Welcome to the Avis Budget Group third quarter earnings conference call. (Operator Instructions) At this time for opening remarks and introductions I would like to turn the call over to Mr. David Crowther, Vice President of Investor Relations.

Good morning everyone and thank you all for joining us. On the call with me are our Chairman and Chief Executive Officer, Ron Nelson, our President and Chief Operation Officer Bob Salerno, our Executive Vice President and Chief Financial Officer, David Wysher. If you did not receive a copy of our press release, it’s available on our website at avisbudgetgroup.com. Before we discuss our results for the quarter, I would like to remind everyone that the company will be making statements about its future results and expectations which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are based on current expectations and the current economic environment and are inherently subject to significant economic, competitive and other uncertainties and contingencies beyond the control of management. You should be cautioned that these statements are not guarantees of future performance. Actual results may differ materially from those express or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in our 10-K and in our earnings release issued last night. Also, certain non-GAAP financial measures will be discussed and these measures are reconciled to the GAAP numbers in our press release which is posted on our website. Now I’d like to turn the call over to Avis Budget Group’s Chairman and Chief Executive Officer, Rob Nelson.

Good morning to all of you. My comments this morning are going to focus on two subjects; first some of the strategy behind our third quarter results and second, some of the dynamics we’ve seen develop over the course of the year and expect to continue to see for the foreseeable future and what this may mean for us in 2010. I’m then going to finish up with a brief summary of some of the more important initiatives we have underway to evolve our business and enhance the car rental experience we offer our customers, which is arguably the equal if not more important dynamic for the future prosperity of our business. But first, the third quarter; for starters, I think the take away from our results is straightforward. Over the course of the quarter, we saw and seized an opportunity to aggressively trade off fleet and volume in favor of price with an overall profit positive impact. We’re clearly pleased with how this has driven our results. But let me be clear about what it means. One, market demand was by no means down by the 23% that our volume would suggest, but structurally it was down probably in the low teens, so if you compare the margin impact of the incremental loss of volume we incurred, let’s call it 10%, again for the 9% gain in price we posted, margin write offs are pretty compelling. Just to remind you, we model $0.90 of every dollar of price to follow the bottom line, whereas in the comparable number on $1.00 volume is $0.30. Two, to realize the desired benefits fleet had to be reduced and we were aided by a healthy used car market. Those sales did result in gains, but the majority of the gain was the result…

Good morning. On most of these calls I talk about how we tailor the fleet to the demand that was in the marketplace. This wasn’t the case during this quarter. We entered the quarter with a strategy of maximizing the pricing in the marketplace. To take advantage of this, we opted to run the fleet below where we thought demand might be. Additionally, as we got into the quarter, we found ourselves confronted with the unique car sales market that we also opted to take advantage of. All this led to our average domestic fleet being down 23% for the quarter. This strategy, which added de-fleeting in our domestic operations at higher than normal levels before and during the summer, had other benefits. It did help up achieve a 9% increase in price which was a few points higher than what we expected going into the quarter. We achieved this primarily by not having to find volume at discounted levels to soak up fleet. Another advantage was, by cycling out of vehicles earlier, and replacing these with less expensive 2010 models, we not only reduced costs but we also gained the benefit of a younger average fleet age. At less than seven months old, we believe our fleet is currently the youngest in the industry and we still have preserved the opportunity going forward to lengthen the age of the fleet which would provide us with some additional incremental cost savings. On our last call we were expecting modest per unit fleet cost increases in the third quarter and a decline in per unit cost in the fourth quarter. Our assumptions for the fourth quarter have not changed, but in executing the strategy I just talked about, we achieved a decline in per unit fleet costs this quarter, a full…

Good morning everyone. I would like to discuss our recent results and our financing activity. Starting with our results, excluding unusual items, in the third quarter revenue fell 14% to $1.5 billion. EBITDA was $165 million and our pre-tax income was $102 million. EBITDA increased 17% from $141 million we reported in third quarter 2008 and our EBITDA margin improved by three points to 11%. On a constant currency basis, all three of our operating segments reported growth in EBITDA this quarter which clearly reflected our company wide cost reduction efforts. At quarter end our total head count was down nearly 7,000 or nearly 23% compared to a year earlier. In our domestic segment, EBITDA increased 34% for the quarter due to higher pricing, lower fleet costs per vehicle and the effects of our cost saving initiatives partially offset by lower volume. Third quarter revenue decreased 16% reflecting a 23% decline in rental days and a 9% increase in time and mileage revenue per day primarily due to price increases for leisure rentals. We believe the increase in time and mileage rate is a testament to the car rental business model which has inventory flexibility that makes it quite different from the hospitality and airline industries. Our revenue per car increased 9% year over year as we maintained fleet utilization despite the rental day decline. As Ron mentioned, domestic ancillary revenues were up 13% on a per rental day basis in the third quarter as we began to lap our sales training initiatives. Direct operating expense decline 210 basis points as a percentage of domestic revenue despite the steep decline in volume as we continue to benefit from our cost saving initiatives and also had much better net gasoline costs compared to 2008. Excluding performance based incentive compensation expense; SG&A…

(Operator Instructions) Your first question comes from John Healy – North Coast Research. John Healy – North Coast Research: I wanted to ask a little about fleet heading into 2010. It seems that demand remains low and I was hoping you could provide a little bit of color regarding how you’re thinking about increasing the fleet and maybe your negotiations for buys going into 2010 and if we were to assume that volumes could grow 2% to 3% next year how you would move the fleet accordingly.

I think our strategy for managing the fleet will continue to be what we’ve done throughout 2009 and by that I mean, keeping the fleet very much in line with demand levels and in the process continuing to have utilization relatively constant on a year over year basis. John Healy – North Coast Research: So you do negotiate with the OEM’s, do you have more or less flexibility compared to 2009 to kind of change your fleet levels as you see demand come on?

We actually have quite a bit of flexibility going across next year. We’ve been very pleased with the negotiations we had with the OEM’s and we think there’s a potential for more cars if we want them and we think there’s a potential to move the fleet around as we need to across the year. So as I said, we feel very good about it. John Healy – North Coast Research: I might have missed this when you went through the prepared remarks, but did you mention what the gain on position of vehicles was during the quarter?

We didn’t but I can give that to you. In total our gains and losses on vehicles dispositions net of any disposition costs was a gain of $29 million and about 80% of that was in domestic car rental. The remainder was in international. John Healy – North Coast Research: A big picture question, I know you did the convert transaction, but as you look at having enough enhancement for 2010 time frame, as you elect 2011 and 2012 maturities, how do you feel about the liquidity that you have at the corporate level today? Do you think we’re in a scenario now where enhancement to fund growth in the fleet, is that cash or is that equity comes from what you’re able to generate in terms of the core business or do you see yourself maybe tapping the capital markets again in the future for any other types of transactions. I’m just trying to get your thoughts around how we should think about funding enhancements going forward.

I think the simple answer is we have all the liquidity we need for certainly this year and the markets continue to improve on a day by day basis. You saw how much Hertz’s offering improved from our first offering on the ABS market. So we actually think that we’re going to have more than ample ability to access the capital markets. I think that putting $350 million of junior capital in place was the right thing to do, but I think at this point in time it’s all we need to do. I think about the momentum we have coming out of the third quarter. Our fourth quarter without giving a forecast is going to be substantially better than it was last year. We’re positive about next year. Fleet costs are down and we’re going to annualize our expense reductions. With that kind of momentum we think, and given the fact that we don’t need any capital, we actually think we’re in really good shape. The world could change, but I don’t think that we have any concerns at this point in time about raising additional capital or even needing to put any additional capital into our capital structure.

Your next question comes from Emily Shanks – Barclays Capital. Emily Shanks – Barclays Capital: On your response to the second question that the prior caller asked, the gains are less in used car sales of $29 million. Is that 100% closer to EBITDA?

Yes it is. As Ron mentioned, in many ways the gains or losses that we recognize are really just another component of fleet costs and they show up in fleet costs in our numbers and in a nutshell, the reason we had gains in Q3 is that it turned out that the depreciation rates we had used and estimated in the first half of the year, particularly in the second quarter were a bit conservative in light of where things ended up. We really just view fleet costs more typically as all combined whether it’s depreciation or gain or loss. Emily Shanks – Barclays Capital: In your prepared remarks you had made the comment that, I want to make sure my number is right, that there was an incremental $750 million of additional collateral sitting at more than what was needed. Is that pro forma for all of the new conduit facility that’s in place as well as the ABS?

It’s not a pro forma number. It was the actual number, but that number doesn’t really change very much as a result of the other transactions that we’ve done. The conduit renewal has advance rates or enhancement requirements that are very similar to where it was and the other ABS transaction requires a little bit more collateral but again, it only represents about 4% or 5% of our aggregate fleet, so it doesn’t move the number significantly. Emily Shanks – Barclays Capital: And that incremental collateral in the form of fleet or equity?

Primarily in the form of fleet. Emily Shanks – Barclays Capital: Longer term as we look at this, because clearly you have a lot of LC’s that are posted to serve as collateral. Is the idea to eventually unwind that or what’s the plan around over collateralization over the next 12 months?

Generally speaking, we will continue to have over collateral or excess collateral in the form of fleet at all times during the year, and then during our seasonal peak or seasonal up fleeting, those are the times when we tend to use some additional letters of credit to support our borrowings. So there is a minimum LC requirement that’s always there and we use some additional LC’s when we’re at or near our peak. And that strategy I think we expect to continue.

Your next question comes from [Yoma Abebe – J. P. Morgan] [Yoma Abebe – J. P. Morgan]: Obviously you’re sitting on a lot of cash at the corporate level and as you go forward in terms of any use of cash from the balance sheet and then free cash flow, how do you think about use of cash as it relates to your capital structure on the corporate side?

We are going to be continuing to look at that, but I think our approach is going to be one of being conservative with respect to our liquidity and how we approach cash balances and uses of cash. So I think you should expect to see that we’ll continue to have a fairly decent cash balance and I don’t see us rushing to use that until it makes sense for us to continue to evolve and update the corporate maturities that we have.

Your next question comes from Michael Millman – Millman Research Associates. Michael Millman – Millman Research Associates: As you suggested is that at least Hertz seems to be focused a little bit more on utilization and price and does that present kind of a lid problem on pricing? Secondly, on depreciation, should we assume or are you assuming the current residuals going forward or are you somewhere between the past and the current? And then do you have any liability from [Realigy]?

Hertz is playing a different game. They’ve been focusing on utilization and I think the only time that you affect pricing in the market is when you really need your fleet and you have excess fleet and you need to soak up demand to put the fleet to work. We haven’t seen any problem in getting the pricing increases that we have even though obviously there is a big difference between us and Hertz in terms of realized price increases over the third quarter. Your second questions, related to residual values and the approach there is that no, we have not assumed that the strength of the used car market that existed in the third quarter would persist. Our depreciation rates assume that things will normalize a bit from the strength in Q3 and as a result we have not assumed that level of strength going forward as we set our depreciation rates.

Your third question related to [Realigy]. We continue to hold a letter of credit closed to $500 million through [Realigy] securing all of the liabilities that are contingent or otherwise that flow through our balance sheet for them. Michael Millman – Millman Research Associates: I guess the concern is if they have to declare bankruptcy.

Then we’ll call down on the letter of credit. Michael Millman – Millman Research Associates: And that would still be good?

Yes.

I guess with no other questions we’ll sign off and say thank you for joining the call and we look forward to talking to you at the end of the year.