The report recommends a hold on Hertz stock with a one-year target price of $13.86, a 40% increase from the current price. While Hertz offers great return potential, the hold recommendation is issued because the target price is lower than analyst consensus and the stock has high risk. Key growth drivers are the low oil price environment benefiting airlines and car rentals, and the planned spinoff of Hertz's equipment rental business. Major risks include accounting issues, price pressure, and competition from car sharing services.

1. Fordham Securities
This report is published for educational purposes only by
Tim (Ngoc Do) – ndo2@fordham.edu
Date: April, 2016
Industry: Rental And Leasing
LET’S GET THE ENGINES STARTED…
We issue a Hold recommendation on Hertz with a one-year target price
of $13.86 using the Discounted Free Cash Flow Model. This offers a
40% increase from its closing price of $9.85 on Apr 6th
, 2016. Even
though HTZ offers great return, we issue a Hold because our target price
is lower than concencus and the stock has high risk.
Year Revenue EBITDA1
EBIT PAT EPS2
PE
2015A 10,535 1,415 1,063 504 1.11 16.2x
2016P 10,679 1,635 1,284 460 1.05 9.4x
2017P 10,978 1,745 1,457 543 1.23 8.0x
2018P 11,274 1,866 1,591 624 1.41 7.0x
2019P 11,580 1,939 1,665 669 1.50 6.6x
2020P 11,895 2,015 1,741 715 1.60 6.2x
Major growth drivers include:
• Low oil price environment fosters the Airline industry, which
directly and positively impacts Car rentals, Hertz’s main business
segment
• The promising spin off of Hertz’s equipment rental business
Major risks include:
• Accounting standard risk – recent delay company filings
• High price pressure and lower revenue per vehicle
• Evolving competitive landscape with Car-Sharing Rentals (Zipcar)
Company Overview
Hertz is one of the premier brands in the rental car industry with
approximately 11,555 locations in 145 countries. Hertz has been in the car-
rental business since 1918 and in the equipment-rental business since 1965.
Hertz Share Price Data
1
Using Corporate Adjusted EBITDA (does not include depreciation and amortization from rental fleet), and Corporate Net Debt (does not include fleet debt)
2
Recent company guidance: Corporate Adjusted EBITDA $1.6-$1.7B, EPS 0.95-1.10, and effective tax rate of 37%
Ticker: NYSE: HTZ Recommendation: Neutral
Price: 9.85 (April 6, 2016) Target Price:$13.86
Time Horizon: One Year
HERTZ
GLOBAL
HOLDINGS
(‘HERTZ’)
Market Profile
Closing Price (USD) 9.8
52-Week Range 6.9-22.6
Share Outstandings (M) 424.4
Market Cap (M) 4,000
P/E 16.0
EV/EBITDA 4.9x
Source: Yahoo Finance, Thompson One, Team
Estimates
Analyst Forecast
Target
Mean 16.4
Median 15.0
High 32.0
Low 12.0
Std. Dev 6.17
Total 7
Source: Thompson One
Analyst Comparison
# of
Brokers
Strong Buy 2
Buy 5
Hold 2
Underperform 0
Sell 0
Total 9
Source: Thompson One
Source: Team Estimates
Apr - 17
Target
Price:
$ 13.86

2. Fordham Securities April, 2016
2
Investment Thesis
Increasing revenue from low oil price
Hertz generates a large portion of its businesses from airport traffic due to extensive on-
airport facilities. 29% and 10% of company’s revenues come from U.S. on-airport
business for leisure and commercial purposes, respectively. Before the Dollar Thrifty
acquisition, Hertz had a 25% market share in the U.S. airport market, behind
Enterprise and Avis Budget Group, with a 34% and 26% market share respectively.
After the acquisition, Hertz became the largest car rental business with the the highest
coverage at major U.S. airports and a market share at 37%3
.
Lower Jet Fuel price has created a positive environment for the Airlines Industry. After
reaching its peak at $3.3 per gallon in 2011, Jet Fuel price has been gradually
decreasing over the past few years, and currently sits at $1.1 per gallon4
. Lower Jet Fuel
price allows airline companies to offer more affordable air transportation to customers.
The Passenger Load factor, which measures capacity utilization of U.S Airlines
Company, implies a potential increase in seat fillings from roughly 81% in 2014 to
83.6% in 2017. There is a high degree of positive correlation between the revenues of
Hertz’s and those of the Airlines Industry, as identified by a 0.9 correlation. Estimated
growth rate of the Airlines Industry’s sales over the next three years will be around 5%,
and we expect Hertz’s revenues to grow at a CAGR of 2.5% in the next 5 years.
Jet Fuel cost consists 31.5% of operating costs of the Airlines Industry. Lower Jet Fuel
price will result in margin expansion and create competitive price environment in the
industry. Airline ticket prices have been gradually decreasing since 2015 and we expect
prices to stay at the same level in 2016.
The promising spin off of Hertz’s equipment rental business (HERC)
Realizing the growth potential of the equipment rental business, Hertz’s management
board decided to spin off the business in order to create a stronger growth profile and a
more competitive position for each business. The company also announced the intention
to maintain a target net leverage ratio of 3.5x to 4.0x5
. Hertz’s equipment rental
business revenue has an average growth rate of 12% over the last three years. The
business is also diversifying its revenue into oil and gas exploration and extraction.
Recent OPEC meetings gave no decision on restricting the amount of oil production;as
a result, we expect a 5% sales growth for Hertz’s equipment rental business in 2016.
Using the results from our DCF model, we create a spin off model splitting the
company into its car rental and equipment rental businesses. We estimate an
EV/EBITDA multiple of 8.0x for the car rental business and 10.0x for the equipment
rental business based on historical comparables. Using 2016 EBITDA multiple method
with a net corporate debt 3.5x for car rental business and 4.0x for equipment rental
business, we value Hertz’s car rental business at $13.09 per share and equipment rental
business at $3.43 per share. Details of the model can be found in the appendix.
3
Data taken from Autorentalnews research and statistic
4
IndexMundi and FactSet
5
Net leverage ratio is defined as Net Corporate Debt / Corporate EBITDA. Company guidance: http://ir.hertz.com/2015-07-16-Hertz-Completes-Financial-
Restatement-Provides-2015-Business-Outlook
Jet Fuel Cost
Source: IndexMundi
Airlines EPS Growth YoY
Source: FactSet, Team estimates
US Airlines Load Factor and
Passenger yield
Source: FactSet, Team Estimate
U.S Airport Market Share
Source: Company data, Auto Rental
Industry

3. Fordham Securities April, 2016
3
Valuation
We collect data from SEC filings, press release, and investment notes. Based on recent guidance on April 11th
,
Corporate Adjusted EBITDA is roughly $1.6-$1.7B, EPS is roughly $0.95-$1.10 with effective tax rate of
37%6
; these figures are in line with our estimates. We expects U.S. car rental revenue to stay flat with US Car
Rental on Airport growing at 2.5% and Hertz equipment rental growing at 5% in 2016. We value the company
using a DCF model together with comparables multiple. The mean EV/EBITDA multiple for the peer group of
the company was 6.8x while the median EV/EBITDA multiple was 7x. On this basis, we assign Hertz an
EV/EBITDA multiple of 7x, which translates to a target share price of $13.86.
1. WACC7
: Our WACC calculation of 8.6% was calculated with the following inputs.
Cost of Equity: 14.9% Cost of Debt: 4.5%
Risk Free Rate: 1.7% (10 year yield) Tax Rate: 37%
Expected Market Return:7.00% Post Tax Cost of Debt: 2.8%
Beta: 2.5
WACC: 8.6%
2. Our DCF with perpetuity growth method analysis derives a price target of $9.75. We use a growth rate of
2% to determine this price target.
6
http://ir.hertz.com/2016-04-11-Hertz-Global-Holdings-Inc-Provides-Business-Update
7
Not including fleet debt and cost of fleet debt
Discounted Cash Flow Analysis for HERTZ
Dollars in millions, except per share
Historical Year Ending December 28, Projected Year Ending December 28,
2013 2014 2015 2016 2017 2018 2019 2020
Sales $10,775.0 $11,046.0 $10,535.0 $10,679.3 $10,977.5 $11,274.0 $11,579.7 $11,895.0
EBITDA 2,216.0 1,335.0 1,415.0 1,635.0 1,744.9 1,865.5 1,939.0 2,015.4
Less: Depreciation (188.0) (207.0) (196.0) (198.2) (193.2) (198.4) (203.8) (209.4)
Less: Amortization (151.0) (159.0) (156.0) (153.0) (95.0) (76.0) (70.0) (65.0)
EBIT 1,877.0 969.0 1,063.0 1,283.8 1,456.7 1,591.1 1,665.2 1,741.0
Less: Taxes @ 40.0% (750.8) (387.6) (425.2) (513.5) (582.7) (636.4) (666.1) (696.4)
Tax-effected EBIT 1,126.2 581.4 637.8 770.3 874.0 954.7 999.1 1,044.6
Plus: Depreciation 2,912.4 2,956.4 3,008.7 3,062.0 3,116.3
Plus: Amortization 153.0 95.0 76.0 70.0 65.0
Less: Capital expenditures (3,234.2) (3,295.0) (3,353.6) (3,413.4) (3,474.3)
Less: Additions to definite life intangibles 0.0 0.0 0.0 0.0 0.0
+ / - Changes in working capital (48.7) (26.6) (42.0) (23.3) (24.0)
+ / - Changes in other assets and liabilities 0.0 0.0 0.0 0.0 0.0
Unlevered Free Cash Flow $552.8 $603.9 $643.7 $694.4 $727.6
Unlevered Free Cash Flow Growth Rate 9.2% 6.6% 7.9% 4.8%
EBITDA Multiple Method
Weighted average cost of capital: 8.6%
Net present value of free cash flow (b) $2,506.0
Exit multiple 7.0x
Terminal value $14,107.8
Present value of the terminal value (c) 9,348.5
Enterprise Value $11,854.5
LESS: Net Debt (d) (e) (5,535.0)
Equity Value $6,319.5
Diluted shares: 456.000
Equity Value Per Share (e) $13.86
Corporate
Debt 6057.0
Cash 522.0
Minority
Interest 0.0
Preferred 0.0
5535.0
Net
Debt

4. Fordham Securities April, 2016
4
Investment Risks
Accounting standard risk: Recent accouting restatement and filling delays put a big
question on Hertz’s accounting standard. In August 2015, the company withdrew its
financial guidance and announced that it needed to review fiscal results from 2011 to
2013. In November of the same year, the company announced it generated $87 million
less in revenues than previously thought and would restate three years’ worth of
earnings8
.
Price pressure risk: Hertz expects US Car Rental revenues per available car day to
decline between 2.5 to 3.5 percent versus the same period last year due to pricing
pressure. Large fleet size give Hertz a better advantage in scale but lower flexibility when
cyclical seasonal intensify.
Car-Sharing Rentals Grow (Zipcar): Car sharing, a new model for people to rent cars
more conveniently, has been expanding its footprint. Roughly 18 percent of Americans
have used a car-sharing service. Substitute services including Uber and Lyft also pose a
high threat to the car-rental business.
Residual risk: The percentage of “program cars” that manufacturers agreed to repurchase
at a specified price or guarantee a setdepreciation rate has decreased from 48% to 30% in
Hertz car rental fleet. Additionally, the decline in the value of the non-program cars
causes severe residual risk for the company. Compared to Avis’s 37% program cars,
Hertz faces bigger challenges.
Fuel price fluctuation: Crude oil price is down from $100 in 2014 to the present price at
$40 (Apr 6th
2016), which allows Hertz to greatly reduce its fuel expense. However,
major oil exporting countries are giving uncertainty signal whether they are going to
further restrict oil production.
8
http://www.businessinsider.com/hertz-earnings-delayed-may-12-2015-5

5. Fordham Securities April, 2016
5
Appendix
Appendix 1: Income Statement and Free Cash Flow Buildup
Appendix 2: Spin off Model
Appendix 3: Sensitivity Analysis
Appendix 4: Deal Comps
Appendix 5: Car Rental Survey Results
Appendix 6: Other Information

6. Fordham Securities April, 2016
6
Appendix 1: Income Statement and DCF Model
Income
Statement
Fiscal
Years
Ending
December
31,
($
in
millions) 2013 2014 2015 2016 2017 2018 2019 2020
Revenues:
Worldwide
car
rental 8,709.00
8,907.00
8,434.00
8,487.01
8,689.73
8,886.32
9,087.51
9,293.44
Worldwide
equipment
rental 1,539.00
1,571.00
1,518.00
1,593.90
1,673.60
1,757.27
1,845.14
1,937.40
All
other
operations 527.00
568.00
583.00
598.40
614.20
630.42
647.07
664.16
Total
revenues 10,775.00
11,046.00
10,535.00
10,679.31
10,977.53
11,274.01
11,579.72
11,894.99
Expenses:
Direct
operating 5,498.00
6,139.00
5,700.00
5,732.41
5,813.59
5,903.09
6,060.52
6,224.06
Depreciation
of
revenue
earning
equipment,
net 2,533.00
3,034.00
2,762.00
2,714.22
2,763.19
2,810.26
2,858.17
2,906.92
Depreciation
of
PPE
188.00
207.00
196.00
198.21
193.20
198.42
203.80
209.35
Amortization 151.00
159.00
156.00
153.00
95.00
76.00
70.00
65.00
Selling,
general
and
administrative 867.00
904.00
1,010.00
948.91
944.07
969.56
995.86
1,022.97
Interest
expense,
net 707.00
648.00
622.00
635.21
635.21
635.21
635.21
635.21
Interest
income -­‐
-­‐
-­‐
(2.00)
(2.73)
(3.55)
(4.48)
(5.52)
Other
(income)
expense,
net 102.00
(15.00)
(131.00)
(80.00)
(80.00)
(80.00)
(80.00)
(80.00)
Total
expenses 9,707.00
10,710.00
9,963.00
9,948.75
10,073.32
10,234.58
10,465.27
10,703.64
Income
before
income
taxes 1,068.00
336.00
572.00
730.56
904.21
1,039.43
1,114.45
1,191.35
Provision
for
taxes
on
income (533.50)
(238.50)
(68.00)
(270.31) (361.68) (415.77) (445.78) (476.54)
Net
income 534.50
97.50
504.00
460.25
542.52
623.66
668.67
714.81
Less:
Net
income
attributable
to
noncontrolling
interest -­‐
-­‐
-­‐
Net
income
attributable
to
The
Hertz
Corporation
and
Subsidiaries'
common
stockholder 534.50
97.50
504.00
460.25
542.52
623.66
668.67
714.81
Diluted
Share
Outstandings 463.90
454.00
456.00
439.37
441.37
443.37
445.37
447.37
Total
Share
Outstandings 445.80
459.00
423.00
425.00
427.00
429.00
431.00
433.00
EPS
(diluted) 1.15
0.21
1.11
1.05
1.23
1.41
1.50
1.60
Discounted Cash Flow Analysis for HERTZ
Dollars in millions, except per share
Historical Year Ending December 28, Projected Year Ending December 28,
2013 2014 2015 2016 2017 2018 2019 2020
Sales $10,775.0 $11,046.0 $10,535.0 $10,679.3 $10,977.5 $11,274.0 $11,579.7 $11,895.0
EBITDA 2,216.0 1,335.0 1,415.0 1,635.0 1,744.9 1,865.5 1,939.0 2,015.4
Less: Depreciation (188.0) (207.0) (196.0) (198.2) (193.2) (198.4) (203.8) (209.4)
Less: Amortization (151.0) (159.0) (156.0) (153.0) (95.0) (76.0) (70.0) (65.0)
EBIT 1,877.0 969.0 1,063.0 1,283.8 1,456.7 1,591.1 1,665.2 1,741.0
Less: Taxes @ 40.0% (750.8) (387.6) (425.2) (513.5) (582.7) (636.4) (666.1) (696.4)
Tax-effected EBIT 1,126.2 581.4 637.8 770.3 874.0 954.7 999.1 1,044.6
Plus: Depreciation 2,912.4 2,956.4 3,008.7 3,062.0 3,116.3
Plus: Amortization 153.0 95.0 76.0 70.0 65.0
Less: Capital expenditures (3,234.2) (3,295.0) (3,353.6) (3,413.4) (3,474.3)
Less: Additions to definite life intangibles 0.0 0.0 0.0 0.0 0.0
+ / - Changes in working capital (48.7) (26.6) (42.0) (23.3) (24.0)
+ / - Changes in other assets and liabilities 0.0 0.0 0.0 0.0 0.0
Unlevered Free Cash Flow $552.8 $603.9 $643.7 $694.4 $727.6
Unlevered Free Cash Flow Growth Rate 9.2% 6.6% 7.9% 4.8%
Perpetuity Growth Method EBITDA Multiple Method
Weighted average cost of capital: 8.6% Weighted average cost of capital: 8.6%
Net present value of free cash flow (b) $2,506.0 Net present value of free cash flow (b) $2,506.0
Growth rate of FCF after 2020 2.0% Exit multiple 7.0x
Terminal value $11,281.9 Terminal value $14,107.8
Present value of the terminal value (c) 7,475.9 Present value of the terminal value (c) 9,348.5
Enterprise Value $9,981.9 Enterprise Value $11,854.5
LESS: Net Debt (d) (e) (5,535.0) LESS: Net Debt (d) (e) (5,535.0)
Equity Value $4,446.9 Equity Value $6,319.5
Diluted shares: 456.000 Diluted shares: 456.000
Equity Value Per Share (f) $9.75 Equity Value Per Share (e) $13.86

7. Fordham Securities April, 2016
7
Appendix 2: Spin Off Model
Car
Rental
2013 2014 2015 2016 2017 2018 2019 2020
Revenue 8,718
8,907
8,434
8,487 8,690 8,886 9,088 9,293
US
6,331
6,471
6,286
6,275
6,411
6,539
6,670
6,803
International 2,387
2,436
2,148
2,212
2,279
2,347
2,418
2,490
Direct
Expenses 4,938
5,412
5,010
4,907 5,018 5,125 5,234 5,346
US
3,531
3,921
3,759
International 1,407
1,491
1,251
SG&A 795
714
688
679 695 711 727 743
Depreciation,
net 1,809
2,250
2,100
1,941 1,988 2,066 2,114 2,163
US
1,281
1,758
1,572
1,326 1,355 1,414 1,442 1,471
International 528
492
528
615 634 653 672 692
Non
fleet 127
154
170
160
165
156
161
165
Amortization 124
130
140
125 78 62 57 53
EBITDA 1,427
815
946
1,245
1,231
1,202
1,230
1,259
Operating
Income 1,176 531 636 960 988 984 1,012 1,041
Capex,
net
US
Car
Rental 1,695
1,458
1,593
1,349 1,378 1,439 1,467 1,497
Capex,
net
International 351
593
443
456 470 484 499 514
Capex,
net
non
equipment
earning
rev 200
228
89
209
214
197
201
206
Free
Cash
Flow
Operating
Income 1,176 531 636 960 988 984 1,012 1,041
Taxes 40% 470 212 254 384 395 394 405 416
NOPAT 706
319
382
576
593
590
607
624
Plus
D&A 1,809
2,250
2,100
1,941
1,988
2,066
2,114
2,163
Plus
Share
Based
Comp 124
130
140
125
78
62
57
53
Minus
Capex (2,246)
(2,279)
(2,125)
(2,015)
(2,063)
(2,119)
(2,167)
(2,216)
Free
Cash
Flow
From
Car
Rental 393
420
497
627
596
599
611
625
Other
Operations 2013 2014 2015 2016 2017 2018 2019 2020
Revenue 527
568
583
630 680 734 793 857
Direct
Expenses 23
23
24
26 28 30 33 35
SG&A 43
45
41
44 48 52 56 60
Depreciation,
net 425
455
463
508 548 599 648 700
Dep
Non
fleet 8
9
10
10
10
10
10
10
Amortization 7
8
10
8 5 4 4 3
EBITDA 51
62
75
70
71
67
71
74
Operating
Income 36 45 55 52 56 54 57 61
Capex,
net 453
596
554
600 648 700 748 799
Capex,
net
non
equipment
earning
rev 3
5
2
13 13 12 12 13
Free
Cash
Flow
Operating
Income 36 45 55 52 56 54 57 61
Taxes 40% 14 18 22 21 22 21 23 24
NOPAT 22
27
33
31
34
32
34
37
Plus
Depreciation
net 425
455
463
508
548
599
648
700
Plus
Amortization 7
8
10
8
5
4
4
3
Minus
Capex (456)
(601)
(556)
(613)
(661)
(712)
(760)
(812)
Free
Cash
Flow
From
Other
Ops 5
(102)
(40)
(56)
(64)
(67)
(65)
(62)

8. Fordham Securities April, 2016
8
Appendix 3 : Sensitivity Analysis
Equipment
Rental 2013 2014 2015 2016 2017 2018 2019 2020
Revenue 1,539
1,571
1,518
1,594
1,674
1,757
1,845
1,937
Direct
Expenses 776
854
850
893 929 966 1,015 1,065
SG&A 113
121
150
158 164 170 177 184
Depreciation,
net 299
329
329
334 338 373 383 392
Dep
non
fleet 22
26
29
27
28
27
27
28
Amortization 21
22
25
21 13 11 10 9
EBITDA 393
315
243
259
284
286
308
333
Operating
Income 351 267 189 210 243 248 271 296
Capex,
net 534
433
445
451 457 498 504 510
Capex,
net
non
equipment
earning
rev 19 28 69 36 37 34 34 35
Free
Cash
Flow
Operating
Income 351 267 189 210 243 248 271 296
Taxes 35% 123 93 66 74 85 87 95 104
NOPAT 228
174
123
137
158
161
176
192
Plus
Depreciation 299
329
329
334
338
373
383
392
Plus
Amortization 21
22
25
21
13
11
10
9
Minus
Capex (553)
(461)
(514)
(487)
(494)
(531)
(538)
(545)
Free
Cash
Flow
From
Equipment
Rental (5)
64
(37)
4
15
14
30
49
EBITDA
2016 1,315.00$
Exit
Multiple 8.00
Enteprise
Value 10,519.98$
Net
Debt 4,601.35$
Equity
Value 5,918.63$
Share
Value 13.09$
Car
Rental
&
Other
Operation
EBITDA
2016 258.58$
Exit
Multiple 10.00
Enteprise
Value 2,585.84$
Net
Debt 1,034.34$
Equity
Value 1,551.51$
Share
Value 3.43$
Equipment
Rental
Equity Value Per Share (Perpetuity Growth Method)
Weighted average cost of capital
$9.75 7.00% 7.25% 7.50% 7.75% 8.00% 8.25% 8.50% 8.75% 9.00%
1.5% $14.60 $13.41 $12.33 $11.33 $10.40 $9.55 $8.76 $8.02 $7.33
1.7% $15.43 $14.17 $13.01 $11.95 $10.98 $10.07 $9.24 $8.46 $7.74
1.9% $16.33 $14.98 $13.75 $12.62 $11.59 $10.63 $9.75 $8.94 $8.18
2.1% $17.31 $15.86 $14.54 $13.34 $12.24 $11.23 $10.30 $9.44 $8.64
2.3% $18.37 $16.80 $15.39 $14.11 $12.94 $11.86 $10.88 $9.97 $9.13
Terminal 2.5% $19.52 $17.83 $16.31 $14.93 $13.68 $12.54 $11.50 $10.54 $9.65
growth 2.7% $20.77 $18.94 $17.30 $15.83 $14.49 $13.27 $12.16 $11.14 $10.20
rate 2.9% $22.16 $20.16 $18.39 $16.79 $15.36 $14.05 $12.87 $11.78 $10.79
3.1% $23.68 $21.50 $19.57 $17.84 $16.30 $14.90 $13.63 $12.47 $11.42
3.3% $25.37 $22.97 $20.86 $18.99 $17.31 $15.81 $14.45 $13.22 $12.09
3.5% $27.25 $24.60 $22.28 $20.24 $18.42 $16.80 $15.34 $14.01 $12.81
3.7% $29.35 $26.41 $23.85 $21.61 $19.63 $17.87 $16.29 $14.87 $13.59
3.9% $31.73 $28.44 $25.60 $23.13 $20.97 $19.05 $17.34 $15.80 $14.42
4.1% $34.44 $30.72 $27.55 $24.82 $22.43 $20.33 $18.48 $16.82 $15.33
Equity Value Per Share (EBITDA Exit Multiple Method)
Weighted average cost of capital
$13.86 7.00% 7.25% 7.50% 7.75% 8.00% 8.25% 8.50% 8.75% 9.00%
6.0x $12.51 $12.25 $12.00 $11.74 $11.49 $11.25 $11.01 $10.77 $10.53
6.5x $14.09 $13.81 $13.53 $13.26 $13.00 $12.73 $12.47 $12.22 $11.97
7.0x $15.66 $15.37 $15.07 $14.79 $14.50 $14.22 $13.94 $13.67 $13.40
7.5x $17.24 $16.92 $16.61 $16.31 $16.01 $15.71 $15.41 $15.12 $14.84
8.0x $18.81 $18.48 $18.15 $17.83 $17.51 $17.19 $16.88 $16.58 $16.27
EBITDA 8.5x $20.39 $20.04 $19.69 $19.35 $19.01 $18.68 $18.35 $18.03 $17.71
exit 9.0x $21.96 $21.60 $21.23 $20.87 $20.52 $20.17 $19.82 $19.48 $19.15
multiple 9.5x $23.54 $23.15 $22.77 $22.39 $22.02 $21.65 $21.29 $20.94 $20.58
10.0x $25.12 $24.71 $24.31 $23.91 $23.53 $23.14 $22.76 $22.39 $22.02
10.5x $26.69 $26.27 $25.85 $25.44 $25.03 $24.63 $24.23 $23.84 $23.46
11.0x $28.27 $27.82 $27.39 $26.96 $26.53 $26.11 $25.70 $25.29 $24.89
11.5x $29.84 $29.38 $28.93 $28.48 $28.04 $27.60 $27.17 $26.75 $26.33
12.0x $31.42 $30.94 $30.47 $30.00 $29.54 $29.09 $28.64 $28.20 $27.76
12.5x $32.99 $32.50 $32.01 $31.52 $31.05 $30.57 $30.11 $29.65 $29.20

9. Fordham Securities April, 2016
9
Appendix 4: Deal Comps for Car Rental Industry
Current Price 25.00
1 Day Premium Acquirer Date Estimate Price Over(Under)
Valued
58.72% United Rentals Inc 12/16/2011 45.00 80.00%
8.02% Hertz Global Holdings Inc 8/26/2012 12.88 -48.47%
59.90% Avis Budget Group Inc 6/14/2011 17.92 -28.34%
48.67% Avis Budget Group Inc 1/2/2013 88.84 255.37%
NA United Rentals 6/16/1998 19.61 -21.56%
32.15% Caterpillar Inc 11/15/2010 52.22 108.88%
0.41 39.41 57.65%
Source: Factset, team estimate
Industry
M&A
EV/Sales EV/EBITDA EV/IBD EV/NI P/E 1
Day
Premium Acquirer
Date
RSC
Holding
Inc 3.30x 9.30x 2.10x (179.60x) (25.42x) 58.72% United
Rentals
Inc 12/16/2011
Dollar
Thrifty
Automotive
Group
Inc 2.40x 5.50x 2.40x 19.60x 12.87x 8.02% Hertz
Global
Holdings
Inc 8/26/2012
Avis
Europe
Plc 0.70x 8.80x 1.50x 43.60x 24.48x 59.90% Avis
Budget
Group
Inc 6/14/2011
Zipcar
Inc 2.10x 11.90x 4.60x 39.50x 33.11x 48.67% Avis
Budget
Group
Inc 1/2/2013
US
Rentals
2.60x 5.90x 3.20x 15.00x 19.43x NA United
Rentals 6/16/1998
Bucyrus
International
Inc
2.80x 16.00x 5.70x 32.00x 27.96x 32.15% Caterpillar
Inc 11/15/2010
Average 2.32x 9.57x 3.25x (4.98x) 15.40x 0.41
Deal
Comps
for
Hertz
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
US Citizen Monthly Traveling

10. Fordham Securities April, 2016
10
Appendix 5: Car Rental Survey Results
The results of our survey undoubtedly support our ‘buy’ recommendation. Consumers have certain expectations
when participating in a rental transaction. They are not overwhelmingly emotional with regards to any brand, but
gravitate towards what they know and trust.
Three major brands dominate the market, according to our survey, as consumers are weary of lesser popular
companies. Only 13% did business with companies other than Hertz, Avis or Enterprise. In addition, Hertz has
received an impressive 40% of the market share. This is promising.
Purpose
Hertz has affiliated its company most commonly with travel. 68% of those surveyed have rented a car from Hertz
via an Airport facility. Hertz intends on growing their presence at airports, which given this statistic, will improve
their business.
Of those surveyed who have used Hertz, most have done so for Leisurely purposes. They are vacationing and are
in need of private transportation. This supports Hertz’s objective of obtaining business from vacationers. Coupled
with their intentions of increasing their airport presence, we are very optimistic.
Hertz, 38.46%
Avis, 27.69%
Enterprise,
26.15%
Other, 13.85%
0.00%
50.00%
100.00%
Business Leisure Local Commute Other
Rental Care Purpose

11. Fordham Securities April, 2016
11
Customer Satisfaction
Our survey indicated that most consumers are not loyal to a particular brand – they want a reliable and safe
service that does not interrupt precious vacation time. Consumers do not react very emotionally (unless negative)
in favor of a certain brand.
It is no surprise that only 12% of those surveyed consider Hertz’s service to be ‘Excellent’. It is difficult to
quantify a service as excellent when it is as unexciting as renting a car. The heart of the matter lies in those who
are satisfied. According to those surveyed 67% were satisfied – a notable figure when considering how unpleasant
overall travel experiences can be. We are impressed by their ability to consistently deliver a familiar product to
satisfied consumers.
Excellent
12%
Satisfactory
67%
Poor
4%
Other
17%
Hertz Customer Satisfaction

12. Fordham Securities April, 2016
12
Appendix 6: Other Information & Data
Balance
Sheet
Fiscal
Years
Ending
December
31,
($
in
millions) 2013 2014 2015 2016 2017 2018 2019 2020
Assets
Cash
and
cash
equivalents 411.00
490.00
486.00
763.17
1,069.97
1,417.12
1,815.55
2,247.76
Restricted
cash
and
cash
equivalents 861.00
571.00
349.00
349.00
349.00
349.00
349.00
349.00
Receivables,
net
of
allowance
of
$25,
$62
and
$67
respectively 1,397.00
1,597.00
2,074.00
2,102.41
2,161.12
2,219.49
2,279.67
2,341.74
Inventories,
at
lower
of
cost
or
market 87.00
67.00
51.00
73.10
75.06
76.46
78.61
80.82
Prepaid
expenses
and
other
assets 715.00
917.00
846.00
857.59
881.54
905.35
929.89
955.21
Revenue
earning
equipment,
at
cost:
Cars
and
Equipment 17,991.00
18,235.00
16,967.00
Less
accumulated
depreciation (3,800.00)
(4,582.00)
(3,839.00)
Total
revenue
earning
equipment 14,191.00
13,653.00
13,128.00
13,402.84
13,682.64
13,967.20
14,256.62
14,550.97
Property
and
equipment,
at
cost:
Land,
buildings
and
leasehold
improvements 2,249.00
2,416.00
2,422.00
Less
accumulated
depreciation (964.00)
(1,094.00)
(1,174.00)
Total
property
and
equipment 1,285.00
1,322.00
1,248.00
1,294.93
1,353.70
1,414.06
1,476.06
1,539.75
Other
intangible
assets 4,827.00
4,870.00
4,804.00
4,651.00
4,556.00
4,480.00
4,410.00
4,345.00
Amortization
of
Inangibles (703.00)
(861.00)
(982.00)
(982.00)
(982.00)
(982.00)
(982.00)
(982.00)
Goodwill 1,352.00
1,359.00
1,354.00
1,354.00
1,354.00
1,354.00
1,354.00
1,354.00
Total
assets 24,423.00
23,985.00
23,358.00
23,866.04
24,501.03
25,200.69
25,967.40
26,782.25
LIABILITIES
AND
EQUITY
Accounts
payable 1,022.00
1,008.00
875.00
880.43
904.02
920.92
946.78
973.45
Accrued
liabilities 1,171.00
1,148.00
1,106.00
1,151.40
1,182.25
1,204.35
1,238.17
1,273.05
Accrued
taxes 146.00
134.00
172.00
134.53
138.13
140.72
144.67
148.74
Debt 16,309.00
15,993.00
15,907.00
15,907.00
15,907.00
15,907.00
15,907.00
15,907.00
Public
liability
and
property
damage 351.00
385.00
402.00
402.00
402.00
402.00
402.00
402.00
Deferred
taxes
on
income 2,857.00
2,853.00
2,877.00
2,877.00
2,877.00
2,877.00
2,877.00
2,877.00
Total
liabilities 21,856.00
21,521.00
21,339.00
21,352.37
21,410.41
21,451.99
21,515.62
21,581.24
Commitments
and
contingencies -­‐
-­‐
-­‐
-­‐
-­‐
-­‐
-­‐
Equity:
The
Hertz
Corporation
and
Subsidiaries
stockholder's
equity
Common
Stock,
$0.01
par
value,
2,000.0
million
shares
authorized,
449.7
million
and
421.5
million
shares
issued
and
445.8
million
and
421.5
million
outstanding4.00
5.00
4.00
-­‐
-­‐
-­‐
-­‐
-­‐
Additional
paid-­‐in
capital 3,226.00
3,325.00
3,343.00
3,803.25
4,345.78
4,969.44
5,638.10
6,352.92
Accumulated
deficit (582.00)
(664.00)
(391.00)
(527.50)
(459.25)
(493.38)
(476.31)
(484.84)
Accumulated
other
comprehensive
loss 6.00
(115.00)
(245.00)
(245.00)
(245.00)
(245.00)
(245.00)
(245.00)
2,654.00
2,551.00
2,711.00
3,030.75
3,641.53
4,231.06
4,916.79
5,623.07
Treasury
Stock,
at
cost,
3.9
million
shares
and
0
shares (87.00)
(87.00)
(692.00)
Total
The
Hertz
Corporation
and
Subsidiaries
stockholder's
equity 2,567.00
2,464.00
2,019.00
2,513.67
3,090.62
3,748.70
4,451.78
5,201.02
Total
liabilities
and
equity 24,423.00
23,985.00
23,358.00
23,866.04
24,501.03
25,200.69
25,967.40
26,782.25

13. Fordham Securities April, 2016
13
CONSOLIDATED
STATEMENTS
OF
CASH
FLOWS
Fiscal
Years
Ending
December
31,
($
in
millions) 2013 2014 2015 2016 2017 2018 2019 2020
Operating
Activities
Net
income 302.00
(82.00)
273.00
460.25
542.52
623.66
668.67
714.81
Adjustments
to
reconcile
net
income
to
net
cash
provided
by
operating
activities:
Depreciation
of
revenue
earning
equipment 2,452.00
2,954.00
2,690.00
2,714.22
2,763.19
2,810.26
2,858.17
2,906.92
Depreciation
of
PPE
188.00
207.00
196.00
198.21
193.20
198.42
203.80
209.35
Amortization 151.00
159.00
156.00
153.00
95.00
76.00
70.00
65.00
Amortization
and
write-­‐off
of
deferred
financing
costs 56.00
57.00
60.00
-­‐
-­‐
-­‐
-­‐
-­‐
Stock-­‐based
compensation
charges 35.00
11.00
17.00
12.00
12.00
12.00
12.00
12.00
Deferred
taxes
on
income 227.00
6.00
3.00
-­‐
-­‐
-­‐
-­‐
-­‐
Other 156.00
80.00
(69.00)
-­‐
-­‐
-­‐
-­‐
-­‐
Income
statement
adjustments 3,567.00
3,392.00
3,326.00
3,537.68
3,605.91
3,720.35
3,812.64
3,908.08
Receivables (53.00)
(90.00)
(58.00)
(28.41)
(58.71)
(58.37)
(60.18)
(62.07)
Inventories,
prepaid
expenses
and
other
assets (29.00)
(64.00)
(22.00)
(33.69)
(25.91)
(25.21)
(26.70)
(27.53)
Accounts
payable 54.00
23.00
(16.00)
5.43
23.59
16.90
25.86
26.67
Accrued
liabilities 29.00
139.00
43.00
45.40
30.85
22.10
33.82
34.88
Accrued
taxes 26.00
(4.00)
23.00
(37.47)
3.60
2.58
3.95
4.07
Public
liability
and
property
damage (1.00)
56.00
36.00
-­‐
-­‐
-­‐
-­‐
-­‐
Cash
flow
from
operating
activities 3,593.00
3,452.00
3,332.00
3,488.95
3,579.34
3,678.34
3,789.39
3,884.10
Investing
Activities
Restricted
cash
and
cash
equivalents (315.00)
283.00
215.00
-­‐
-­‐
-­‐
-­‐
-­‐
Revenue
earning
equipment
(10,289.00)
(11,289.00)
(12,658.00)
(11,106.48)
(11,306.85)
(11,499.49)
(11,695.52)
(11,894.99)
Property
and
equipment
(327.00)
(374.00)
(327.00)
(341.74)
(351.28)
(360.77)
(370.55)
(380.64)
Other
investing
activities 7,081.00
8,197.00
10,005.00
8,214.03
8,363.17
8,506.65
8,652.68
8,801.32
Cash
flow
from
investing
activities (3,850.00)
(3,183.00)
(2,765.00)
(3,234.19)
(3,294.96)
(3,353.61)
(3,413.39)
(3,474.31)
Net
Cash
available: (257.00)
269.00
567.00
254.75
284.38
324.73
376.00
409.79
Borrowing
Needed 257.00
-­‐
-­‐
-­‐
-­‐
-­‐
-­‐
-­‐
Financing
Activities
Issuance/Repayment of Revolver (514.00)
683.00
(290.00)
-­‐
-­‐
-­‐
-­‐
-­‐
Issuance
of
Debt,
Net 2,275.00
400.00
1,676.00
1,939.00 5,597.00 1,226.00 3,712.00 1,774.00
Repayment
of
Longterm
Debt (1,045.00)
(1,183.00)
(1,293.00)
(1,939.00) (5,597.00) (1,226.00) (3,712.00) (1,774.00)
Repurchase
of
Equity (555.00)
-­‐
(605.00)
- - - - -
Dividends - - - - -
Options
Proceeds 22.42 22.42 22.42 22.42 22.42
Others (34.00)
(59.00)
(28.00)
Cash
flow
from
financing
activities 127.00
(159.00)
(540.00)
22.42
22.42
22.42
22.42
22.42
Change
in
cash (130.00)
110.00
27.00
277.17
306.80
347.15
398.42
432.21
Beginning
cash
balance 835.00
1,112.17
1,418.97
1,766.12
2,164.55
Ending
cash
balance 1,112.17
1,418.97
1,766.12
2,164.55
2,596.76
Cost Current
Value Weight
Ke 14.92% 4,180
0.39
5.84%
10
Year
US
Bond
Yield Rfr 1.72%
Expected
Market
Return Rm 7.00% 5.28%
Calculated Beta 2.50
RM-­‐RF 5.28%
B(RM-­‐RF) 13.2%
Kd 4.50% 6,500.00 0.61
2.74%
WACC 8.6%
Tax
rate 37%
CAPM

14. Fordham Securities April, 2016
14
Disclosures:
Ownership and material conflicts of interest:
The author(s), or a member of their household, of this report [holds/does not hold] a financial interest in the securities of this company.
The author(s), or a member of their household, of this report [knows/does not know] of the existence of any conflicts of interest that might bias the content or
publication of this report. [The conflict of interest is…]
Receipt of compensation:
Compensation of the author(s) of this report is NIL
Market making:
The author(s) does [not] act as a market maker in the subject company’s securities.
Ratings guide:
Banks rate companies as either a BUY, HOLD or SELL. A BUY rating is given when the security is expected to deliver absolute returns of 15% or greater
over the next twelve month period, and recommends that investors take a position above the security’s weight in the S&P 500, or any other relevant index.
A SELL rating is given when the security is expected to deliver negative returns over the next twelve months, while a HOLD rating implies flat returns over
the next twelve months.
Investment Research Challenge and Global Investment Research Challenge Acknowledgement:
Fordham Univestity Investment Research Challenge as part of is based on the Investment Research Challenge originally developed by Fordham University.
Disclaimer:
The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but
the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be
used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a
solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated with Fordham
University Challenge with regard to this company’s stock.