Herc Holdings Inc.

04/22/2025 | Press release | Distributed by Public on 04/22/2025 04:33

Quarterly Report for Quarter Ending March 31, 2025 (Form 10-Q)

Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-33139
HERC HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 20-3530539
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
27500 Riverview Center Blvd.
Bonita Springs, Florida 34134
(239) 301-1000
(Address, including Zip Code, and telephone number,
including area code, of registrant's principal executive offices)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of exchange on which registered
Common Stock, par value $0.01 per share
HRI
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Smaller reporting company
Accelerated filer Emerging growth company
Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of April 18, 2025, there were 28,497,491 shares of the registrant's common stock, $0.01 par value, outstanding.
Table of Contents
HERC HOLDINGS INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Cautionary Note Regarding Forward-Looking Statements
1
PART I. FINANCIAL INFORMATION
ITEM 1.
Financial Statements
2
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024
2
Condensed Consolidated Statements of Operations for the Three Months Ended
March 31, 2025 and 2024
3
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended
March 31, 2025 and 2024
4
Condensed Consolidated Statements of Changes in Equity for the Three Months Ended
March 31, 2025 and 2024
5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2025 and 2024
6
Notes to Condensed Consolidated Financial Statements
8
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
22
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
28
ITEM 4.
Controls and Procedures
28
PART II. OTHER INFORMATION
ITEM 1.
Legal Proceedings
29
ITEM 1A.
Risk Factors
29
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
29
ITEM 5.
Other Information
29
ITEM 6.
Exhibits
30
SIGNATURE
31
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HERC HOLDINGS INC. AND SUBSIDIARIES
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the period ended March 31, 2025 (this "Report") includes "forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act, as amended, and the Private Securities Litigation Reform Act of 1995. Forward looking statements are generally identified by the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "looks," and future or conditional verbs, such as "will," "should," "could" or "may," as well as variations of such words or similar expressions. All forward-looking statements are based upon our current expectations and various assumptions and apply only as of the date of this Report. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will be achieved. You should not place undue reliance on the forward-looking statements.
Factors that could cause actual results to differ materially from those projected include, but are not limited to, the following:
the cyclical nature of our industry and our dependence on the levels of capital investment and maintenance expenditures by our customers;
the competitiveness of our industry, including the potential downward pricing pressures or the inability to increase prices;
our dependence on relationships with key suppliers;
our heavy reliance on communication networks, centralized information technology systems and third party technology and services and our ability to maintain, upgrade or replace our information technology systems;
our ability to respond adequately to changes in technology and customer demands;
our ability to attract and retain key management, sales and trades talent;
our rental fleet is subject to residual value risk upon disposition;
the impact of climate change and the legal and regulatory responses to such change;
our ability to execute our strategy to grow through strategic transactions; and
our significant indebtedness.
There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking statements, including those set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 under Item 1A "Risk Factors," in Part II, Item 1A of this Report, and in our other filings with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. We undertake no obligation to update or revise forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.
1
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PART I-FINANCIAL INFORMATION
ITEM l. FINANCIAL STATEMENTS
HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
March 31,
2025
December 31,
2024
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 48 $ 83
Receivables, net of allowances of $19 and $22, respectively
554 589
Prepaid expenses 69 47
Other current assets 20 40
Assets held for sale 18 17
Total current assets 709 776
Rental equipment, net 4,085 4,225
Property and equipment, net 567 554
Right-of-use lease assets 869 852
Intangible assets, net 564 572
Goodwill 682 670
Other long-term assets 8 8
Assets held for sale 221 220
Total assets $ 7,705 $ 7,877
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt and financing obligations $ 22 $ 21
Current maturities of operating lease liabilities 39 39
Accounts payable 161 248
Accrued liabilities 237 239
Liabilities held for sale 15 15
Total current liabilities 474 562
Long-term debt, net 4,026 4,069
Financing obligations, net 99 101
Operating lease liabilities 862 842
Deferred tax liabilities 771 800
Other long-term liabilities 57 47
Liabilities held for sale 58 60
Total liabilities 6,347 6,481
Commitments and contingencies (Note 12)
Equity:
Preferred stock, $0.01 par value, 13.3 shares authorized, no shares issued and outstanding
- -
Common stock, $0.01 par value, 133.3 shares authorized, 33.4 and 33.3 shares issued and 28.5 and 28.4 shares outstanding
- -
Additional paid-in capital 1,832 1,832
Retained earnings 595 633
Accumulated other comprehensive loss (142) (142)
Treasury stock, at cost, 4.9 shares and 4.9 shares
(927) (927)
Total equity 1,358 1,396
Total liabilities and equity $ 7,705 $ 7,877
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In millions, except per share data)
Three Months Ended March 31,
2025 2024
Revenues:
Equipment rental $ 739 $ 719
Sales of rental equipment 105 69
Sales of new equipment, parts and supplies 11 9
Service and other revenue 6 7
Total revenues 861 804
Expenses:
Direct operating 327 307
Depreciation of rental equipment 172 160
Cost of sales of rental equipment 76 46
Cost of sales of new equipment, parts and supplies 8 6
Selling, general and administrative 118 112
Transaction expenses 74 3
Non-rental depreciation and amortization 33 29
Interest expense, net 62 61
Other expense (income), net (1) (1)
Total expenses 869 723
Income (loss) before income taxes (8) 81
Income tax provision (10) (16)
Net income (loss) $ (18) $ 65
Weighted average shares outstanding:
Basic 28.5 28.3
Diluted 28.5 28.4
Earnings (loss) per share:
Basic $ (0.63) $ 2.30
Diluted $ (0.63) $ 2.29
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
(In millions)
Three Months Ended March 31,
2025 2024
Net income (loss) $ (18) $ 65
Other comprehensive income (loss):
Foreign currency translation adjustments - (6)
Total comprehensive income $ (18) $ 59
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
(In millions)
Common Stock Additional
Paid-In Capital
Retained Earnings Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock Total
Equity
Shares Amount
Balance at December 31, 2024 28.4 $ - $ 1,832 $ 633 $ (142) $ (927) $ 1,396
Net loss - - - (18) - - (18)
Other comprehensive loss - - - - - - -
Stock-based compensation charges - - 6 - - - 6
Dividends declared, $0.70 per share
- - - (20) - - (20)
Net settlement on vesting of equity awards 0.1 - (7) - - - (7)
Employee stock purchase plan - - 1 - - - 1
Exercise of stock options - - - - - - -
Repurchase of common stock - - - - - - -
Balance at March 31, 2025 28.5 $ - $ 1,832 $ 595 $ (142) $ (927) $ 1,358
Common Stock Additional
Paid-In Capital
Retained Earnings Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock Total
Equity
Shares Amount
Balance at December 31, 2023 28.2 $ - $ 1,820 $ 498 $ (118) $ (927) $ 1,273
Net income - - - 65 - - 65
Other comprehensive loss - - - - (6) - (6)
Stock-based compensation charges - - 5 - - - 5
Dividends declared, $0.665 per share
- - - (19) - - (19)
Net settlement on vesting of equity awards 0.1 - (12) - - - (12)
Employee stock purchase plan - - 1 - - - 1
Exercise of stock options - - 1 - - - 1
Balance at March 31, 2024 28.3 $ - $ 1,815 $ 544 $ (124) $ (927) $ 1,308
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In millions)
Three Months Ended March 31,
2025 2024
Cash flows from operating activities:
Net income (loss) $ (18) $ 65
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of rental equipment 172 160
Depreciation of property and equipment 22 19
Amortization of intangible assets 11 10
Amortization of deferred debt and financing obligations costs 1 1
Stock-based compensation charges 6 5
Provision for receivables allowances 14 12
Deferred taxes (29) 9
Gain on sale of rental equipment (29) (23)
Other - 3
Changes in assets and liabilities:
Receivables 20 (7)
Other assets (20) (6)
Accounts payable (18) (2)
Accrued liabilities and other long-term liabilities 39 (6)
Net cash provided by operating activities 171 240
Cash flows from investing activities:
Rental equipment expenditures (187) (181)
Proceeds from disposal of rental equipment 94 61
Non-rental capital expenditures (33) (30)
Proceeds from disposal of property and equipment 4 2
Acquisitions, net of cash acquired (11) (148)
Net cash used in investing activities (133) (296)
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Unaudited
(In millions)
Three Months Ended March 31,
2025 2024
Cash flows from financing activities:
Proceeds from revolving lines of credit and securitization 520 385
Repayments on revolving lines of credit and securitization (561) (302)
Principal payments under finance lease and financing obligations (5) (5)
Dividends paid (21) (20)
Net settlement on vesting of equity awards (7) (12)
Proceeds from employee stock purchase plan 1 1
Proceeds from exercise of stock options - 1
Net cash provided by (used in) financing activities (73) 48
Effect of foreign exchange rate changes on cash and cash equivalents - -
Net change in cash and cash equivalents during the period (35) (8)
Cash and cash equivalents at beginning of period 83 71
Cash and cash equivalents at end of period $ 48 $ 63
Supplemental disclosure of cash flow information:
Cash paid for interest $ 66 $ 78
Cash paid for income taxes, net $ 2 $ 3
Supplemental disclosure of non-cash investing activity:
Non-rental capital expenditures in accounts payable $ 7 $ 5
Disposal of rental equipment in accounts receivable $ 4 $ 5
Supplemental disclosure of non-cash investing and financing activity:
Equipment acquired through finance lease $ 3 $ 3
The accompanying notes are an integral part of these financial statements.
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HERC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
Note 1-Organization and Description of Business
Herc Holdings Inc. ("we," "us," "our," "Herc Holdings," or "the Company") is one of the leading equipment rental suppliers with 453 locations in North America as of March 31, 2025. The Company conducts substantially all of its operations through subsidiaries, including Herc Rentals Inc. ("Herc"). With over 59 years of experience, the Company is a full-line equipment rental supplier offering a broad portfolio of equipment for rent. In addition to its principal business of equipment rental, the Company sells used equipment and contractor supplies such as construction consumables, tools, small equipment and safety supplies; provides repair, maintenance, equipment management services and safety training to certain of its customers; offers equipment re-rental services and provides on-site support to its customers; and provides ancillary services such as equipment transport, rental protection, cleaning, refueling and labor.
The Company's fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, lighting, trench shoring, and studio and production equipment. The Company's equipment rental business is supported by ProSolutions®, its industry-specific solutions-based services, which includes power generation, climate control, remediation and restoration, and pumps, and its ProContractor professional grade tools.
Note 2-Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The Company prepares its condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements, however, these condensed consolidated financial statements do not include all of the disclosures required for complete annual financial statements and, accordingly, certain information, footnotes and disclosures normally included in annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with Securities and Exchange Commission ("SEC") rules and regulations. The Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, the condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 13, 2025.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates.
Significant estimates inherent in the preparation of the condensed consolidated financial statements include receivables allowances, depreciation of rental equipment, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and intangible assets including goodwill and trade name, valuation of acquired intangible assets, pension and postretirement benefits, valuation of stock-based compensation, reserves for litigation and other contingencies and accounting for income taxes, among others.
Reclassifications
Certain prior year amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the previously reported net income, cash flows, or shareholder's equity.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Herc Holdings and its wholly owned subsidiaries. In the event that the Company is a primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. The Company accounts for investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation.
Recently Issued Accounting Pronouncements and Disclosure Rules
Not Yet Adopted
Improvements to Income Tax Disclosures
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating this new disclosure guidance and will adopt in accordance with the effective date.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)" ("ASU 2024-03"), which is intended to improve the disclosures about a public entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2024-03 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
Note 3-Revenue Recognition
The Company is principally engaged in the business of renting equipment. Ancillary to the Company's principal equipment rental business, the Company also sells used rental equipment, new equipment and parts and supplies and offers certain services to support its customers. The Company operates in North America with revenue from the United States representing approximately 93.6% of total revenue for the three months ended March 31, 2025, compared to 92.7% and for the same period in 2024.
The Company's rental transactions are accounted for under Accounting Standards Codification ("ASC") Topic 842, Leases("Topic 842"). The Company's sale of rental and new equipment, parts and supplies along with certain services provided to customers are accounted for under ASC Topic 606, Revenue from Contracts with Customers("Topic 606"). The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for such products or services.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
The following summarizes the applicable accounting guidance for the Company's revenues for the three months ended March 31, 2025 and 2024 (in millions):
Three Months Ended March 31,
2025 2024
Topic 842 Topic 606 Total Topic 842 Topic 606 Total
Revenues:
Equipment rental $ 666 $ - $ 666 $ 648 $ - $ 648
Other rental revenue:
Delivery and pick-up - 48 48 - 45 45
Other 25 - 25 26 - 26
Total other rental revenues 25 48 73 26 45 71
Total equipment rental 691 48 739 674 45 719
Sales of rental equipment - 105 105 - 69 69
Sales of new equipment, parts and supplies - 11 11 - 9 9
Service and other revenues - 6 6 - 7 7
Total revenues $ 691 $ 170 $ 861 $ 674 $ 130 $ 804
Topic 842 Revenues
Equipment Rental Revenue
The Company offers a broad portfolio of equipment for rent on daily, weekly or monthly basis, with substantially all rental agreements cancellable upon the return of the equipment. Virtually all customer contracts can be canceled by the customer with no penalty by returning the equipment within one day; therefore, the Company does not allocate the transaction price between the different contract elements.
Equipment rental revenue includes revenue generated from renting equipment to customers and is recognized on a straight-line basis over the length of the rental contract. As part of this straight-line methodology, when the equipment is returned, the Company recognizes as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, the Company will have customers return equipment and be contractually required to pay more than the cumulative amount of revenue recognized to date under the straight-line methodology. Also included in equipment rental revenue is re-rent revenue in which the Company will rent specific pieces of equipment from vendors and then re-rent that equipment to its customers. Provisions for discounts, rebates to customers and other adjustments are provided for in the period the related revenue is recorded.
Other
Other equipment rental revenue is primarily comprised of fees for the Company's rental protection program and environmental charges. Fees paid for the rental protection program allow customers to limit the risk of financial loss in the event the Company's equipment is damaged or lost. Fees for the rental protection program and environmental recovery fees are recognized on a straight-line basis over the length of the rental contract.
Topic 606 Revenues
Delivery and Pick-up
Delivery and pick-up revenue associated with renting equipment is recognized when the services are performed.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Sales of Rental Equipment, New Equipment, Parts and Supplies
The Company sells its used rental equipment, new equipment, parts and supplies. Revenues recorded for each category are as follows (in millions):
Three Months Ended March 31,
2025 2024
Sales of rental equipment $ 105 $ 69
Sales of new equipment 5 3
Sales of parts and supplies 6 6
Total $ 116 $ 78
The Company recognizes revenue from the sale of rental equipment, new equipment, parts and supplies when control of the asset transfers to the customer, which is typically when the asset is picked up by or delivered to the customer and when significant risks and rewards of ownership have passed to the customer. Sales and other tax amounts collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue.
The Company routinely sells its used rental equipment in order to manage repair and maintenance costs, as well as the composition, age and size of its fleet. The Company disposes of used equipment through a variety of channels including retail sales to customers and other third parties, sales to wholesalers, brokered sales and auctions.
The Company also sells new equipment, parts and supplies. The types of new equipment that the Company sells vary by location and include a variety of ProContractor tools and supplies, small equipment (such as work lighting, generators, pumps, compaction equipment and power trowels), safety supplies and expendables.
Under Topic 606, the accounts receivable balance, prior to allowances for credit losses, for the sale of rental equipment, new equipment, parts and supplies, was approximately $21 million and $17 million as of March 31, 2025 and December 31, 2024, respectively.
Service and Other Revenues
Service and other revenues primarily include revenue earned from equipment management and similar services for rental customers which includes providing customer support functions such as dedicated in-plant operations, plant management services, equipment and safety training, and repair and maintenance services particularly to industrial customers who request such services.
The Company recognizes revenue for service and other revenues as the services are provided. Service and other revenues are typically invoiced together with a customer's rental amounts and, therefore, it is not practical for the Company to separate the accounts receivable amount related to services and other revenues that are accounted for under Topic 606; however, such amount is not considered material.
Receivables and Contract Assets and Liabilities
Most of the Company's equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining equipment rental revenue that is accounted for under Topic 606 are generally the same customers that rent the Company's equipment. Concentration of credit risk with respect to the Company's accounts receivable is limited because a large number of geographically diverse customers makes up its customer base. The Company manages credit risk associated with its accounts receivable at the customer level through credit approvals, credit limits and other monitoring procedures. The Company maintains allowances for credit losses that reflect the Company's estimate of the amount of receivables that the Company will be unable to collect based on its historical write-off experience.
The Company does not have material contract assets or contract liabilities associated with customer contracts. The Company's contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. The Company did not recognize material revenue during the three months ended March 31, 2025 and 2024 that was included in the contract liability balance as of the beginning of each period.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Performance Obligations
Most of the Company's revenue recognized under Topic 606 is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, the Company does not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amount of such revenue recognized during the three months ended March 31, 2025 and 2024 was not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2025.
Contract Estimates and Judgments
The Company's revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons:
The transaction price is generally fixed and stated on the Company's contracts;
As noted above, the Company's contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation;
The Company's revenues do not include material amounts of variable consideration; and
Most of the Company's revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, the revenue recognized under Topic 606 is generally recognized at the time of delivery to, or pick-up by, the customer.
The Company monitors and reviews its estimated standalone selling prices on a regular basis.
Note 4-Rental Equipment
Rental equipment consists of the following (in millions):
March 31, 2025 December 31, 2024
Rental equipment $ 6,323 $ 6,423
Less: Accumulated depreciation (2,238) (2,198)
Rental equipment, net $ 4,085 $ 4,225
Note 5-Business Combinations
Pending Acquisition of H&E
On February 19, 2025, the Company entered into an Agreement and Plan of Merger (the "H&E Merger Agreement") that provides for its acquisition of H&E Equipment Services Inc. ("H&E"). Pursuant to the H&E Merger Agreement, H&E shareholders will receive $78.75 in cash and 0.1287 shares of Herc common stock for each share they own.
H&E provides its customers with a mix of high-quality general rental fleet including aerial work platforms, earthmoving equipment, material handling equipment, and other lines of equipment. H&E serves a diverse mix of customers across both construction and industrial markets through its network of approximately 160 branches in over 30 U.S. states.
The transaction is subject to customary closing conditions, including a minimum tender of at least one share more than 50 percent of then-outstanding H&E common shares and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Company commenced a tender offer on March 19, 2025 to acquire all of the outstanding shares of H&E common stock for $78.75 per share in cash and 0.1287 shares of Herc common stock. Following completion of the tender offer, the Company intends to acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer. The Company has obtained committed financing for the cash portion of the transaction. The transaction is expected to close in mid-year 2025.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
In accordance with the terms of H&E's prior agreement with United Rentals, Inc., the Company, on behalf of H&E, has paid a one-time termination fee of approximately $64 million to United Rentals which has been recorded in transaction expenses in our condensed consolidated statement of operations.
Otay Mesa Sales
On July 16, 2024, the Company completed the acquisition of substantially all of the assets of Otay Mesa Sales ("Otay"). Otay was a full-service general equipment rental company comprised of approximately 135 employees and four locations serving construction and industrial customers throughout the metropolitan areas of San Diego, California and Phoenix and Yuma, Arizona. The aggregate consideration for the acquisition was approximately $273 million. The acquisition and related fees and expenses were funded through available cash and drawings on the senior secured asset-based revolving credit facility.
The Otay acquisition was accounted for as a business combination using the acquisition method. Under this method of accounting, the purchase price has been allocated to the respective assets acquired and liabilities assumed based upon their estimated fair values, net of tax. The excess of consideration paid over the estimated fair value of the net identifiable assets acquired was initially recorded at $56 million, however, in accordance with ASC Topic 805, Business Combinations, the Company recorded a measurement period adjustment and increased goodwill by $11 million. The adjustment was primarily related to additional information obtained regarding the valuation of rental equipment as of the acquisition date.
The following table summarizes the purchase price allocation of the assets acquired and liabilities assumed (in millions) as of the acquisition date on July 16, 2024, after considering the measurement period adjustments described above:
Otay
Accounts receivable $ 14
Rental equipment 120
Property and equipment 8
Intangibles(a)
65
Total identifiable assets acquired 207
Current liabilities 1
Net identifiable assets acquired 206
Goodwill(b)
67
Net assets acquired $ 273
(a) The following table reflects the fair values and useful lives of the acquired intangible assets identified (in millions):
Otay Life (years)
Customer relationships $ 61 14
Non-compete agreements 4 5
Total acquired intangible assets $ 65
(b) The level of goodwill that resulted from the acquisition is primarily reflective of operational synergies that the Company expects to achieve that are not associated with identifiable assets, the value of Otay'sassembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes.
Pro Forma Supplementary Data
The unaudited pro forma supplementary data presented in the table below (in millions) gives effect to the acquisition of Otay as if it had been included in the Company's condensed consolidated results for the entire period reflected. The unaudited pro forma supplementary data is provided for informational purposes only and is not indicative of the Company's results of operations had the acquisitions been included for the period presented, nor is it indicative of the Company's future results.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Three Months Ended March 31, 2024
Herc
Otay
Total
Historic/pro forma total revenues $ 804 $ 18 $ 822
Historic/combined pretax income 81 2 83
Pro forma adjustments to consolidated pretax income:
Impact of fair value adjustments/useful life changes on depreciation(a)
2 2
Intangible asset amortization(b)
(2) (2)
Interest expense(c)
(5) (5)
Elimination of historic interest(d)
1 1
Elimination of merger related costs(e)
- -
Pro forma pretax income $ 79
(a) Depreciation of rental equipment was adjusted for the fair value at acquisition and changes in useful lives of equipment acquired.
(b) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets.
(c) As discussed above, the Company funded the Otay acquisition primarily using drawings on its senior secured asset-based revolving credit facility. Interest expense was adjusted to reflect interest on such borrowings.
(d) Historic interest on debt that is not part of the combined entity was eliminated.
(e) Merger related direct costs primarily comprised of financial and legal advisory fees associated with the Otayacquisition were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date.
Note 6-Goodwill and Intangible Assets
Goodwill
The following summarizes the Company's goodwill (in millions):
March 31, 2025 December 31, 2024
Balance at the beginning of the period:
Goodwill, gross $ 1,334 $ 1,154
Accumulated impairment losses (664) (671)
Goodwill 670 483
Additions 12 190
Currency translation - (3)
Balance at the end of the period:
Goodwill, gross 1,346 1,334
Accumulated impairment losses (664) (664)
Goodwill $ 682 $ 670
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Intangible Assets
Intangible assets, net, consisted of the following major classes (in millions):
March 31, 2025
Gross Carrying Amount Accumulated Amortization Net Carrying Value
Finite-lived intangible assets:
Customer-related and non-compete agreements $ 382 $ (116) $ 266
Internally developed software(a)
42 (15) 27
Total 424 (131) 293
Indefinite-lived intangible assets:
Trade name 271 - 271
Total intangible assets, net $ 695 $ (131) $ 564
(a) Includes capitalized costs of $16 million yet to be placed into service.
December 31, 2024
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Value
Finite-lived intangible assets:
Customer-related and non-compete agreements $ 382 $ (106) $ 276
Internally developed software(a)
39 (14) 25
Total 421 (120) 301
Indefinite-lived intangible assets:
Trade name 271 - 271
Total intangible assets, net $ 692 $ (120) $ 572
(a) Includes capitalized costs of $14 million yet to be placed into service.
Amortization of intangible assets was $11 million and $10 million for the three months ended March 31, 2025 and 2024, respectively.
Note 7-Assets Held for Sale
The Company's assets held for sale consists of the Cinelease studio entertainment and lighting and grip equipment rental business ("Cinelease"). The film and studio entertainment industry has shifted to a studio centric model where owning or managing a large footprint of studios is becoming more important to be a competitive equipment rental provider, requiring significant investment in fully managed studios. This business model is a departure from the Company's stated growth strategy.
During the fourth quarter of 2023, it was determined that Cinelease met all criteria to be classified as assets held for sale with the expectation of a transaction to be completed within 12 months. Since the determination was made, market conditions changed due to labor strikes within the industry that had impacts to Cinelease which slowed the process of exploring strategic alternatives. Cinelease continues to be actively marketed for sale and management expects a transaction to be completed in the current year. The Company continues to assess the fair value, less costs to sell, each reporting period it remains classified as held for sale.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
The following table summarizes the assets and liabilities held for sale (in millions):
March 31, 2025 December 31, 2024
Assets held for sale:
Receivables, net of allowances $ 9 $ 6
Other current assets 9 11
Total current assets held for sale $ 18 $ 17
Rental equipment, net $ 125 $ 124
Property and equipment, net 23 23
Right-of-use lease assets 47 47
Intangible assets, net 2 2
Other long-term assets 24 24
Total long-term assets held for sale $ 221 $ 220
Liabilities held for sale:
Current maturities of operating lease liabilities $ 7 $ 7
Accounts payable 4 5
Accrued liabilities 4 3
Total current liabilities held for sale $ 15 $ 15
Operating lease liabilities $ 58 $ 60
Total long-term liabilities held for sale $ 58 $ 60
Note 8-Leases
The Company leases real estate, office equipment and service vehicles. The Company's leases have remaining lease terms of up to 22 years, some of which include options to extend the leases for up to 25 years. The Company determines the lease term used to record each lease by including the initial lease term and, in the case where there are options to extend, will include the option to extend if it has determined that it is reasonably certain that the Company would exercise those options.
The Company also leases certain equipment that it rents to its customers where the payments vary based upon the amount of time the equipment is on rent. There are no fixed payments on these leases and, therefore, no lease liability or ROU assets have been recorded. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term.
The components of lease expense consist of the following (in millions):
Three Months Ended March 31,
Classification 2025 2024
Operating lease cost(a)
Direct operating $ 38 $ 36
Finance lease cost:
Amortization of ROU assets Depreciation and amortization 4 4
Interest on lease liabilities Interest expense, net 1 1
Sublease income Equipment rental revenue (15) (18)
Net lease cost $ 28 $ 23
(a) Includes short-term leases of $11 million and $14 million for the three months ended March 31, 2025 and 2024, respectively, and variable lease costs of $2 million and $1 million for the three months ended March 31, 2025 and 2024, respectively.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Note 9-Debt
The Company's debt consists of the following (in millions):
Weighted Average Effective Interest Rate at March 31, 2025
Weighted Average Stated Interest Rate at March 31, 2025
Fixed or Floating Interest Rate Maturity March 31,
2025
December 31,
2024
Senior Notes
2027 Notes 5.61% 5.50% Fixed 2027 $ 1,200 $ 1,200
2029 Notes 6.91% 6.63% Fixed 2029 800 800
Other Debt
ABL Credit Facility N/A 5.64% Floating 2027 1,620 1,621
AR Facility N/A 5.17% Floating 2025 359 400
Finance lease liabilities 4.35% N/A Fixed 2025-2032 75 77
Unamortized debt issuance costs(a)
(11) (12)
Total debt 4,043 4,086
Less: Current maturities of long-term debt (17) (17)
Total long-term debt, net $ 4,026 $ 4,069
(a) Unamortized debt issuance costs totaling $5 million and $6 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of March 31, 2025 and December 31, 2024, respectively, are included in "Other long-term assets" in the condensed consolidated balance sheets.
The effective interest rates for the fixed rate 2027 Notes and 2029 Notes (as defined below) includes the stated interest on the notes and the amortization of any debt issuance costs.
Senior Notes-2027 Notes
On July 9, 2019, the Company issued $1.2 billion aggregate principal amount of its 5.50% Senior Notes due 2027 (the "2027 Notes"). Interest on the 2027 Notes accrues at the rate of 5.50% per annum and is payable semi-annually in arrears on January 15 and July 15. The 2027 Notes will mature on July 15, 2027. Additional information about the 2027 Notes is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024.
Senior Notes-2029 Notes
On June 7, 2024, the Company issued $800 million aggregate principal amount of its 6.625% Senior Notes due 2029 (the "2029 Notes" and, together with the 2027 Notes, the "Notes"). Interest on the 2029 Notes accrues at the rate of 6.625% per annum and will be payable semi-annually in arrears on June 15 and December 15 of each year. The 2029 Notes will mature on June 15, 2029. Additional information about the 2029 Notes is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024.
ABL Credit Facility
On July 31, 2019, Herc Holdings, Herc and certain other subsidiaries of Herc Holdings entered into a credit agreement with respect to a senior secured asset-based revolving credit facility (the "ABL Credit Facility"), which was amended and extended on July 5, 2022. The ABL Credit Facility provides for aggregate maximum borrowings of up to $3.5 billion (subject to availability under a borrowing base). Up to $250 million of the revolving loan facility is available for the issuance of letters of credit, subject to certain conditions including issuing lender participation. Subject to the satisfaction of certain conditions and limitations, the ABL Credit Facility allows for the addition of incremental revolving commitments and/or incremental term loans. The ABL Credit Facility matures on July 5, 2027.
On March 11, 2025, the Company entered into the Third Amendment to the ABL Credit Facility to permit the consummation of the acquisition of H&E Equipment Services, Inc. and to allow for the incurrence of indebtedness and related liens under the ABL Credit Agreement in connection with the acquisition, see Note 5, "Business Combinations" for additional information.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Additional information about the ABL Credit Facility is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024.
Accounts Receivable Securitization Facility
The accounts receivable securitization facility (the "AR Facility"), as amended, matures on August 31, 2025 and has aggregate commitments up to $400 million. In connection with the AR Facility, Herc sells its accounts receivables on an ongoing basis to Herc Receivables U.S. LLC, a wholly-owned special-purpose entity (the "SPE"). The SPE's sole business consists of the purchase by the SPE of accounts receivable from Herc and borrowing by the SPE against the eligible accounts receivable from the lenders under the facility. The borrowings are secured by liens on the accounts receivable and other assets of the SPE. Collections on the accounts receivable are used to service the borrowings. The SPE is a separate legal entity that is consolidated in the Company's financial statements. The SPE assets are owned by the SPE and are not available to settle the obligations of the Company or any of its other subsidiaries. Herc is the servicer of the accounts receivable under the AR Facility. All of the obligations of the servicer and certain indemnification obligations of the SPE under the agreements governing the AR Facility are guaranteed by Herc pursuant to a performance guarantee. The AR Facility is excluded from current maturities of long-term debt as the Company has the intent and ability to fund the AR Facility's borrowings on a long-term basis either by further extending the maturity date of the AR Facility or by utilizing the capacity available at the balance sheet date under the ABL Credit Facility.
Borrowing Capacity and Availability
After outstanding borrowings, the following was available to the Company under the ABL Credit Facility and AR Facility as of March 31, 2025 (in millions):
Remaining
Capacity
Availability Under
Borrowing Base
Limitation
ABL Credit Facility $ 1,846 $ 1,846
AR Facility 41 41
Total $ 1,887 $ 1,887
Letters of Credit
As of March 31, 2025, $34 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $216 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.
Note 10-Financing Obligations
In prior years, Herc entered into sale-leaseback transactions pursuant to which it sold 44 properties located in the U.S. and certain service vehicles. The sale of the properties and service vehicles did not qualify for sale-leaseback accounting; therefore, the book value of the assets remain on the Company's consolidated balance sheet. The Company's financing obligations consist of the following (in millions):
Weighted Average Effective Interest Rate at March 31, 2025
Maturities March 31, 2025 December 31, 2024
Financing obligations 5.46% 2026-2038 $ 106 $ 107
Unamortized financing issuance costs
(2) (2)
Total financing obligations 104 105
Less: Current maturities of financing obligations (5) (4)
Financing obligations, net $ 99 $ 101
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Note 11-Income Taxes
Income tax provision was $10 million for the three months ended March 31, 2025 compared to $16 million in the same period of 2024. The income tax provision in the current period was primarily driven by non-deductible transaction costs.
Note 12-Commitments and Contingencies
Legal Proceedings
The Company is subject to a number of claims and proceedings that generally arise in the ordinary conduct of its business. These matters include, but are not limited to, claims arising from the operation of rented equipment and workers' compensation claims. The Company does not believe that the liabilities arising from such ordinary course claims and proceedings will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.
The Company has established reserves for matters where the Company believes the losses are probable and can be reasonably estimated. For matters where a reserve has not been established, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and there can be no assurance as to the outcome of the individual litigated matters. It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.
Off-Balance Sheet Commitments
Indemnification Obligations
In the ordinary course of business, the Company executes contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business or assets or a financial transaction. These indemnification obligations might include claims relating to the following: accuracy of representations; compliance with covenants and agreements by the Company or third parties; environmental matters; intellectual property rights; governmental regulations; employment-related matters; customer, supplier and other commercial contractual relationships; condition of assets; and financial or other matters. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim. The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable. The types of indemnification obligations for which payments are possible include the following:
The Spin-Off
In connection with the Spin-Off, pursuant to the separation and distribution agreement (agreements and defined terms are discussed in Note 15, "Arrangements with New Hertz"), the Company has assumed the liability for, and control of, all pending and threatened legal matters related to its equipment rental business and related assets, as well as assumed or retained liabilities, and will indemnify New Hertz for any liability arising out of or resulting from such assumed legal matters. The separation and distribution agreement also provides for certain liabilities to be shared by the parties. The Company is responsible for a portion of these shared liabilities (typically 15%), as set forth in that agreement. New Hertz is responsible for managing the settlement or other disposition of such shared liabilities. Pursuant to the tax matters agreement, the Company has agreed to indemnify New Hertz for any resulting taxes and related losses if the Company takes or fails to take any action (or permits any of its affiliates to take or fail to take any action) that causes the Spin-Off and related transactions to be taxable, or if there is an acquisition of the equity securities or assets of the Company or of any member of the Company's group that causes the Spin-Off and related transactions to be taxable.
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Note 13-Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The fair value of cash, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.
Cash Equivalents
Cash equivalents primarily consist of money market accounts which are classified as Level 1 assets which the Company measures at fair value on a recurring basis. The Company measures the fair value of cash equivalents using a market approach based on quoted prices in active markets. The Company had $17 million in cash equivalents at March 31, 2025 and $27 million at December 31, 2024.
Debt Obligations
The fair values of the Company's ABL Credit Facility, AR Facility and finance lease liabilities approximated their book values as of March 31, 2025 and December 31, 2024. The fair value of the Company's Notes are estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs) (in millions).
March 31, 2025 December 31, 2024
Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value
2027 Notes $ 1,200 $ 1,191 $ 1,200 $ 1,182
2029 Notes 800 800 800 809
Notes $ 2,000 $ 1,991 $ 2,000 $ 1,991
Note 14-Earnings (Loss) Per Share
Basic earnings (loss) per share has been computed based upon the weighted average number of common shares outstanding. Diluted earnings per share has been computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive.
The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share data).
Three Months Ended March 31,
2025 2024
Basic and diluted earnings (loss) per share:
Numerator:
Net income (loss), basic and diluted $ (18) $ 65
Denominator:
Basic weighted average common shares 28.5 28.3
Stock options, RSUs and PSUs - 0.1
Weighted average shares used to calculate diluted earnings per share 28.5 28.4
Earnings (loss) per share:
Basic $ (0.63) $ 2.30
Diluted $ (0.63) $ 2.29
Antidilutive stock options, RSUs and PSUs 0.2 -
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HERC HOLDINGS INC. AND
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited
Note 15-Arrangements with New Hertz
On June 30, 2016, the Company, in its previous form as the holding company of both the existing equipment rental operations as well as the former vehicle rental operations (in its form prior to the Spin-Off, "Hertz Holdings"), completed a spin-off (the "Spin-Off") of its global vehicle rental business through a dividend to stockholders of all of the issued and outstanding common stock of Hertz Rental Car Holding Company, Inc., which was re-named Hertz Global Holdings, Inc. ("New Hertz") in connection with the Spin-Off. New Hertz is an independent public company and continues to operate its global vehicle rental business through its operating subsidiaries including The Hertz Corporation ("THC").
In connection with the Spin-Off, the Company entered into a separation and distribution agreement (the "Separation Agreement") with New Hertz. In connection therewith, the Company also entered into various other ancillary agreements with New Hertz to effect the Spin-Off and provide a framework for its relationship with New Hertz. The following summarizes some of the most significant agreements and relationships that Herc Holdings continues to have with New Hertz.
Separation and Distribution Agreement
The Separation Agreement sets forth the Company's agreements with New Hertz regarding the principal actions taken in connection with the Spin-Off. It also sets forth other agreements that govern aspects of the Company's relationship with New Hertz following the Spin-Off including (i) the manner in which legal matters and claims are allocated and certain liabilities are shared between the Company and New Hertz; (ii) other matters including transfers of assets and liabilities, treatment or termination of intercompany arrangements and releases of certain claims between the parties and their affiliates; (iii) mutual indemnification clauses; and (iv) allocation of Spin-Off expenses between the parties.
Tax Matters Agreement
The Company entered into a tax matters agreement with New Hertz that governs the parties' rights, responsibilities and obligations after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns.
Note 16-Segment Information
The Comany has used the management approach in determining its reportable segments, and has determined that it has two operating segments that are aggregated into one reportable segment: equipment rental. The equipment rental segment derives revenues from customers by renting equipment from the Company's fleet, which includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, lighting, trench shoring, and studio and production equipment. The Company's broad portfolio of equipment for rent is fungible and can be deployed throughout the geographies where the Company does business.
The Company's Chief Operating Decision Maker ("CODM") has been identified as its chief executive officer ("CEO"). Performance and resource allocation, particularly the amount and timing of new equipment purchases, are evaluated by the CODM using net income. Net income is also used when determining other capital allocation priorities such as completing acquisitions, paying dividends or repurchasing Company shares. Net income of the equipment rental segment is reported on the consolidated statement of operations as consolidated net income. Additionally, the measures of segment assets are reported on the consolidated balance sheet as total consolidated assets and rental equipment, which is also disclosed in Note 4, "Rental Equipment."
There are no significant segment expenses other than those presented on the consolidated statement of operations and the Company does not have intra-entity sales.
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HERC HOLDINGS INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results of operations ("MD&A") should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Report, which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements and the accompanying notes including receivables allowances, depreciation of rental equipment, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and intangible assets including goodwill and trade name, pension and postretirement benefits, valuation of stock-based compensation, reserves for litigation and other contingencies, accounting for income taxes and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and our knowledge of actions that we may undertake in the future in determining the estimates that will affect our condensed consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.
OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT
We are engaged principally in the business of renting equipment. Ancillary to our principal business of equipment rental, we also sell used rental equipment, sell new equipment and consumables and offer certain services and support to our customers. Our profitability is dependent upon a number of factors including the volume, mix and pricing of rental transactions and the utilization of equipment. Significant changes in the purchase price or residual values of equipment or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes. Our business requires significant expenditures for equipment, and consequently we require substantial liquidity to finance such expenditures. See "Liquidity and Capital Resources" below.
Our revenues primarily are derived from rental and related charges and consist of:
Equipment rental (includes all revenue associated with the rental of equipment including ancillary revenue from delivery, rental protection programs and fueling charges);
Sales of rental equipment and sales of new equipment, parts and supplies; and
Service and other revenue (primarily relating to training and labor provided to customers).
Our expenses primarily consist of:
Direct operating expenses (primarily wages and related benefits, facility costs and other costs relating to the operation and rental of rental equipment, such as delivery, maintenance and fuel costs);
Cost of sales of rental equipment, new equipment, parts and supplies;
Depreciation expense relating to rental equipment;
Selling, general and administrative expenses;
Non-rental depreciation and amortization; and
Interest expense.
Pending Acquisition of H&E
On February 19, 2025, we entered into an Agreement and Plan of Merger (the "H&E Merger Agreement") that provides for our acquisition of H&E Equipment Services Inc. ("H&E"). Pursuant to the H&E Merger Agreement, H&E shareholders will receive $78.75 in cash and 0.1287 shares of Herc common stock for each share they own.
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HERC HOLDINGS INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
H&E provides its customers with a mix of high-quality general rental fleet including aerial work platforms, earthmoving equipment, material handling equipment, and other lines of equipment. H&E serves a diverse mix of customers across both construction and industrial markets through its network of approximately 160 branches in over 30 U.S. states.
The transaction is subject to customary closing conditions, including a minimum tender of at least one share more than 50 percent of then-outstanding H&E common shares and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. We commenced a tender offer on March 19, 2025 to acquire all of the outstanding shares of H&E common stock for $78.75 per share in cash and 0.1287 shares of Herc common stock. Following completion of the tender offer, we intend to acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer. We have obtained committed financing for the cash portion of the transaction. The transaction is expected to close in mid-year 2025.
In accordance with the terms of H&E's prior agreement with United Rentals, Inc., we, on behalf of H&E, have paid a one-time termination fee of approximately $64 million to United Rentals which has been recorded in transaction expenses in our condensed consolidated statement of operations.
Economic Conditions
Local markets continue to be impacted by the elevated interest rate environment and continued economic uncertainty. Our diversification across industries and project types have contributed to the resiliency of our business and we believe the operating environment continues to favor equipment rental companies of scale. We actively monitor the impact of the dynamic macroeconomic environment and manage our business to adjust to such conditions. Interest rates on our debt instruments remain elevated, however, the weighted average interest rate on our floating rate debt in the first quarter of 2025 has declined to 5.55% from 6.82% in the first quarter of 2024, reflecting movement from interest rate cuts in the second half of 2024. We monitor our exposure to floating rate debt and reevaluate our capital allocation strategy, as necessary. We have returned to a more normalized cadence of rental equipment expenditures and disposals, remaining mindful of the possibility we may experience supply chain disruptions in the future. Although inflation appears to have stabilized, we have experienced and expect to continue to experience inflationary pressures, potentially as a result of tariffs imposed, a portion of which may be passed on to customers. There are also costs for which the pass through to customers is less direct, such as repairs and maintenance, and labor. We cannot predict the extent to which our financial condition, results of operations or cash flows will ultimately be impacted by these ongoing economic conditions, however, we believe we are well-positioned to operate effectively through the present environment.
Seasonality
Our business is seasonal, with demand for our rental equipment tending to be lower in the winter months, particularly in the northern United States and Canada. Our equipment rental business, especially in the construction industry, has historically experienced decreased levels of business from December until late spring and heightened activity during our third and fourth quarters until December. We have the ability to manage certain costs to meet market demand, such as fleet capacity, the most significant portion of our cost structure. For instance, to accommodate increased demand, we increase our available fleet and staff during the second and third quarters of the year. A number of our other major operating costs vary directly with revenues or transaction volumes; however, certain operating expenses, including rent, insurance and administrative overhead, remain fixed and cannot be adjusted for seasonal demand, typically resulting in higher profitability in periods when our revenues are higher, and lower profitability in periods when our revenues are lower. To reduce the impact of seasonality, we are focused on expanding our customer base through products that serve different industries with less seasonality and different business cycles.
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HERC HOLDINGS INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
Three Months Ended March 31,
2025 2024 Change Change
Equipment rental $ 739 $ 719 $ 20 3 %
Sales of rental equipment 105 69 36 52
Sales of new equipment, parts and supplies 11 9 2 22
Service and other revenue 6 7 (1) (14)
Total revenues 861 804 57 7
Direct operating 327 307 20 7
Depreciation of rental equipment 172 160 12 8
Cost of sales of rental equipment 76 46 30 65
Cost of sales of new equipment, parts and supplies 8 6 2 33
Selling, general and administrative 118 112 6 5
Transaction expenses 74 3 71 NM
Non-rental depreciation and amortization 33 29 4 14
Interest expense, net 62 61 1 2
Other expense (income), net (1) (1) - -
Income (loss) before income taxes (8) 81 (89) (110)
Income tax provision (10) (16) 6 (38)
Net income (loss) $ (18) $ 65 $ (83) (128) %
NM - not meaningful
Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024
Equipment rental revenue increased $20 million, or 3%, during the first quarter of 2025 reflecting demand across end markets and incremental revenue from prior year greenfields and acquisitions.
Sales of rental equipment increased $36 million, or 52%, during the first quarter of 2025 when compared to the first quarter of 2024 as we increased the volume of sales in line with our fleet rotation planning to improve the equipment mix and manage fleet age. The margin on sales of rental equipment was 28% in 2025 compared to 33% in 2024. The decrease in margin on sale of rental equipment in 2025 resulted from continued normalization of used equipment pricing in the market.
Direct operating expenses in the first quarter of 2025 increased $20 million, or 7%, when compared to the first quarter of 2024. Direct operating expenses were 44.2% of equipment rental revenue in 2025, compared to 42.7% in the prior-year period. The increase as a percent of rental revenue related to lower fixed cost absorption due to the normal seasonality associated with the first quarter. Primary drivers of the increase include (i) facilities expense of $7 million as we have added more locations through acquisitions and opening greenfield locations, (ii) self insurance reserve increase of $5 million due to claims development attributable to unsettled cases, and (v) re-rent expense of $3 million due to corresponding increase in re-rent revenue.
Depreciation of rental equipment increased $12 million, or 8%, during the first quarter of 2025 when compared to the first quarter of 2024 due to an increase in average fleet size. Non-rental depreciation and amortization increased $4 million, or 14%, primarily due to amortization of intangible assets related to acquisitions.
Selling, general and administrative expenses increased $6 million, or 5%, in the first quarter of 2025 when compared to the first quarter of 2024. Selling, general and administrative expenses were 16.0% and 15.6% of equipment rental revenue in 2025 compared to 2024, respectively.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Transaction expenses increased $71 million during the first quarter of 2025 when compared to the prior year due to costs incurred related to the acquisition of H&E, primarily the one-time termination fee paid to United Rentals on behalf of H&E of $64 million.
Interest expense, net increased $1 million, or 2%, during the first quarter of 2025 when compared with the first quarter of 2024 due to increased borrowings primarily to invest in rental equipment offset by lower interest rates on floating rate debt.
Income tax provision was $10 million during the first quarter of 2025 compared to $16 million in the same period of 2024. The effective tax rate in the current period was primarily driven by non-deductible transaction costs.
LIQUIDITY AND CAPITAL RESOURCES
Our primary uses of liquidity include the payment of operating expenses, purchases of rental equipment to be used in our operations, servicing of debt, funding acquisitions, payment of dividends, and share repurchases. Our primary sources of funding are operating cash flows, cash received from the disposal of equipment and borrowings under our debt arrangements. As of March 31, 2025, we had approximately $4.1 billion of total nominal indebtedness outstanding.
Our liquidity as of March 31, 2025 consisted of cash and cash equivalents of $48 million and unused commitments of approximately $1.9 billion under our ABL Credit Facility and AR Facility. See "Borrowing Capacity and Availability" below for further discussion. Our practice is to maintain sufficient liquidity through cash from operations, our ABL Credit Facility and our AR Facility to mitigate the impacts of any adverse financial market conditions on our operations. We believe that cash generated from operations and cash received from the disposal of equipment, together with amounts available under the ABL Credit Facility and the AR Facility or other financing arrangements will be sufficient to meet working capital requirements, anticipated capital expenditures, payment of dividends, and debt payments, if any, over the next twelve months. We intend to finance the cash portion of the H&E acquisition through a combination of issuance of new debt instruments and potentially increasing the aggregate maximum borrowing limit under our ABL Credit Facility, subject to borrowing base limitations.
Cash Flows
Significant factors driving our liquidity position include cash flows generated from operating activities and capital expenditures. Historically, we have generated and expect to continue to generate positive cash flow from operations. Our ability to fund our capital needs will be affected by our ongoing ability to generate cash from operations and access to capital markets.
The following table summarizes the change in cash and cash equivalents for the periods shown (in millions):
Three Months Ended March 31,
2025 2024 $ Change
Cash provided by (used in):
Operating activities $ 171 $ 240 $ (69)
Investing activities (133) (296) 163
Financing activities (73) 48 (121)
Effect of exchange rate changes - - -
Net change in cash and cash equivalents $ (35) $ (8) $ (27)
Operating Activities
During the three months ended March 31, 2025, we generated $69 million less cash from operating activities compared with the same period in 2024. The decrease was primarily related to decreased profitability driven by transaction expenses incurred and the timing of payments on accounts payable and accrued liabilities.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Investing Activities
Cash used in investing activities decreased $163 million during the three months ended March 31, 2025 when compared with the prior-year period. Our primary use of cash in investing activities is for the acquisition of rental equipment, non-rental capital expenditures and acquisitions. Generally, we rotate our equipment and manage our fleet of rental equipment in line with customer demand and continue to invest in our information technology, service vehicles and facilities. Changes in our net capital expenditures are described in more detail in the "Capital Expenditures" section below. Acquisition expenditures of $11 million were related to holdback payments on prior year acquisitions.
Financing Activities
Financing cash flows decreased $121 million during the three months ended March 31, 2025 when compared with the prior-year period. Financing activities primarily represents our changes in debt, which included borrowings of $520 million on our revolving lines of credit and securitization which were used primarily to invest in rental equipment during the period. This was offset by repayments of $561 million through operations. Net borrowings in the prior year period were $83 million.
In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may from time to time repurchase our debt, including our notes, bonds, loans or other indebtedness, in privately negotiated, open market or other transactions and upon such terms and at such prices as we may determine. We will evaluate any such transactions in light of then-existing market conditions, taking into account our current liquidity and prospects for future access to capital. The repurchases may be material and could relate to a substantial proportion of a particular class or series, which could reduce the trading liquidity of such class or series.
Capital Expenditures
Our capital expenditures relate largely to purchases of rental equipment, with the remaining portion representing purchases of property, equipment, and information technology. The table below sets forth the capital expenditures related to our rental equipment and related disposals for the periods noted (in millions).
Three Months Ended March 31,
2025 2024
Rental equipment expenditures $ 187 $ 181
Disposals of rental equipment (94) (61)
Net rental equipment expenditures $ 93 $ 120
Net capital expenditures for rental equipment decreased $27 million during the three months ended March 31, 2025 compared to the same period in 2024. As the supply chain constraints have eased, our rental equipment expenditures have returned to taking deliveries and disposing of equipment in line with our normal seasonal cadence, while we continue to optimize our fleet by investing in high growth markets as part of our long-term capital expenditure plans.
Borrowing Capacity and Availability
Our ABL Credit Facility and AR Facility (together, the "Facilities") provide our borrowing capacity and availability. Creditors under the Facilities have a claim on specific pools of assets as collateral as identified in each credit agreement. Our ability to borrow under the Facilities is a function of, among other things, the value of the assets in the relevant collateral pool. We refer to the amount of debt we can borrow given a certain pool of assets as the "Borrowing Base."
In connection with the AR Facility, we sell accounts receivable on an ongoing basis to a wholly-owned special-purpose entity (the "SPE"). The accounts receivable and other assets of the SPE are encumbered in favor of the lenders under our AR Facility. The SPE assets are owned by the SPE and are not available to settle the obligations of the Company or any of its other subsidiaries. Substantially all of the remaining assets of Herc and certain of its U.S. and Canadian subsidiaries are encumbered in favor of our lenders under our ABL Credit Facility. None of such assets are available to satisfy the claims of our general creditors. See Note 11, "Debt" to the notes to our consolidated financial statements included in Part II, Item 8 "Financial
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2024, and Note 9, "Debt" included in Part I, Item 1 "Financial Statements" of this Report for more information.
With respect to the Facilities, we refer to "Remaining Capacity" as the maximum principal amount of debt permitted to be outstanding under the Facilities (i.e., the amount of debt we could borrow assuming we possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under the Facility. We refer to "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the Borrowing Base less the principal amount of debt then-outstanding under the Facility (i.e., the amount of debt we could borrow given the collateral we possess at such time).
As of March 31, 2025, the following was available to us (in millions):
Remaining
Capacity
Availability Under
Borrowing Base
Limitation
ABL Credit Facility $ 1,846 $ 1,846
AR Facility 41 41
Total $ 1,887 $ 1,887
As of March 31, 2025, $34 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $216 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.
Covenants
Our ABL Credit Facility, our AR Facility and our Notes contain a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain indebtedness, make certain restricted payments (including paying dividends, redeeming stock or making other distributions), create liens, make investments, make acquisitions, engage in mergers, fundamentally change the nature of our business, make capital expenditures, or engage in certain transactions with certain affiliates.
Under the terms of our ABL Credit Facility, our AR Facility and our Notes, we are not subject to ongoing financial maintenance covenants; however, under the ABL Credit Facility, failure to maintain certain levels of liquidity will subject us to a contractually specified fixed charge coverage ratio of not less than 1:1 for the four quarters most recently ended. As of March 31, 2025, the appropriate levels of liquidity have been maintained, therefore this financial maintenance covenant is not applicable.
At March 31, 2025, Herc Holdings' balance sheet was substantially identical to that of Herc, with the exception of the debt held by Herc Holdings (Notes and ABL Credit Facility) and certain components of shareholders equity. For the three months ended March 31, 2025 and 2024, the statements of operations of Herc Holdings and Herc were identical with the exception of interest expense on the debt held at Herc Holdings that is not reflected in the statement of operations of Herc.
Additional information on the terms of our Notes, ABL Credit Facility and AR Facility is included in Note 11, "Debt" to the notes to our consolidated financial statements included in Part II, Item 8 "Financial Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2024. For a discussion of the risks associated with our indebtedness, see Part I, Item 1A "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
Dividends
On February 4, 2025, we declared a quarterly dividend of $0.70 per share to record holders as of February 18, 2025, with payment date of March 4, 2025. The declaration of dividends on our common stock is discretionary and will be determined by our board of directors in its sole discretion and will depend on our business conditions, financial condition, earnings, liquidity and capital requirements, contractual restrictions and other factors. The amounts available to pay cash dividends are restricted by our debt agreements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of March 31, 2025, there have been no material changes to our indemnification obligations as disclosed in Note 17, "Commitments and Contingencies" in our Annual Report on Form 10-K for the year ended December 31, 2024. For further information, see the discussion on indemnification obligations included in Note 12, "Commitments and Contingencies" in Part I, Item 1 "Financial Statements" of this Report.
For information concerning contingencies, see Note 12, "Commitments and Contingencies" in Part I, Item 1 "Financial Statements" of this Report.
RECENT ACCOUNTING PRONOUNCEMENTS
For a discussion of recent accounting pronouncements, see Note 2, "Basis of Presentation and Significant Accounting Policies" in Part I, Item 1 "Financial Statements" of this Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of market risks, including the effects of changes in interest rates (including credit spreads), foreign currency exchange rates, and fluctuations in fuel prices. We manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments.
As of March 31, 2025, there has been no material change in the information reported under Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined under Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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HERC HOLDINGS INC. AND SUBSIDIARIES
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a description of certain pending legal proceedings see Note 12, "Commitments and Contingencies" to the notes to our condensed consolidated financial statements in Part I, Item 1 "Financial Statements" of this Report.
ITEM 1A. RISK FACTORS
Except as set forth below, there have been no material changes to our risk factors from those previously disclosed under Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Share Repurchase Program
In March 2014, we announced a $1 billion share repurchase program (the "Share Repurchase Program"), which replaced an earlier program. The Share Repurchase Program permits us to purchase shares through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws. We are not obligated to make any repurchases at any specific time or in any specific amount and our repurchases may be subject to certain predetermined price/volume guidelines, set from time-to-time, by our board of directors. The timing and extent to which we repurchase shares will depend upon, among other things, strategic priorities, market conditions, share price, liquidity targets, contractual restrictions, regulatory requirements and other factors. Share repurchases may be commenced or suspended at any time or from time-to-time, subject to legal and contractual requirements, without prior notice. There were no share repurchases during the three months ended March 31, 2025. As of March 31, 2025, the approximate dollar value that remains available for share purchases under the Share Repurchase Program is $161 million.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
Exhibit
Number
2.1
3.1.1
3.1.2
3.1.3
3.1.4
3.2
10.1
31.1*
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002 of 2002
31.2*
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities and Exchange Act of 1934, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002
32.1**
18 U.S.C. Section 1350 Certifications of Principal Executive Officer and the Principal Financial Officer
101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH* Inline XBRL Taxonomy Extension Schema Document
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_______________________________________________________________________________
*Filed herewith
**Furnished herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 22, 2025 HERC HOLDINGS INC.
(Registrant)
By: /s/ MARK HUMPHREY
Mark Humphrey
Senior Vice President and Chief Financial Officer
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