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Hertz Lowers Earnings Growth Estimates for 2000 and 2001

1 September 2000

Hertz Lowers Earnings Growth Estimates for 2000 and 2001 - Continues to Expect Record Earnings for the Two Years

    PARK RIDGE, N.J., Aug. 31 The Hertz Corporation
has lowered its outlook for net income growth for the Third and
Fourth Quarters of 2000 and for the full year 2001; however, the Company
expects to achieve record net income for both 2000 and 2001.  In 1999, the
Company reported its sixth consecutive year of record earnings, $336 million
or $3.10 per share.
    In its revised outlook, the Company estimates net income per share to be
$1.30 in the Third Quarter and $0.51 in the Fourth Quarter of 2000,
respectively $0.13 and $0.12 per share below analysts' estimates for these
periods, and expects net income per share for the full year 2000 to be $3.30.
The Company also expects the First Quarter of 2001 will be weaker than the
comparable period in the prior year, but believes it will experience low,
single-digit net income growth for the full year 2001.
    Craig R. Koch, President and Chief Executive Officer, said, "we are
disappointed that we will not meet our income targets for 2000 and 2001, but
we are on track to achieve record earnings for the seventh and eighth
consecutive years.  Achieving stronger earnings growth will depend, primarily,
on modest price increases in the car and equipment rental segments.  Over the
long term, we believe there is strong growth potential in our businesses and
opportunities to further reduce our cost base."
    The Company noted that competitive conditions did not support its Third
Quarter initiative to raise U.S. discretionary prices in car rental and that
pricing in the commercial market, particularly for large accounts, remains
very competitive.  The lack of price increases in the car rental segment has
been accompanied by lower than anticipated car rental volume growth.  The
Company believes that the United Airlines labor dispute and severe
weather-related airport disruptions affected volume growth.  In the North
American equipment rental market, downward pricing pressure continues,
resulting from a general excess of fleet across the industry.
    Hertz also attributed its revised outlook for net income to other,
secondary, factors that affect both its worldwide vehicle rental and leasing
and worldwide industrial and construction equipment rental segments.  These
factors include wage inflation, higher interest on debt used to finance
vehicles and equipment, unfavorable foreign exchange rates and higher costs
related to vehicle acquisitions.  Also contributing to the revised outlook are
inflation in facilities and advertising costs, along with the costs of
additional investments in systems and the consolidation of European financial
processing in Dublin, Ireland.  The Company believes its results will not be
materially affected by the recently announced Firestone tire recall.
    Projected revenue growth in the U.S. car rental business remains solid at
about 8% for the Third Quarter and 7% for the Fourth Quarter of 2000,
compared with the same periods in 1999.  For the company's international car
rental operations, revenue growth before the effect of foreign exchange is
expected to be about 8% each quarter year-over-year.
    These revenue assumptions are based on the following estimates.

                                         Consolidated           Airport
                                    Revenue    Transaction      Revenue
                                    Per Day        Days         Per Day
    U.S. Car Rental  Q3 - 2000    <1%> - flat   + 8% - 9%    <0.5%> - + 0.5%
                     Q4 - 2000    <1%> - flat   + 7% - 8%    <0.5%> - + 0.5%
    International
      Car Rental     Q3 - 2000    <1%> - flat * + 8% - 9%
                     Q4 - 2000    <1%> - flat * + 8% - 9%

    * Before the effect of foreign exchange

    Revenue growth in the equipment rental segment has been revised downward
slightly to 11-13% year-over-year, due to lower than expected peak season
demand and a general slowdown in construction activity.  The Company also
noted weakening used equipment resale prices.  The Company expects a
mid-single digit full year 2000 pre-tax margin in this segment.
    The Company is implementing a number of measures to reduce costs,
including trimming its North American car and equipment rental fleets,
temporarily slowing suburban car rental and equipment rental expansion plans
and rationalizing staff levels to reflect current conditions.
    Hertz is expected to announce actual Third Quarter revenue and net income
on October 13 before the opening of trading.