can raise prices to maintain profitability (72% R-squared).



Lower used car prices are correlated with lower new car prices (81% R-squared).

Myth #1 Car rental is too capital intensive

Myth #3 Used car prices are a big unknown

75

Stock Price History – IPO to Today $30 $25

March 2007: Enterprise announces Alamo / National acquisition 2008-2009 Recession

November 2012: Hertz closes Dollar Thrifty acquisition

April 2010: Hertz announces bid for Dollar Thrifty

$20 $15

June 2011: Avis announces Avis Europe acquisition

March 2009: Hertz announces Advantage acquisition

$10 $5

February 2013: Hertz increases synergies estimate from $160 million to $600 million

$0

76

Competitor Overview – Avis Business Description

Rental Locations

 Car Rental (2012 rev: $7.0bn): Operates through the Avis, Budget, and ZipCar brands. Rents cars that the company owns or leases. Maintains a substantial network of car rental locations both in the United States and internationally. Rental fleet of 496,000 vehicles. The company completed more than 29 million vehicle rental transactions worldwide. 71% of revenue generated onairport, 29% generated off-airport  Truck Rental (2012 rev: $0.4bn): Operates through the Budget brand.

Revenue Breakdown Truck Rental 5%

Segment Intl Car Rental 32%

Geography

NA Car Rental 63%

Intl 32%

 With the acquisition of Dollar Thrifty, the Company has over 10,000 locations across the United States and 17 other countries North America

Intl

Total

Avis Company-operated Licensee Total Avis

1,350 300 1,650

1,300 2,800 4,100

2,650 3,100 5,750

Budget Company-operated Licensee Total Budget

1,000 400 1,400

550 1,200 1,750

1,550 1,600 3,150

Combined

3,050

5,850

8,900

NA 68%

77

Fit with Pershing Square Criteria

Criteria Expected Profit ($MM) Expected Return (IRR) Upside/Downside Realization Horizon Target TEV Buy Liquidity Sell Liquidity Domicle Strategy Corporate Resilence Governance Stance Value Ascertainability

Ideal $300+ 40%+ 4 to 1 1 year $5bn+ 2 months 2 months Domestic (English) Value/Large MoS Intrinsic Uncontrolled Passive High

Acceptable $150+ 25%+ 3 to 1 2 years $2bn+ < 3 months < 3 months Foreign (English) Value/Free Growth Extrinsic/Deep Value Rational Large Shareholder Active Moderate

Hertz $300+ 50%+ 2.6 to 1 1 year $16bn 1.5 months 1.5 months Domestic (English) Value/Free Growth Intrinsic Uncontrolled Passive High

78

Appendix F: Downside Case Financials

79

Model Summary – Downside Case ($ in millions, except per share data) Income Statement Metrics Total Revenue Total Revenue Growth Car Rental Equipment Rental EBITDA EBITDA Margin Net Interest Expense EBT EBT Margin Car Rental Equipment Rental Cash Tax Expense Net Income on Operating Basis EPS EPS Growth Balance Sheet Metrics Net Debt Total Debt to Equity Net Debt / EBITDA Return on Equity Return on Invested Capital Return on Assets Cash Flow Metrics Cash Flow - Operating Capex FCF

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

$8,525 (1.8%) 0.8% (5.5%) 1,240 14.5% 429 238 2.8% 4.2% 16.4% 81 136 $0.42 nm

$7,102 (16.7%) (12.8%) (33.0%) 998 14.1% 404 199 2.8% 7.8% 6.9% 68 117 $0.31 (25.5%)

$7,563 6.5% 8.5% (3.7%) 1,089 14.4% 436 347 4.6% 9.9% 7.3% 118 212 $0.51 63.6%

$8,298 9.7% 9.2% 13.0% 1,356 16.3% 279 681 8.2% 12.0% 13.3% 231 430 $0.97 88.0%

$9,021 8.7% 7.8% 14.5% 1,607 17.8% 274 901 10.0% 13.4% 16.4% 306 595 $1.33 37.4%

$10,814 19.9% 22.3% 6.6% 2,033 18.8% 442 1,118 10.3% 15.5% 15.4% 380 738 $1.59 19.8%

$11,192 3.5% 3.2% 5.6% 2,261 20.2% 423 1,343 12.0% 16.8% 17.1% 457 886 $1.90 19.5%

$11,668 4.3% 4.2% 4.6% 2,429 20.8% 319 1,593 13.7% 17.5% 18.9% 542 1,051 $2.24 18.0%

$11,985 2.7% 2.8% 2.3% 2,516 21.0% 290 1,696 14.2% 17.7% 19.6% 577 1,120 $2.38 6.0%

$12,325 2.8% 2.9% 2.3% 2,613 21.2% 242 1,828 14.8% 17.9% 20.2% 622 1,207 $2.55 7.2%

3,260 3.12x 2.63x 9.3% 7.3% 2.7%

3,339 2.25x 3.34x 5.6% 5.9% 2.5%

3,249 2.77x 2.98x 10.1% 6.5% 3.0%

3,465 2.11x 2.55x 19.2% 9.1% 3.6%

5,440 2.61x 3.38x 23.7% 8.6% 3.3%

4,582 1.78x 2.25x 21.0% 10.5% 4.3%

3,253 1.36x 1.44x 20.8% 11.6% 4.9%

1,619 1.03x 0.67x 20.4% 12.1% 5.3%

(156) 0.73x (0.06x) 18.5% 12.5% 5.5%

(2,075) 0.49x (0.79x) 17.1% 13.0% 5.9%

2,096 1,317 779

1,775 1,579 196

2,209 1,063 1,146

2,233 1,832 402

2,718 2,663 55

3,463 2,604 859

4,069 2,740 1,329

4,539 2,905 1,634

4,752 2,977 1,775

4,970 3,051 1,919

80

Income Statement – Downside Case ($ in millions, except per share data) Net Sales

2008 $8,525

2009 $7,102

2010 $7,563

Fiscal Year Ending December 2011 2012 2013e 2014e $8,298 $9,021 $10,814 $11,192 Bloomberg Consensus: $10,911 $11,695

Expenses: Direct Operating 4,930 4,084 4,283 4,566 4,796 Deprec. of revenue earning equip, leases 2,194 1,931 1,868 1,906 2,148 SG&A 769 641 665 745 946 Interest Expense 870 680 773 700 650 Interest Income 25 65 12 6 5 Impairments, Others 1,169 0 0 63 36 Total Expense 9,907 7,272 7,577 7,974 8,570 GAAP Pre-Tax Income (1,382) (171) (15) 324 451 Adjustments for non-cash and non-recurring items: Purchase Accounting 101 90 90 88 110 Non-Cash Debt Charges 100 172 183 130 84 Other charges 1,419 108 89 138 258 (Restructuring Charges, Derivative Loss, Pension Adjustment, Acquisition Charges, Other) Total Adjustments 1,620 370 362 356 451 Adjusted Pre-Tax Income 238 199 347 681 901 Cash Tax 81 68 118 231 306 Less: Noncontrolling interest 21 15 17 20 0 Net Income to Hertz 136 117 212 430 595 Diluted EPS $0.42 $0.31 $0.51 $0.97 $1.33 Bloomberg Consensus: Fully Diluted Share 323 372 412 445 448

2015e $11,668 $12,548

2016e $11,985

2017e $12,325

5,249 2,776 1,223 873 6 0 9,915 899

5,345 2,934 1,362 840 6 0 10,075 1,117

5,501 3,250 1,512 653 6 0 10,309 1,360

5,602 3,379 1,545 608 6 0 10,527 1,458

5,710 3,516 1,580 541 7 0 10,741 1,585

126 92 0

131 94 0

137 96 0

140 98 0

144 100 0

219 1,118 380 0 738 $1.59 $1.90 464

225 1,343 457 0 886 $1.90 $2.38 466

233 1,593 542 0 1,051 $2.24 $2.68 469

238 1,696 577 0 1,120 $2.38

244 1,828 622 0 1,207 $2.55

471

473

81

EBITDA Reconciliation – Downside Case ($ in millions, except per share data) Car Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments - Car rental fleet interest - Car rental fleet depreciation + Non-cash expenses & charges + Extraordinary, unusual charges RAC Segment EBITDA Equipment Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments + Non-cash, extraordinary, unusual charges HERC Segment EBITDA Other reconciling items: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Noncontrolling interest GAAP EBITDA before adjustments + Non-cash expenses & charges + Extraordinary, unusual charges Corporate Segment EBITDA Total Adjusted EBITDA

2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

(385) 2,107 445 443 2,610 425 1,844 83 108 532

190 1,785 302 0 2,276 316 1,614 130 105 582

442 1,724 390 0 2,556 377 1,595 135 30 749

756 1,774 329 0 2,858 313 1,651 33 24 950

784 2,007 312 0 3,103 297 1,876 41 136 1,107

1,324 2,643 410 0 4,377 390 2,486 49 0 1,550

1,496 2,790 395 0 4,681 376 2,627 51 0 1,728

1,624 3,099 307 0 5,030 294 2,929 53 0 1,860

1,687 3,225 289 0 5,202 278 3,051 55 0 1,928

1,759 3,360 270 0 5,389 260 3,181 56 0 2,005

(629) 417 111 111 624 106 731

(20) 383 53 0 416 39 455

(15) 338 39 0 363 35 398

69 324 45 0 439 42 481

152 356 52 0 561 25 586

175 391 66 0 632 0 632

212 411 65 0 687 0 687

251 429 51 0 731 0 731

267 439 48 0 754 0 754

284 450 44 0 779 0 779

(368) 6 307 (21) (76) 30 24 (23) 1,240

(340) 8 311 (15) (36) 37 (39) (38) 998

(442) 10 333 (17) (117) 37 21 (59) 1,089

(501) 11 321 (20) (188) 28 85 (74) 1,356

(486) 13 282 0 (191) 27 78 (86) 1,607

(600) 16 392 0 (192) 43 0 (150) 2,033

(590) 17 375 0 (199) 44 0 (155) 2,261

(515) 17 290 0 (208) 46 0 (162) 2,429

(496) 18 265 0 (213) 47 0 (166) 2,516

(459) 18 221 0 (220) 49 0 (171) 2,613

82

Balance Sheet – Downside Case ($ in millions, except per share data) Assets: Cash & ST investments Receivables Inventory Revenue Earning Equipment Other Property & Equipment Goodwill & Intangibles Other Total Assets Liabilities & S.E.: Payables Fleet Debt Corporate Debt, Leases Deferred Income Taxes Other Total Liabilities Shareholders' Equity Total Liabilities & S.E. Key Statistics: Net Debt Net Debt / Equity Net Debt / EBITDA Total Debt / Equity Receivables Turnover Receivables Days

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

1,326 1,911 96 8,692 1,255 2,886 287 16,451

1,351 1,325 93 8,852 1,188 2,893 300 16,002

2,582 1,357 87 8,924 1,164 2,879 353 17,345

1,240 1,616 84 10,105 1,252 2,954 422 17,674

1,105 1,887 106 12,908 1,436 5,374 470 23,286

1,677 2,412 127 12,520 1,457 5,273 470 23,936

2,564 2,496 131 12,103 1,071 5,169 470 24,004

3,697 2,602 137 11,525 539 5,060 470 24,031

4,585 2,673 140 10,884 (44) 4,948 470 23,656

5,544 2,749 144 10,172 (684) 4,833 470 23,229

931 6,387 4,586 1,482 1,577 14,963 1,488 16,451

659 5,675 4,689 1,471 1,410 13,905 2,097 16,002

954 5,476 5,831 1,508 1,457 15,226 2,118 17,345

897 6,612 4,705 1,688 1,535 15,439 2,235 17,674

999 8,903 6,545 2,700 1,631 20,779 2,507 23,286

1,198 8,636 6,259 2,700 1,631 20,423 3,513 23,936

1,240 8,348 5,816 2,700 1,631 19,734 4,270 24,004

1,292 7,949 5,316 2,700 1,631 18,889 5,142 24,031

1,327 7,507 4,428 2,700 1,631 17,594 6,062 23,656

1,365 7,016 3,469 2,700 1,631 16,181 7,048 23,229

3,260 2.19x 2.63x 3.08x 4.46x 80.7

3,339 1.59x 3.34x 2.24x 5.36x 67.2

3,249 1.53x 2.98x 2.75x 5.57x 64.6

3,465 1.55x 2.55x 2.11x 5.13x 70.1

5,440 2.17x 3.38x 2.61x 4.78x 75.3

4,582 1.30x 2.25x 1.78x 4.48x 80.3

3,253 0.76x 1.44x 1.36x 4.48x 80.3

1,619 0.31x 0.67x 1.03x 4.48x 80.3

(156) (0.03x) (0.06x) 0.73x 4.48x 80.3

(2,075) (0.29x) (0.79x) 0.49x 4.48x 80.3

83

Cash Flow Statement – Downside Case ($ in millions, except per share data) 2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

136 2,194 239 (331) (143) 2,096

117 1,931 226 316 (815) 1,775

212 1,868 219 270 (360) 2,209

430 1,906 228 (313) (17) 2,233

595 2,148 257 (190) (91) 2,718

738 2,776 297 (348) 3,463

886 2,934 296 (47) 4,069

1,051 3,250 297 (59) 4,539

1,120 3,379 293 (39) 4,752

1,207 3,516 289 (42) 4,970

(1,178) (139) (71) (79) (1,466)

(1,502) (77) (76) 35 (1,621)

(922) (140) (48) (1) (1,111)

(1,604) (228) (227) (30) (2,089)

(2,488) (175) (1,905) 90 (4,477)

(2,388) (216) (2,604)

(2,516) (224) (2,740)

(2,672) (233) (2,905)

(2,737) (240) (2,977)

(2,804) (247) (3,051)

Financing Activities: Proceeds from Debt Issuance, net Proceeds from Rev. Line of Credit Proceeds from Equity Issuance Dividends Paid Others Cash Flow from Financing Act.

(816) 199 (78) (695)

523 (1,126) 529 (54) (129)

(799) 1,026 (93) 134

(1,320) 57 (224) (1,487)

443 1,273 (92) 1,625

(36) (250) (286)

(193) (250) (443)

(250) (250) (500)

(888)

(959)

(888)

(959)

Cash Flow for Year Cash at Beginning of Year Cash at End of Year

(66) 1,391 1,326

25 1,326 1,351

1,231 1,351 2,582

(1,342) 2,582 1,240

(135) 1,240 1,105

573 1,105 1,677

886 1,677 2,564

1,134 2,564 3,697

888 3,697 4,585

959 4,585 5,544

779

196

1,146

859

1,329

1,634

1,775

1,919

Operating Activities: Net Income Revenue Earning Equip. D&A Other PPE D&A Changes in Working Capital Others Cash Flow from Operating Act. Investing Activities: Fleet Equip. Capex, net disposals Other PPE Capex, net Acquisitions, net cash acquired Others Cash Flow from Investing Act.

CFO less Capex (FCF)

402

55

84

Appendix G: Upside Case Financials

85

Model Summary – Upside Case ($ in millions, except per share data) Income Statement Metrics Total Revenue Total Revenue Growth Car Rental Equipment Rental EBITDA EBITDA Margin Net Interest Expense EBT EBT Margin Car Rental Equipment Rental Cash Tax Expense Net Income on Operating Basis EPS EPS Growth Balance Sheet Metrics Net Debt Total Debt to Equity Net Debt / EBITDA Return on Equity Return on Invested Capital Return on Assets Cash Flow Metrics Cash Flow - Operating Capex FCF

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

$8,525 (1.8%) 0.8% (5.5%) 1,240 14.5% 429 238 2.8% 4.2% 16.4% 81 136 $0.42 nm

$7,102 (16.7%) (12.8%) (33.0%) 998 14.1% 404 199 2.8% 7.8% 6.9% 68 117 $0.31 (25.5%)

$7,563 6.5% 8.5% (3.7%) 1,089 14.4% 436 347 4.6% 9.9% 7.3% 118 212 $0.51 63.6%

$8,298 9.7% 9.2% 13.0% 1,356 16.3% 279 681 8.2% 12.0% 13.3% 231 430 $0.97 88.0%

$9,021 8.7% 7.8% 14.5% 1,607 17.8% 274 901 10.0% 13.4% 16.4% 306 595 $1.33 37.4%

$11,182 24.0% 26.8% 8.6% 2,593 23.2% 386 1,723 15.4% 20.8% 16.3% 586 1,137 $2.45 84.6%

$12,078 8.0% 8.1% 7.6% 3,266 27.0% 350 2,394 19.8% 25.1% 17.7% 814 1,580 $3.39 38.3%

$12,860 6.5% 6.5% 6.6% 3,505 27.3% 203 2,746 21.4% 25.3% 18.1% 934 1,812 $3.87 14.1%

$13,341 3.7% 3.8% 3.3% 3,656 27.4% 170 2,911 21.8% 25.5% 18.3% 990 1,921 $4.08 5.5%

$13,863 3.9% 4.0% 3.3% 3,823 27.6% 134 3,094 22.3% 25.7% 18.5% 1,052 2,042 $4.31 5.7%

3,260 3.12x 2.63x 9.3% 7.3% 2.7%

3,339 2.25x 3.34x 5.6% 5.9% 2.5%

3,249 2.77x 2.98x 10.1% 6.5% 3.0%

3,465 2.11x 2.55x 19.2% 9.1% 3.6%

5,440 2.61x 3.38x 23.7% 8.6% 3.3%

4,139 1.57x 1.60x 30.3% 14.4% 5.8%

2,487 0.95x 0.76x 29.8% 17.5% 7.3%

618 0.58x 0.18x 25.5% 17.3% 7.6%

(1,423) 0.35x (0.39x) 21.4% 16.8% 7.7%

(3,617) 0.16x (0.95x) 18.6% 16.7% 7.8%

2,096 1,317 779

1,775 1,579 196

2,209 1,063 1,146

2,233 1,832 402

2,718 2,663 55

3,910 2,608 1,302

4,440 2,788 1,652

4,852 2,982 1,869

5,084 3,043 2,040

5,301 3,107 2,195

86

Income Statement – Upside Case ($ in millions, except per share data) Net Sales

2008 $8,525

2009 $7,102

2010 $7,563

Fiscal Year Ending December 2011 2012 2013e 2014e $8,298 $9,021 $11,182 $12,078 Bloomberg Consensus: $10,911 $11,695

Expenses: Direct Operating 4,930 4,084 4,283 4,566 4,796 Deprec. of revenue earning equip, leases 2,194 1,931 1,868 1,906 2,148 SG&A 769 641 665 745 946 Interest Expense 870 680 773 700 650 Interest Income 25 65 12 6 5 Impairments, Others 1,169 0 0 63 36 Total Expense 9,907 7,272 7,577 7,974 8,570 GAAP Pre-Tax Income (1,382) (171) (15) 324 451 Adjustments for non-cash and non-recurring items: Purchase Accounting 101 90 90 88 110 Non-Cash Debt Charges 100 172 183 130 84 Other charges 1,419 108 89 138 258 (Restructuring Charges, Derivative Loss, Pension Adjustment, Acquisition Charges, Other) Total Adjustments 1,620 370 362 356 451 Adjusted Pre-Tax Income 238 199 347 681 901 Cash Tax 81 68 118 231 306 Less: Noncontrolling interest 21 15 17 20 0 Net Income to Hertz 136 117 212 430 595 Diluted EPS $0.42 $0.31 $0.51 $0.97 $1.33 Bloomberg Consensus: Fully Diluted Share 323 372 412 445 448

2015e $12,860 $12,548

2016e $13,341

2017e $13,863

5,474 2,543 1,361 712 6 0 9,683 1,499

5,675 2,626 1,554 674 7 0 9,922 2,156

6,025 2,787 1,635 525 7 0 10,365 2,495

6,239 2,882 1,685 490 7 0 10,688 2,652

6,470 2,984 1,739 450 8 0 11,036 2,827

130 94 0

140 99 0

149 102 0

154 105 0

160 107 0

224 1,723 586 0 1,137 $2.45 $1.90 464

238 2,394 814 0 1,580 $3.39 $2.38 466

251 2,746 934 0 1,812 $3.87 $2.68 469

259 2,911 990 0 1,921 $4.08

267 3,094 1,052 0 2,042 $4.31

471

473

87

EBITDA Reconciliation – Upside Case ($ in millions, except per share data) Car Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments - Car rental fleet interest - Car rental fleet depreciation + Non-cash expenses & charges + Extraordinary, unusual charges RAC Segment EBITDA Equipment Rental Segment: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Impairment charges GAAP EBITDA before adjustments + Non-cash, extraordinary, unusual charges HERC Segment EBITDA Other reconciling items: GAAP Pre-tax income + D&A and other purchase accounting + Interest, net of interest income + Noncontrolling interest GAAP EBITDA before adjustments + Non-cash expenses & charges + Extraordinary, unusual charges Corporate Segment EBITDA Total Adjusted EBITDA

2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

(385) 2,107 445 443 2,610 425 1,844 83 108 532

190 1,785 302 0 2,276 316 1,614 130 105 582

442 1,724 390 0 2,556 377 1,595 135 30 749

756 1,774 329 0 2,858 313 1,651 33 24 950

784 2,007 312 0 3,103 297 1,876 41 136 1,107

1,882 2,410 299 0 4,591 286 2,247 51 0 2,108

2,484 2,483 297 0 5,264 285 2,308 55 0 2,727

2,670 2,635 295 0 5,600 283 2,448 59 0 2,928

2,792 2,726 292 0 5,811 281 2,532 61 0 3,059

2,929 2,824 289 0 6,042 278 2,623 63 0 3,204

(629) 417 111 111 624 106 731

(20) 383 53 0 416 39 455

(15) 338 39 0 363 35 398

69 324 45 0 439 42 481

152 356 52 0 561 25 586

192 400 47 0 639 0 639

229 431 47 0 707 0 707

251 459 47 0 756 0 756

263 475 46 0 783 0 783

275 491 45 0 811 0 811

(368) 6 307 (21) (76) 30 24 (23) 1,240

(340) 8 311 (15) (36) 37 (39) (38) 998

(442) 10 333 (17) (117) 37 21 (59) 1,089

(501) 11 321 (20) (188) 28 85 (74) 1,356

(486) 13 282 0 (191) 27 78 (86) 1,607

(576) 17 360 0 (199) 44 0 (155) 2,593

(557) 18 324 0 (215) 48 0 (168) 3,266

(426) 19 177 0 (229) 51 0 (179) 3,505

(402) 20 145 0 (238) 53 0 (185) 3,656

(377) 21 109 0 (247) 55 0 (193) 3,823

88

Balance Sheet – Upside Case ($ in millions, except per share data) Assets: Cash & ST investments Receivables Inventory Revenue Earning Equipment Other Property & Equipment Goodwill & Intangibles Other Total Assets Liabilities & S.E.: Payables Fleet Debt Corporate Debt, Leases Deferred Income Taxes Other Total Liabilities Shareholders' Equity Total Liabilities & S.E. Key Statistics: Net Debt Net Debt / Equity Net Debt / EBITDA Total Debt / Equity Receivables Turnover Receivables Days

Fiscal Year Ending December 2011 2012 2013e

2008

2009

2010

2014e

2015e

2016e

2017e

1,326 1,911 96 8,692 1,255 2,886 287 16,451

1,351 1,325 93 8,852 1,188 2,893 300 16,002

2,582 1,357 87 8,924 1,164 2,879 353 17,345

1,240 1,616 84 10,105 1,252 2,954 422 17,674

1,105 1,887 106 12,908 1,436 5,374 470 23,286

1,756 2,178 131 12,750 1,457 5,270 470 24,012

2,581 2,353 142 12,671 1,413 5,157 470 24,786

3,516 2,505 151 12,609 1,401 5,037 470 25,689

4,536 2,599 156 12,503 1,360 4,913 470 26,538

5,414 2,700 162 12,348 1,286 4,784 470 27,165

931 6,387 4,586 1,482 1,577 14,963 1,488 16,451

659 5,675 4,689 1,471 1,410 13,905 2,097 16,002

954 5,476 5,831 1,508 1,457 15,226 2,118 17,345

897 6,612 4,705 1,688 1,535 15,439 2,235 17,674

999 8,903 6,545 2,700 1,631 20,779 2,507 23,286

1,238 8,794 5,894 2,700 1,631 20,258 3,754 24,012

1,338 8,739 5,069 2,700 1,631 19,477 5,310 24,786

1,424 8,697 4,134 2,700 1,631 18,586 7,103 25,689

1,478 8,624 3,114 2,700 1,631 17,546 8,991 26,538

1,535 8,517 1,797 2,700 1,631 16,180 10,985 27,165

3,260 2.19x 2.63x 3.08x 4.46x 80.7

3,339 1.59x 3.34x 2.24x 5.36x 67.2

3,249 1.53x 2.98x 2.75x 5.57x 64.6

3,465 1.55x 2.55x 2.11x 5.13x 70.1

5,440 2.17x 3.38x 2.61x 4.78x 75.3

4,139 1.10x 1.60x 1.57x 5.13x 70.1

2,487 0.47x 0.76x 0.95x 5.13x 70.1

618 0.09x 0.18x 0.58x 5.13x 70.1

(1,423) (0.16x) (0.39x) 0.35x 5.13x 70.1

(3,617) (0.33x) (0.95x) 0.16x 5.13x 70.1

89

Cash Flow Statement – Upside Case ($ in millions, except per share data) 2008

2009

2010

Fiscal Year Ending December 2011 2012 2013e

2014e

2015e

2016e

2017e

136 2,194 239 (331) (143) 2,096

117 1,931 226 316 (815) 1,775

212 1,868 219 270 (360) 2,209

430 1,906 228 (313) (17) 2,233

595 2,148 257 (190) (91) 2,718

1,137 2,543 307 (77) 3,910

1,580 2,626 320 (86) 4,440

1,812 2,787 327 (75) 4,852

1,921 2,882 326 (46) 5,084

2,042 2,984 325 (50) 5,301

(1,178) (139) (71) (79) (1,466)

(1,502) (77) (76) 35 (1,621)

(922) (140) (48) (1) (1,111)

(1,604) (228) (227) (30) (2,089)

(2,488) (175) (1,905) 90 (4,477)

(2,384) (224) (2,608)

(2,547) (242) (2,788)

(2,725) (257) (2,982)

(2,777) (267) (3,043)

(2,829) (277) (3,107)

Financing Activities: Proceeds from Debt Issuance, net Proceeds from Rev. Line of Credit Proceeds from Equity Issuance Dividends Paid Others Cash Flow from Financing Act.

(816) 199 (78) (695)

523 (1,126) 529 (54) (129)

(799) 1,026 (93) 134

(1,320) 57 (224) (1,487)

443 1,273 (92) 1,625

(401) (250) (651)

(576) (250) (826)

(685) (250) (935)

(1,020)

(1,317)

(1,020)

(1,317)

Cash Flow for Year Cash at Beginning of Year Cash at End of Year

(66) 1,391 1,326

25 1,326 1,351

1,231 1,351 2,582

(1,342) 2,582 1,240

(135) 1,240 1,105

651 1,105 1,756

826 1,756 2,581

935 2,581 3,516

1,020 3,516 4,536

878 4,536 5,414

779

196

1,146

1,302

1,652

1,869

2,040

2,195

Operating Activities: Net Income Revenue Earning Equip. D&A Other PPE D&A Changes in Working Capital Others Cash Flow from Operating Act. Investing Activities: Fleet Equip. Capex, net disposals Other PPE Capex, net Acquisitions, net cash acquired Others Cash Flow from Investing Act.

CFO less Capex (FCF)

402

55

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Appendix H: Team Member Bios

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Team Member Bios Richard Hunt ([email protected]) Richard is a first-year student at Columbia Business School. Richard is Co-President of the Columbia Student Investment Management Association. Prior to CBS, Richard was a Senior Financial Analyst at New Constructs. Richard received a B.B.A. in Economics and Finance from University of Kentucky.

Stephen Lieu ([email protected]) Stephen is a first-year student at Columbia Business School. Stephen is Co-President of the Columbia Student Investment Management Association. Prior to CBS, Stephen worked for four years in investment banking and private equity. Stephen received a B.S. in Economics from the Wharton School, University of Pennsylvania. Rahul Raymoulik ([email protected]) Rahul is a first-year student at Columbia Business School. Prior to business school, Rahul was a Sector Specialist at Fidelity Investments, initially in Boston and later in Tokyo. Rahul focused on the media and telecom industries in the U.S. and the technology industry in Asia. Rahul received a B.S. in Information Science from Northeastern University and an M.S. in Finance from Boston College.

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Thank you for your time!

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