Ladies and gentlemen, thank you for standing by and welcome to Hertz Global Holdings Third Quarter 2007 Earnings Conference Call. The company has asked me to read the following statement to you. Certain statements made on this call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include but are not limited to statements concerning Hertz Global Holdings outlook, management forecast, opportunities to increase productivity and profitability, implementation of productivity and efficiency initiatives, anticipated pricing and growth, future performance, management’s plans, acquisitions, contingent liabilities, taxes, and liquidity. These statements maybe preceded by, followed by, or include the words “believes, expects, anticipates, intends, plans, estimates, projects, seeks, will, may, should, forecast, or, similar expressions.” Forward-looking statements are not guarantees of performance and by their nature are subject to inherent risks and uncertainties and actual results may differ. Any forward-looking information relayed on this call speaks only as of the date hereof. Hertz Global Holdings undertakes no obligation to update or revise any forward-looking statements to reflect new information, change circumstances or unanticipated events. You are cautioned therefore that you should not rely on these forward-looking statements. You should understand that the risks and uncertainties discussed under the headings Risk Factors and Cautionary Note regarding forward-looking statements in the Hertz Global Holdings Form 10-K for the year ended December 31, 2006 and for the Form 10-Q for the three months ended on June 30, 2007 could cause future results or outcomes to differ materially from those expressed or implied in Hertz Global Holdings forward-looking statements. I would now like to turn the conference over to our host, Ms. Lauren Babbis. Please go ahead.

Thank you. Good morning everyone and welcome to Hertz Global Holdings Third Quarter 2007 Conference Call. You should all have our press release and associated financial information. In a minute, I will turn the call over to Mark Frissora., Hertz’s Chairman and CEO. Also, speaking today Joe Nothwang, Executive Vice-President and President Vehicle Rental and Leasing, the Americas and Pacific; Michel Taride, Executive Vice-President and President Hertz Europe Limited; Gerry Plescia, Executive Vice-President and President of HERC; and Elyse Douglas, Hertz’s Executive Vice-President and Chief Financial Officer. Today, we will use certain non-GAAP financial measures, all of which are reconciled with GAAP numbers in the press release attachment posted on our website, hertz.com/investorrelation. We do not believe that the GAAP profit measures fully reflect our operating performance because of restructuring costs, certain non-cash expenses, and non-recurring charges relating to purchase accounting and debt cost amortization. These non-GAAP measures better reflect our profitability and the progress we are making on our financial goals. Our call today focuses on Hertz Global Holdings, the publicly-traded company. Third quarter results for the Hertz Corporation , its wholly owned subsidiary, are identical except for $ 0.2 million of additional interest expense incurred by the Hertz Corporation on an inter-company loan from Hertz Global Holdings. This impacts, both pre-tax and net income at the Hertz Corporation level. And now, I will turn the call over to Mark Frissora.

Thanks, Lauren and good morning, everyone! Thanks for joining us! Let us first turn to our consolidated financial results for the quarter. Hertz generated record total third quarter revenues of $2.45 billion which is a year-over-year increase of 9.3%. Worldwide Rent-a-car and Hertz each achieved record revenues for the quarter. Adjusted pre-tax income, adjusted net income and corporate EBITDA all shared strong improvement versus Q3 2006. In fact, adjusted per-tax income grew 34.4% and our adjusted pre-tax margin improved by 260 basis points. Adjusted net income per share for the quarter was also very positive increasing 35% to $0.65 from $0.48 per share in the third quarter of 2006. This significant year-over-year improvement and profitability was due to a 280-basis point improvement in direct operating and SG&A expense and a 60-basis point improvement in total interest expense. Each expense is a percentage of revenue in spite of increased depreciation expense. On a GAAP basis third quarter income before income taxes and minority interest that is pre-tax income increased by $91 million or 56% year-over-year. GAAP net income was $162 million compared to $107.5 million in the third quarter of 2006, an increase of over 50%. Turning to our cash flow, net corporate debt at September 30, 2007 declined by $354 million year-over-year to $4.57 billion. Using year end 2006 as a starting point, the increase in net corporate debt at September 30th was limited to only $34 million compared to $104 million increase in the same period a year ago. The improvement in levered asset cash flow after fleet growth in each comparison was a result of higher earnings, lower working capital requirement, lower investment in Hertz revenue earning equipment and higher car rental net fleet equity requirement. These results are particularly gratifying on several counts. First, they retained in…

Thank you, Mark and good morning everyone. Let me give you some headlines on worldwide car rental’s third quarter 2007 performance. Total revenues increased 11% to $2 billion, a record quarter for us. Corporate EBITDA was 19.7% higher and adjusted pre-tax income increased 28.6%, all very positive operating metrics. Profitability for worldwide car rental was enhanced by improved pricing and length which will be detailed shortly, combined with continued progress on the cost actions Mark discussed. An important macro trend for car rental is employment statistics, the Department of Transportation recently reported domestic employment growth for July of 3.9% following 1.6% and 3.2% growth for the first and second quarters respectively. Second quarter international employment growth was 2.9% with July as 3.2%. Employment numbers are good directional indicators for our airport car rental business, but the absolute growth rates do not correlate well historically to our airport transaction growth rate. On a worldwide basis, rental rate revenue growth basically time and milege before the impact for foreign exchange was 8% and consisted of a 5.5 increase in worldwide transaction days and an increase of 2.4% in rental rate revenue per day or RPD. Average rental length increased by 0.8% year-over-year. Let me just remind everyone not to get overly focused on RPD because it also reflects shifts in our business mix and there are underlying lengths and cost differences in each market sector which favourably impact overall profitability. In the domestic off-airport market, we continue to gain momentum across all sectors with total revenue growth of 13.6%. During the quarter, transaction days grew by 15.8% and the average transaction length increased by 2.9%. The average rental length off-airport was about a day and a half longer than at our airport location. While these off-airport rentals are at a relatively lower…

Thank you, Joe and good morning to everybody. International car rental experienced a 1.9% increase in revenue per day and transaction day growth of 7.1% driven by 2.6% improvement in revenue per day and strong volume trends in Europe which represents a substantial portion of international. Transaction day growth was particularly strong in business generated through our affiliation with Ryanair and other market partners, and also the leisure and van, truck sectors which we have been targeting for growth over the last few years. Vans and trucks include light commercial vehicles and in Germany, also heavy trucks. This business generates good contribution primarily due to the longer than average rental length and good RPD. This results in revenue per vehicle which is 20% higher than we achieved for cars. We are a significant player in this market in most countries and a leader in the heavy truck segment in Germany. From what we can see today, the outlook for fourth quarter revenue growth in Europe is favourable, and even with the weakness of the dollar, we experienced good in-bound volume from the US in September and October which is important given the good level of contribution generated by this business for us. In Europe, we gained several new commercial accounts this quarter and resigned two of our top ten accounts on an exclusive worldwide basis. In December of 2005, we launched Neverlost, our navigation solution in Europe and is being very popular. Last month, for the first time, Europe rent-a-car achieved monthly Neverlost revenue above $1 million. The Hertz collections, the growing source of revenue worldwide performed well in the first quarter generating revenues of $213 million compared to $126 million in the same quarter in 2006, during which the green collection was launched. We maintained our global push in…

Thanks, Michel and good morning everyone. Turning now to Worldwide HERC, our total third quarter revenue was a record $465 million, an increase of 2.6% year-over-year. Rental and rental related revenues which include charges for delivery, loss, damage, waivers and fuelling increased by 3.1%. Corporate EBITDA and adjusted pre-tax income reached higher year-over-year by 5.2% and the adjusted pre-tax income margin improved by 60 basis points. This improvement in profitability was driven by volume growth and our cost cutting initiatives. The major trend affecting HERC is the softening US construction market. In August, the F.W. Dodge increased their 2007 forecast of non-residential construction growth to 7.2%, however, their latest report shows 3% growth year-to-date. The latest architectural billings index shows signs of continued growth with effects in 9 to 12 months, albeit at a slowing pace. The F.W. Dodge forecast which was released last week was slightly lower than previously forecasted for non-residential construction, but is basically in-line with how we have been forecasting our business. The third quarter continues to be impacted by the slower growth in some sectors of US residential and non-residential construction market, particularly in Florida, the southeast region, and parts of California where construction activity is contracted. Other regions in North America are experiencing stronger results through the mix of their business which has a higher percentage of industrial and fragmented rental activity. Overall, our market conditions have not deteriorated since our call in early August, although pressure at construction-related activity continues. Worldwide pricing is essentially the same as third quarter 2006 with broad positive pricing in Canada and Europe offsetting a slightly less than 1% decline in the US, which is due to some pricing pressure on earth-moving equipment. Revenue growth at HERC’s European operations continue at a double digit pace. Aerial pub services,…

Thank you, Gerry and good morning everyone. As Mark mentioned, our third quarter profitability metrics improved dramatically year-over-year on both the GAAP and an adjusted basis. As I discuss the financial results, I’ll be referencing profit improvement as a percentage of revenues and will be using table two in our press release which shows the income statement on an adjusted basis along with the reconciliation to GAAP. Adjustments to our GAAP results totalled $79.8 million in the third quarter, primarily due to non-cash debt charges, purchase accounting and restructuring cost, offset by a $9.2 million credit related to the change in vacation accrual. Our adjusted profit margins increased due to improvements in our major COGS lines. Direct operating, selling general and administrative and corporate interest expense declined by 370 basis points as a percentage of revenue. This margin benefit was partially offset by higher fleet carrying cost that is depreciation and interest expense due to higher per unit cost in larger fleets. We achieved this improvement even as we increased our net advertising spend by $12 million. The net result is an improvement of 260 basis points year-over-year in our adjusted pre-tax margin. Total cash interest expense during the quarter increased 1.7% in total year-over-year. Net fleet related interest increased by 12.5% reflecting higher interest rates primarily in Europe and higher average net fleet debt balances throughout the quarter. Net corporate interest expense declined by 15.3%, excluding the pre-IPO dividend loan due to lower net corporate debt balances and reduced borrowing margins in our bank financing as a result of re-pricing actions we took earlier in the year. At December 30, 2007, total debt outstanding was $13 billion consisting of $8 billion of fleet debt, $1.8 billion of debt secured by other assets and $3.2 billion in unsecured debt. Compared…

Thank Elyse, and based on our strong performance through September, we are forecasting full year 2007 results to be above or at the upper end of guidance provided earlier for revenue, adjusted pre-tax income, adjusted net income and adjusted EPS. With HERC revenue growth somewhat weaker than originally forecasted, we expect that worldwide car rental be stronger as we continue to execute our growth plan. We expect corporate EBITDA for the full year to be at the lower end of our guidance range primarily driven by the mix shift between HERC and rental cars. As you will recall while corporate EBITDA is important for our financial covenants, we believe adjusted pre-tax income and adjusted net income are more relevant to our profitability and performance. We’ll wait until the fourth quarter earning call to provide full year 2008 guidance. So, despite a challenging macroeconomic environment, Hertz performed exceptionally well this quarter and attempts focused on cost management and process improvement combined with our revenue initiative has driven the strong increase in profitability. I spoke earlier about our strong business line product and geographic diversification which differentiates Hertz from the competition. We’re the only company in the rental industry with two leading franchises. We participate in a variety of markets within each industry: on-airport and off-airport, industrial and construction. HERC and Rent-a-car operate globally with opportunity to expand in developing markets. Our unique business profile is a benefit during periods of economic growth and more challenging times. And now operator we will take questions.

(Operator instructions.) And our first question if from the line of Jeff Kessler with Lehman Brother, please go ahead. Jeff Kessler – Lehman Brothers: Thank you. With regard to your off-airport business, significant growth there relative to the company as a whole, the 22% number that you cited, was that relative to the US car rental business or international and if you could expand on what you intend to do on international, as well?

That is a US growth number Jeff, and outside the US, the off-airport business particularly insurance replacement is not a specialty business and we have been in it for year and years. So, there isn’t the separate focus on compensation plan, organization, and sales course that there is in the US market since it is a specialty market and we’re relatively new at it. Jeff Kessler – Lehman Brothers: Okay, well in any event then, focusing on the US market because again the 22% number was a bit above of what we expected and the profitability in that group is a little bit better than on-airport. I know you’re not giving out numbers for 2008 yet, but given the growth that you’ve seen in there, is it possible, we are going to see a 1/3, 2/3 type of mix off -airport and on-airport by the end of the year?

First of all Jeff, just to clarify, on-airport is not less profitable than off-airport. Remember, off-airport in fact a mature store, we’re just as profitable on airport but in the newer stores, it take anywhere from the year to 18 month for us to get the same profit margin that we have on airport. So, I just want to clarify that and you’re looking for a mix. We do not have, I guess what we have said in the past is that our off-airport market share should double within the next couple of years. That’s what we’ve maintained and we said that our share depending on how you calculate the overall market our share is around 10% expect to grow it about 20% and we do expect to continue to see double digit type of growth characteristics in the off-airport market going forward in the foreseeable future. Jeff Kessler – Lehman Brothers: Okay, same question, I realized that it is trying to shift a very large battleship, but obviously you’ve spent some money on investing in HERC changing the business mix there. Can you give us some idea of where that business mix is at now and where you see that business mix in six months?

Yes, I’ll let Gerry answer that, go ahead.

Sure Jeff, as you see from what we talked about segmentation wise, we’ve moved about two full percentage points from last year to this year on the industrial side to 18% over 16%. Over a six-month period, we did slightly better than that and certainly more significant than that over the next two to three years. Now, what we thing as we’ve talked about the mid 20s as far as an industrial mix going forward, but it’s something that takes a little bit of time, but we’re moving in the right direction. From a fleet mix standpoint, we’ve reduced our earthmoving fleet and increased our other industrial fleet, our earthmoving fleet is down in high single digits from last year. Our aerial and other is up over double digit in total fleet size from last year. So, from a fleet mix prospective, we’re making great strides and the actual customer segmentation is a longer process. Jeff Kessler – Lehman Brothers: And as you buy equipment in the aerial and industrial area, is the average age of that part of fleet getting younger versus an older mix in your earthmoving equipment?

That’s over time, the earthmoving will age a little bit than aerial just based on the simple fact that the growth element is the aerial so, you are buying a great quantity there, so certainly the math works that way, yes. Jeff Kessler – Lehman Brothers: Okay, final question on the auto rental side, your mix of business is obviously moving toward as we expected at risk and could you go a little bit further into where used car pricing or what we might call just the market pricing for automobile is, there maybe less economic activity, maybe less people buying cars, but on the other the auto manufacturers have been cutting back on their manufacturing to auto rental fleets, there must be some balance going on in there?

I’ll just say that we have no issues on getting capacity from the OEMs, none at all. I have not seen any issues there. We’ve said that before and you know Jeff, we’re just not seeing it. In terms of the residual values in the market place, they continue to hold up very well, they’re very stable. They haven’t gone down. I mean, they’re stable that’s the best way of saying it, I guess, and we don’t anticipate any deterioration. Joe, do you want to add to that?

So, the capacity is there and we have plans to expand our channels into more retail and more direct sales to dealers just to add additional capacity in the future. Jeff Kessler – Lehman Brothers: Yes, just for the sake of it, the American Leasing Guide is more positive on residual values holding up than Manheim, but Manheim doesn’t necessary take in your segment as focused, I think as American Leasing guide does, just my opinion.

That’s good. Thanks Jeff. We’ll have to move on now. Thank you.

And our next question from the line of Christ Agnew with Goldman Sachs, please go ahead. Christopher Agnew – Goldman Sachs:

First of all, we had an expansion margins at HERC, you know that right? It was in the press release, so our margins expanded. We don’t see that stopping. Chris, I don’t see that stopping, so just to correct that for a minute. In terms to the first part of your question, you kind of cut out when you’re saying it, can you start with the first part of your question again? Christopher Agnew – Goldman Sachs: Sure, I guess, so year-to-date you’ve had margins in both businesses expanding on a year-over-year basis?

Correct. Christopher Agnew – Goldman Sachs: And really I’m just trying to tie together your corporate EBITDA guidance which you’re saying will come in at the low end of guidance versus high end for revenues. And I said, I understand the mix of shift between RAC and HERC, but if we imply the same RAC EBITDA margins as last year in the fourth quarter which is I think were 10%. That implies that your HERC’s margins dropped, sequentially?

No they don’t. We didn’t give specific guidance in the fourth quarter. I’ll look at this question, I don’t have the analytics here that actually tell you that you’re back in the lower and of guidance, what that means. So I’ll do that, but we don’t see any margin contraction going on in either business in the fourth quarter, okay.

But we can work through the numbers.

But we’ll work through the numbers with you offline. Christopher Agnew – Goldman Sachs: Okay, okay, thanks. Maybe the next question on equipment rental business, can you comment on the trends that you saw on pricing through the quarter and maybe provide an update in the current trends and also can you give some color where you talked about a couple of businesses which you were seeing strong pricing. Can you comment on earthmoving?

Sure, the pricing trend, there continues to be pressure on the earthmoving side of the pricing segment where we’re seeing slightly lower pricing year-over-year in the third quarter versus second quarter in earthmoving, our low single digit negatives. Of the other segments of the industrial related business and the associated equipment types have slightly better pricing in the third quarter year-over-year, so we’re still seeing a little bit of pressure obviously from construction side and particularly the earthmoving segment within that customer segmentation. However, quarter-over-quarter, our pricing is up sequentially from the second to third quarter overall even though year-over-year we’re seeing some weakness on the earthmoving sides, so net trend has remained about the same-the weaker segments being earthmoving in the construction sector and strengthening and more positive on the aerial industrial type equipment and a little more weakening on the earth moving side of the third quarter versus the second quarter. Christopher Agnew – Goldman Sachs: Okay, great thanks. One quick follow up, can you comment on your expectation for fleet levels in the car rental business year-over-year, how much do you expect it to be up? Thanks.

Are you talking about for ’08? Christopher Agnew – Goldman Sachs: Sorry, for the fourth quarter. What level do you expect the fleet to be up year-over-year?

Yes, for the fourth quarter about 5% at the high range, or 3.5% to 5%. Christopher Agnew – Goldman Sachs: Okay, great. Thank you.

Thanks, Chris

And now our next question is from the line of Himanshu Patel with J.P. Morgan. Please go ahead. Himanshu Patel – J.P. Morgan: I have two questions. Maybe Gerry you could help us with this one. Could we get a little bit of sensitivity on the HERC business for next year, let’s say if revenues were to actually decline maybe in the 5% to 10% range if we’re going to a recession, what sort of margin impact would you sort of bucket that for the HERC operation?

First of all, we don’t even in our worst case nightmare don’t ever think that the HERC business will be down 5% to 10%. I want to make sure that’s clear because of the growth that’s being generated in the industry, and other markets, its offsetting any of the cyclical declines that we see in non-res construction. We don’t think there is a cyclical decline in non-res construction, we actually believe that we are still in the middle of a cycle, an upward cycle, so I just want to clarify that, but we have modelled obviously declines of let’s say, 5% to 10%, I’ll turn it over to you, Gerry.

Just another comment, Mark, our goals are geographical opportunities also on top of the industrial fleet mix are interesting and significant worldwide which offsets some of that also. But separately, there were that type of a decline, now we’ve modelled that out up to a 10% decline and we’re very confident that we would still see 40% plus EBITDA margins in this business, so if in fact we would have a decline of that magnitude, and that factors are essentially a more mature market with better operators less over fleet supply in this market today and is just a better shift, the continued shift ownership to rental driving that part of market, so we’ve modelled that out and we believe that we’re very comfortable with a 40% plus EBITDA margin, if it in fact dropped that significantly and that’s set at 10% decline. Himanshu Patel – J.P. Morgan: Okay, that’s helpful and then Mark, I wanted to go back to your comment earlier on the $15 billion purchasing bill. Can you give a little bit of granularity on that? How does that break down, and sort of how long does it take to get to the level of procurement cost savings that you guys are looking for?

Yes, when you look at that roughly, $9 billion of that would be cars that we actually purchase, probably $1.5 billion would be in the equipment rental area. It fluctuates every year differently depending on how much new we’re buying, it could be less that that, and then the rest of it would be of a variety things whether it is concessions, it could be leases, it could be a variety of other related products, auto parts, et cetera, but we have not traditionally, as you know centralized purchasing and we’ve been doing that all throughout 2007 and we have centralized close to almost $3 billion now purchasing, we’re actually now looking at national contracts, running things to all kinds of RFPs, doing online auctioning, et cetera. so, on that piece we think we have significant traction, and we’ll continue to gain momentum over the next 12 months. On looking at the fleet end of it, we haven’t really yet completed our professionalization of purchasing techniques that we use to negotiate with the OEMs and as well as the even disposal of those assets. We’re in the process of reengineering all that right now, I think there is a tremendous upside as we manage the fleet both in the time we buy it to the time we sell it, dispose of it, and that’s probably one of the single biggest opportunities the company has in terms of just reengineering that whole cycle. John Thomas I know is on board, he’s in the room with me right now but John, is there anything you want to add that at all.

I just think that tying in with our project genesis in all of the reengineering and kaizen around the whole fleet process and connecting the dots where we have opportunities.

So some of those opportunities are actually being harvested yet this year, some of them won’t be out throughout 2008. We’re using a lot of lean techniques on that process. We have broken it down into 10 different sustained buckets and so, anyways that the whole thing is the $15 billion was based on 2006 numbers. That number is growing as you can imagine as our revenues grow with it. Himanshu Patel – J.P. Morgan: Okay, great. Thank you.

Our next question is from the line, it is Cristina Lou with Morgan Stanley. Please go ahead. Cristina Lou – Morgan Stanley: Thanks. Earlier in the Q&A, you commented that HERC won’t be down 5% to 10% which was good to hear and it was also great to hear that you’re seeing the shift towards renting equipment versus owning it? I was wondering if you could comment and I know that you’re giving further guidance in January or February of next year, but if you’re expecting the HERC equipment rental business to be up year-over-year for 2008, and also what your expectation is for industry growth?

Yes, you’re asking for kind of guidance, Cristina, in terms of 2008 we’re going to announce what our guidance is on the earnings call, but as we look forward in the year, into 2008, our trajectory on the non-residential construction business has bottomed out, and I’m consistent in our saying that and we continue to see that, I mean, we haven’t seen any changes in that, and the growth that we have coming from industrial and other fragmented markets will accelerate, so we look at our visibility kind of going through 2008. We do see any change in that trajectory, and I think it’s fair to say that we’ll continue to have growth in the HERC segment. The question is going to be, is it 3%, is it going to be 8% growth, and that is the kind of the range that you can look at high end to the low end and that’s the visibility that we have right now. You know, I do not have a crystal ball so I am trying a give you of what the net is of all our information that we get and gather from both our customers as well as external resources. Cristina Lou – Morgan Stanley: That was extremely helpful. Thank you. And then one last question, you had mentioned in your prepared comments that the net promoter score that that’s going well and I think that the commentary was based on Europe. I was wondering if you could just provide a little bit more color on a full company basis how the net promoter score has been trending maybe commenting on the difference between the RAC side versus the HERC side.

Yes. Well, first of all, on the RAC side, it’s direct with the consumer, on the HERC side, it’s more business to business. On the Rent-a-car side, in the US and in Europe, it has gone up over the last 4 and ½ months. We track it everyday and we give weekly snapshots to the senior team reviews. We just had a snapshot look this week right before this call. And if you look at the five months of data and you trend it on trendline, it’s gone up so we’ve been very happy with that, and that fact that it has gone up inspite of some of the restructuring that we’ve done. We have a really intense focus on it and it’s going on both in Europe as well as in the US. And what happens is we have every airport, every location on this and we have a bottom 10 list and the top 10 list and we pat on the back of all the people on the top 10 and the bottom 10, we have weekly calls with the bottom 10 to get them up. So I would say a fairly intense focus on this and I have an objective at the Board of Director level, I had made a commitment to the board of directors that we would improve our overall NPS score this year inspite of any restructuring. So again, at the highest level in the company, we’re measuring this and staying focused on it and it is improving. Cristina Lou – Morgan Stanley: Right. And what about on the HERC side?

On the HERC side, Gerry’s business, he gets very high scores. You want to talk about it Gerry?

We really implemented this around the second quarter so we’re approaching 800 to 1000 in our responses right now, waiting for more complete data, but we’re averaging very, very scores, 70% plus, essentially, reflecting the 48% to 50% of our business being long-term relationship with large national account customers really is really reflected in that score, but we’re looking to get more data and get down to the lower levels of the customer base to get the bigger sampling size as we move forward.

But in Gerry’s business, he hasn’t had any deterioration in trend. His trend has actually been constant to maybe up marginally. Okay. Cristina Lou – Morgan Stanley: Great. Thanks so much.

And our next question is from the line of Jerome Nathan with Bank of America Securities. Please go ahead. Jerome Nathan – Bank of America Securities: Hi. Just a couple of questions, when I look at the average acquisition cost on the HERC side for rental equipment being up to 6% and 6.5% how should I compare that, I mean, I look at your pricing, it’s kind of flat. Does that imply negative pressures on your margins going forward? How do you offset that?

Yes, well what you’re saying is as we remix the fleet, we are buying industrial and aerial equipment to pursue that opportunity while we de-fleet in the earthmoving side because of the balancing effect. So in that process, we’re a little over fleeted in regards to that which is reflected in a slightly lower dollar utilization which we talked about in the call. So from that perspective, a little lower dollar utilization on the fleet, however our profit margins have improved into this customer segment change, cost cutting and other efforts to improve the margin. So as we balance that fleet, there’s a little bit of a dollar utilization decline but our profit margins have expanded inspite of that. Jerome Nathan – Bank of America Securities: Okay, bye. Thanks.

And our next question which is from the line of Rich Kwas with Wachovia. Please go ahead.

Good morning everyone. I had a question on earthmoving equipment. Gerry, you talked about the industrial, aerial and the other fragmented piece, I should say industrial aerial going up to below 20s as a percentage of revenue, I believe, is that all going to be taken out of the earthmoving side or some of that is going to be coming out of the fragmented piece as well?

Most of it’s coming out from the earthmoving side. We’re a company that always had a solid customer base for backhoes, big loadears, excavators, some of the mid to large-sized equipment, and that’s where the biggest impact is happening on new projects coming out of the ground where we have those larger pieces. They are not as active as six months to 12 months ago so so essentially most of the offset is in the larger earthmoving pieces being reduced and the aerial industrial increasing. Essentially, that’s the biggest offset.

And then in a stable environment, what are the relative margins in those three businesses?

Essentially, they are very similar on both the earthmoving and industrial side. You will get some slightly higher margin on the industrial side when you are on plant or on site at a refinery where you have lower fixed overhead charges, but the actual margins are pretty close on both sides of the business in a stable environment.

And that would include the fragmented piece as well?

Yes.

Okay and then Mark or Elyse, could you comment on the restructuring benefit year-over-year in terms of what, how much that helped margins this quarter versus last year.

I’m just stating what we’ve actually already announced, which is that we have $165 million that we’ve actually realized or completed in terms of restructuring initiatives in the US and in addition to that, you’ll notice on the call that Michel talked about $25 million roughly that he will have completed by the end of the year in this year, actually a run-rate, but with an additional $25 million or so that will end up coming probably leading into the first quarter as we complete our centers of expertise. So, when you look at the actual numbers themselves, you’d have to almost lay this out quarter by quarter, but we completed all of the $165 million in the second quarter and then the $25 million started also in Europe kind of mid-year and will be completed, the $25 million will be completed at the end of this year in Europe, so you kind of have to randomly take that over the next three to four quarters starting the second quarter of this year. Does that make sense?

Yes. So, you’re basically expecting a year of payback with these restructuring visions?

Correct.

Okay. Thanks so much.

Our next question from the line of Zafar Nazim with J.P. Morgan. Please go ahead.

I guess, Mark, if you could give us some of your thoughts on how we should expect free cash flow to be used this year and next year. Is debt being settled the number one priority for the company?

I would definitely say we will use the cash flow to pay down debt. Fourth quarter tends to be a strong cash flow period for us. We have a significant amount of bank debt which would likely be the first pieces of debt we’d pay off.

And then Elyse, just on free cash flow, how should we think about fleet equity as a source of cash in the fourth quarter? Is there a number we can use for modelling purposes?

I don’t have that at my fingertips, the forecast for the fourth quarter, we haven’t provided anything. Generally, it’s positive. It’s in big de-fleeting period. So, with respect to the fleet balances, it will come down, we will use that to pay off debt. The only caveat is that sometimes we’re required to maintain some cash balances for credit enhancement purposes.

Okay and just one question for Gerry. Gerry, you gave us some numbers on fleet capex in the fourth quarter. I was wondering if you can also give us an estimate for what you expect from disposals in the fourth quarter.

About $70 million of disposals in the fourth quarter.

Okay. Great! Thank you.

You are welcome.

Our next question from the line of Emily Shanks with Lehman Brothers. Please go ahead. Emily Shanks – Lehman Brothers: Hi. Good morning. Very nice quarter. I just have a couple of follow-up questions. The first one is around the inter-company loan between corporation and Inc. What is that for and is that new this quarter, I’m assuming?

That is money that was the result of the transaction that we did; the secondary which sits holding company level and we basically just don’t let that cash so that the holding company we actually lend it to the Hertz Corporation. Emily Shanks – Lehman Brothers: Okay.

That’s referring to the HGH. Emily Shanks – Lehman Brothers: Yes, exactly. That’s very helpful. And then, just around the corporate debt balance, it looks like it is up sequentially, I wanted to understand what was driving the corporate debt sequential increase?

The corporate debt balance from, what was it? Emily Shanks – Lehman Brothers: From Q2 to Q3. Looks like it’s up about $175 million.

Primarily just a growth from the fleet, the third quarter tends to be our big quarter with respect to the fleet. So, it’s always going to grow between the second and the third quarter. Emily Shanks – Lehman Brothers: Okay, so, it’s safe to assume that you finance that with drawings on your ABL?

No, we finance that through the ABS structure, but there’s an advance rate associated with that so there’s always a net equity portion that’s financing the corporate debt. Emily Shanks – Lehman Brothers: Okay. So, the net equity you recognize in the corporate debt line. I was just trying to look at the prior years, Q2 through Q3, it actually looked like corporate debt went down. So, I just wanted to make sure I understood the trend this year.

Well, there are a lot of variances when you look at just the quarter year-over-year. One of the differences has to do with the fact that we added some fleet debt at the very end of the third quarter of last year so it makes the comparison looks a little bit muddy. Emily Shanks – Lehman Brothers: Okay. Alright. That is it. Thanks!

Our next question from the line of James Solomon with JP Morgan. Please go ahead. James Solomon– J.P. Morgan: Good morning! I am not sure if this was covered this one question initially because I got cut off earlier. But, just in terms of Europe, I just wondered how the pricing is developing there. I see international is up 1.9% on rate per day, but Europe, in particular, I was wondering, and really, are you seeing an improving trend throughout the year? I know there’s been some mixed developments by country, and the second question I had was on the insurance replacement business. And I just wanted to see if I heard right earlier in the sense that you think the market there is more specialized in the US versus Europe in that segment and I just wondered if you are targeting the segment as aggressively in Europe as the US. Thanks!

Yes, and I’ll turn it over to Michel to answer some of these and let’s get some color as well. But, in general, I would tell you that pricing environment in Europe for the third quarter was relatively good. We felt pretty positive about it and again it was due to the fact that we had very nice demand, I think for a lot of people and we’re always able to price well and in good demand patterns typically. So, that was good. In the fourth quarter, we haven’t really talked about or forecasted where we are on pricing. We typically try to refrain from doing that because legally, that puts me in a big jeopardy, so I’m not going to talk about forecasting pricing environment in Europe in the fourth quarter. In terms of the other part of your question which dealt with off-airport, we have in the US a $10 billion off-airport market that we traditionally have ignored. We now have close to a billion dollars in revenue in that and have grown from 0% share to a 10% share over the last, let’s say, nine years or so, and now, we’re expecting to double that. Now, in Europe, we’ve always been in the off-airport market. It was not a market that we ever ignored. So, we managed it much differently in Europe because it’s something that’s always been a relative strength of ours. However, we stayed focused on it and we are still trying to grow that end of the business. Michel, would you like to throw any more color on that?

The pricing, I remember, 2.6% of an increase in the third quarter. One reason was indeed, demand was good and we’ve been able to yield pricing very well, I have to say, especially in countries like France, so that was good. Sometimes, a little bit of tension on top corporate account, it’s still competitive, but otherwise we’ve renewed a lot of accounts with increases like in the US, and on top of our top 2 or top 10 accounts exclusively on the worldwide basis with the price increase too. In terms of the off-airport, in Europe, 60% of the total market is off-airport, for us, it’s a bit more than 50% of our revenue. So as Mark said, we are already very well diversified. In countries like Germany, already 70% of our revenue is off-airport. The key segments, off-airport, vans and trucks account for about 25% of our total off-airport revenue and your question was I think in terms of the replacement business and without being too long, yes, we are focusing on that. In terms of replacement business that you see in the US, really, we find the same kind of segment, if you will, in the UK primarily and a little bit in Germany. In other countries, it’s a different route to market. It works primarily through roadside assistance companies where we have a leading share. I am not saying we’re at number one every time, but we are probably number one or two in each of the big, either using our roadside assistance companies. So, yes, we are focusing on those segments. It is different by country, where we have growth opportunities, clearly, is in the UK, which is more like the US model if you like, I hope that was what you were expecting. James Solomon– J.P. Morgan: Thanks, just a quick clarifier then, one of the advantages of the thing is that that market is less seasonal and so on and so forth. You can help improve the utilization on the fleet, but it is a generally a lower-priced segment, is it not?

It is a lower-priced segment even though you have several sub-segments. So, it is all about, we’re not looking after everything. I’d have to say at least in Europe. We are very conscious about yields and we look for the most profitable part of the replacement market, but you’re right. It’s a much longer length, lower price per day, but very good utilization. In total, when you look for total contribution spent, then, it’s quite good, I have to say and it compliments very well the rest. So, as long as it is not overly, how can I say, too heavy in the mix, it’s very good. It is all about balance and hence, there’s vans and trucks business to it. So, we have a kind of an ideal mix by location, if you like, between doing some business clients, leisure, and commercial. That’s the kind of model we’re following. James Solomon– J.P. Morgan: And finally, as a percentage of your revenues in Europe, that segment?

Oh, 46, 48%, is it not that, Michel?

Is that your question ? Off-airport? James Solomon– J.P. Morgan: No. Specifically, the insurance replacement business.

I think you would rather stick to the US airport mix. James Solomon – J.P. Morgan: So, because I thought you already gave it for the US, wasn’t it about 22% for the US?

Right. We did, but she’s saying that within off-airport is insurance replacement so, the off-airport business in Europe, Michel is what, roughly?

In terms of replacement within—

No, not insurance replacement. What is the total off-airport business?

At 50%.

Okay.

It could be between 45% and 55%, depending on seasonality. James Solomon– J.P. Morgan: Okay. Thanks a lot.

And our next question is from the line of Frank Jarman with Goldman Sachs. Please go ahead. Frank Jarman – Goldman Sachs: Thanks guys. Just a couple of quick questions. One, on the levered after tax free cash flow targets. You guys said last quarter that you were looking to generate about a billion dollars over the next three years. Do you still feel comfortable with that number after today’s results?

Yes. Frank Jarman – Goldman Sachs: Okay. I guess, secondly, separate question. Just in terms of used prices specifically for earthmoving equipment, how do you see those prices trending over the next year?

I will let Gerry answer that.

We’ve seen a pretty good stability on the used according to price. Some of the large items the tract machines are under slight pressure but overall, they’re retaining a pretty solid residual values and I think if you look at some of the worldwide used equipment supply data, you will see that it’s relatively moderate levels, in other words, compared to the last couple of years. So, we see that trend continuing into 2008. Frank Jarman – Goldman Sachs: The last question I had was specifically regarding your credit rating. Have you guys had any conversations with S&P or Moody’s on the credit rating and do you expect to get an upgrade at some point down the road?

We actually meet with the rating agencies twice a year. We are scheduled to meet with them in the fourth quarter and we are certainly going to be pushing for a rating increase. Frank Jarman– Goldman Sachs: Okay, thank you.

Our next question is from the line of Douglas Carson with Bank of America. Please go ahead. Douglas Carson – Bank of America: Thanks. Just a quick question on the earthmoving equipment, you said the end markets for used are holding up. What percentage of the used equipment is sold outside the US?

Percent of our used equipment or just worldwide? Douglas Carson – Bank of America: I would say your used equipment.

Our used equipment is a very small amount, mid to single digit, mid low to mid-single digit percentage of our total sales. Douglas Carson – Bank of America: During the last industry downturn, did that number increase dramatically, kind of sales outside the US?

Not so much. We did go to auction more and we sold wholesale to brokers. Ultimately, some of that fleet ended up outside of the US, but our network was really the auction and the wholesalers. Douglas Carson – Bank of America: Great! That is it for me. Thanks!

Thank you.

Our next question is from the line of Mike Millman with Soleil. Please go ahead.

Thank you. In the third quarter, on the car rental, particularly in the US, did you see the industry increase their fleeting as well and I guess, what does that suggest about the fourth quarter in terms of pricing?

I think the competitive fleet levels were about what we expected. We’ve said several times that there is no capacity issue in obtaining fleets and I believe our competitors probably saw some trends in early summer about how July and August were going to be and fleeted up for it. In terms of the fourth quarter pricing, we’re not going to forecast where we see it going but in terms of fleet capacity, this is a seasonal issue. We go through it every fourth quarter coming off of your peak summer travel season.

In general, for and again, this is just, in terms of how we see pricing in the fourth quarter, I cannot forecast but there are no surprises for us. We’re not seeing any issues on pricing that would surprise us one way or another. So, that’s a way for me to answer that without getting in the pricing discussions that lawyers would jump on me about. Okay? Michael Millman – Soleil-Millman Research Association: I guess, what I was looking at is given that non program car fleet has increased, companies in the industry are left with more cars in the slow periods and so I’m wondering if we’ll see a repeat of what we saw in the second quarter.

Well, for us, no. I would say no to this. The answer to your question, I’d say that’s probably no, but in terms of having a higher percent of risk cars, what Joe had mentioned in the call was that we sold roughly three times as many cars in one month than we did a year ago. We are having no issues de-fleeting. We can delete cars just as quickly now with the risk fleet as we could with a program fleet and I think it’s an important point because people have worried a little bit about that. We’ve developed all kinds of outlets, again, dealer, direct outlets, different types of online auctions through wholesalers. We’ve done a variety of things that have allowed us to increase our capacity of selling cars, so the issue of timing and de-fleeting has not become an issue for us and that was, I think something that people were worried about that’s why we gave the statistics in august. Joe, do you want to repeat those statistics?

Yes, 42,000 cars sold in the third quarter and that is 78% higher than what we’ve sold in the same quarter last year. The other thing to consider, there’s not an incremental car rental cars in the industry. These are the cars that had been managed and turned back to auctions by the OEMs. Those same units are now risk units being held by the Rent-a-car company being managed and sold into the same market. So, it is not a dramatic increase in the number of cars being offered to the end user. Michael Millman – Soleil-Millman Research Association: And another question, can you at least rank the margins for airport, leisure, corporate, and off-airport?

I think, Mike, that’s more detail than what we have typically given out. Michael Millman – Soleil-Millman Research Association: Okay. Can you talk about the premium price trends that you’re seeing on comparable rentals, green cars, cars compared to what you were getting in a past what the trends are?

Yes, I would say that we’re finding that our collections in general, on fun collection are increasing significantly year-over-year, green collection is increasing significantly year-over-year, and prestige is fairly up just marginally in terms of year-over-year. Prestige is a more mature collection if you will, we’ve had for years now and so that overall, the overall mix of premium cars has increased significantly so we’re seeing an increase in the overall mix if you will of our vehicles that we sell in what we call our collection format. Our collections typically give us anywhere from 5% to 50% higher RPD versus our normal cars that we sell outside of the collection. So, it just depends on which collection you’re talking about, but in general, it’s a margin improvement and an RPD improvement. Michael Millman – Soleil-Millman Research Association: Well, I guess my question was really, that is 5% to 50%. How is that compared in the past? Are you seeing better premiums going forward on a comparable car basis , are they stable or not stable?

Yes, RPD in general, revenue per day, let us just say a normal vehicle was up on a light comparison especially in the premium collection category. RPD, we’re seeing, generally speaking, up 7% to 8% on the collections in that neighbourhood. So, we’re seeing higher RPD levels on the collections. Does that answer your question? Mike Millman – Soleil-Millman Research Association: Right. Thank you very much!

Our next question, from the line of Jordan Hymowitz with Philadelphia Financial. Please go ahead. Jordan Hymowitz – Philadelphia Financial: Hi guys! Thanks for taking my question. On the 42,000 vehicles sold, what was the average gain per vehicle sold?

We would never give that information out because it would drive everyone crazy. Every single week, we buy 6000, 7000 cars a day. I don’t even know if we have that level detail or so. If we get it, we have to get out of the system. Jordan Hymowitz – Philadelphia Financial: But you give it in the Q.

What are we giving in the Q? The actual margin on? Jordan Hymowitz – Philadelphia Financial: The dollar amount of fee on your vehicles sold in the quarter.

On a worldwide basis? Jordan Hymowitz – Philadelphia Financial: Yes.

This is in the US. Jordan Hymowitz – Philadelphia Financial: Okay. Can I get the number either for the US basis then, if not for the worldwide basis? And what was the number of vehicles sold worldwide, then?

I do not have it.

Do you have it right now?

We’re looking for it.

Yes, I do.

We can follow up on the call right after if you would like. Do you want us to call you after the call? Jordan Hymowitz – Philadelphia Financial: That would be great and if we could just get that same, well, I have the number for last year, can we get the number of vehicles sold last year, we are 78% higher so, I can calculate that. So, it’d be great then if you’re disclosing the difference between US and worldwide vehicles. If we could just get the dollar amount of gain associated with these that would be very helpful.

We can talk after the call but it would be worldwide, and just to remind you that it gets mixed up with the depreciation expense which is really what you should be watching. Jordan Hymowitz – Philadelphia Financial: Great! But it’s netted out of the depreciation so that’s the key number. It is not whether or not you guys are selling more cars or less cars. It’s if you’re keeping a margin stable and I’m really glad that you are willing to disclose that information now because I think it will be a lot more helpful in analyzing.

We do, it’s easier for the management, we do look at that quarterly. We look at our depreciation rates and we adjust them periodically. So to be exact, we’ve made adjustments in the past. That number will vary. Jordan Hymowitz – Philadelphia Financial: Okay and also, last question. Do you have a CFO, CEO transition cost in the quarter? How long will that be going on for those charges?

Just this quarter.

We can get you back on that one. I don’t think we have an exact answer. Jordan Hymowitz – Philadelphia Financial: Well, you guys have been in charge there for a long time now, why would that charge still be going on?

The CFO just recently resigned. Jordan Hymowitz – Philadelphia Financial: Because of the CFO issue, I got it, I got it. Okay, thank you!

Our next question from the line of Jeff Kessler with Lehman Brothers. Please go ahead. Jeff Kessler – Lehman Brothers: Thank you for letting me have a follow up. Just a quick follow up on your fleet, the collateralization, where do you expect your fleet collateralization to go, overall fleet cost? You’ve given us some base numbers, if you could just go into a little more detail on fleet cost and collateralization expectations.

What do you mean, Jeff, by collateralization? Jeff Kessler – Lehman Brothers: Where your collateralization costs are going. On your ABS facility?

Okay. We’re not expecting any major change in the ABS structure. So, right now, the advance rates are approximately 80%. Jeff Kessler – Lehman Brothers: And you’re expecting no major changes there?

No major changes. Jeff Kessler – Lehman Brothers: Okay. That was what I was actually asking for. Thank you!

Our next question from the line of Christopher Agnew with Goldman Sachs. Please go ahead. Christopher Agnew – Goldman Sachs: Thanks for the follow up. I just wanted to come back to guidance. Given you had such a strong third quarter, what makes you cautious not to raise for your guidance, particularly for adjusted EPS?

Well, Chris, you know, I think we all want to be able to forecast with precision a fourth quarter, but unfortunately our visibility is such that we have to wait and see this business has got about a four week window and that’s been all the visibility we have. So, we always want to be conservative, we don’t want to over estimate what we’re going to perform, as you know the market hammers, any company that has probably traded who underperforms to forecast, right? So, I think that’s the best answer I can give you. I sure don’t want to come in and underperform, so, we said that we had a really good shot at beating the estimate or coming in at the upper end of the range. So, I thought that was a prudent thing to do, given our visibility of what’s happening in today’s environment. Christopher Agnew – Goldman Sachs: So, there’s nothing in your visibility that actually make you more cautious. You’re just being conservative.

No, it is just the macro environment that we’re all living under right now. Christopher Agnew – Goldman Sachs: Okay. Thank you.

Thank you.

And speakers, I’ll turn the meeting back to you.

Alright, okay operator, I guess at this point if you want to talk about the replay.

Thank you ladies and gentleman. This conference call will be made available for replay starting at 3:15 p.m. Eastern time today October 29th. The replay of the conference runs until the date of November 5th at midnight Eastern. You may access the AT&T teleconference replay system by dialling 1-800-475-6701, please enter the replay access code 884-004. International participant may dial 1-320-365-3844. And speakers back to you.

Alright, thanks everyone for attending the call. I look forward to announce our fourth quarter earning call coming up shortly. Thank you.

Thank you ladies and gentleman and that does conclude our conference call for today. I’d like to thank you for your participation and for using AT&T executive teleconference service. You may now disconnect.