Hertz 2015 Annual Report Download - page 20

Table of Contents
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Contractor Tools and Supplies Sales
We sell a variety of contractor tools and supplies to our customers, including tools (including hand and power tools), small equipment (such as
work lighting, generators, pumps, compaction equipment and power trowels), safety supplies and expendables.
Service and Support
We provide repair, maintenance and equipment management services to certain of our customers across a number of industries, but particularly in
the industrial sector, including through the sale of parts to customers for use with their equipment. We provide maintenance capabilities for our
rental equipment that are available on-site at the customer’s location or within our operations at the customer’s direction. We further provide
support functions through our dedicated in-plant operations, tool trailers and plant management systems, particularly for industrial customers and
those customers who request such services. These support functions include a variety of performance measurement tools that allow our
customers to consider key performance indicators in their operations, which we believe enables our customers to reduce their cost and improve
overall equipment utilization.
We also offer a loss damage waiver product for many classes of equipment, which for a fee allows our customers to limit the risk of financial loss
in the event our equipment is damaged or lost.
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HERC has approximately 280 company-operated branches, of which approximately 270 are in the United States and Canada, and the remainder
are located in the United Kingdom, China and through joint venture arrangements in Saudi Arabia and Qatar. We also operate our equipment rental
business through franchisee owned branches in Greece, Iceland, Portugal and Corsica in Europe, in Afghanistan in the Middle East, in Panama in
Central America and in Chile in South America.
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In addition to our organic growth, we have grown HERC through strategic acquisitions. In recent years, we took certain steps to diversify our
portfolio and increase exposure to a variety of niche markets which experience business cycles that may vary in intensity and duration from that of
the general economy and that we believe will enable HERC to experience higher levels of growth than the economy in general. Since 2009, we
have completed 11 acquisitions to strengthen our position in a variety of specialty rental markets, including the broader industrial market (DW
Pumps, Forces, Western Machinery, Pioneer, Delta Rigging & Tools and We Got it Rental) and the motion picture and television production
industries (Cinelease, 24/7 and 1st Call Studio Equipment). We also have expanded internationally, including opening company-operated locations
in China in 2008, as well as the establishment of joint ventures with Saudi Arabia-based Dayim Holdings Company, Ltd. in February 2010,
eventually extending into Qatar in 2014. In October 2015, we sold our operations in France and Spain, which represented approximately $63 million
in revenues and $6 million in income before income taxes in 2015.
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HERC serves a wide range of customers across the construction, infrastructure, industrial and specialty verticals. Key areas that we serve under
these verticals include building services, commercial, engineering, hospitality, oil and gas, petrochemical, railroads and entertainment. We also
serve other customers across a fragmented group of industries (such as governmental entities and government contractors, disaster recovery and
remediation firms, utility operators, individual homeowners and agricultural producers). Serving a wide range of industries enables us to reduce
dependency on a single or limited number of customers and assists in reducing the seasonality of our revenues and its impact from any one
segment's cycle. We operate in mid-size and large urban markets which enables us to reduce exposure to any single customer or market, with no
single customer making up more than 3% of our worldwide rental revenues for the year ended December 31, 2015. Of our rental revenues for the
year ended December 31, 2015 (excluding France and Spain which were sold in October 2015), approximately 38% of equipment rental revenues
were derived from construction activity and 23% were derived from industrial activity, while the remaining revenues were generated by rentals to
government, railroad, entertainment and other types of customers.
We enter into rental agreements with companies, governmental entities and agencies or other organizations seeking
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