(Operator Instructions) Welcome to the Avis Budget Group First Quarter Earnings Conference Call. At this time for opening remarks and introductions, I would like to turn the conference over to Mr. Neal Goldner, Vice President of Investor Relations.

On the call with me are Ron Nelson our Chairman and Chief Executive Officer, Bob Salerno our President and Chief Operating Officer, and David Wyshner our Executive Vice President and Chief Financial Officer. Before we discuss our results of the first quarter, I would like to remind everyone that the company will be making statements about 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 in the current economic environment and are inherently subject to 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 expressed 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 Form 10-K, and in our earnings release which was issued last night. If you did not receive a copy of the press release it is available on our website at www.AvisBudgetGroup.com. Also, certain non-GAAP financial measures will be discussed in this call and these measures are reconciled to the GAAP numbers in our press release. Now I'd like to turn the call over to Avis Budget Group's Chairman and Chief Executive Officer Ron Nelson.

Before we discuss our first quarter results and our outlook I want to comment briefly on the letter we sent to Dollar Thrifty regarding its definitive agreement to be acquired by Hertz for $41 a share which only $34 is being funded by Hertz itself. As stated in our press release issued yesterday morning, we have on several occasions in the past expressed interest in acquiring Dollar Thrifty. However, at no stage over the last several months did Dollar Thrifty or its financial advisors engage us in substantive discussions about a transaction or offer to provide us with information so that we might submit a bid. Given our belief that an Avis Budget Dollar Thrift combination would be highly complementary and synergistic we have requested access to legal, financial, and business due diligence information relating to Dollar Thrifty including access to management so that we can formulate and submit a substantially higher offer. We are confident in our ability to structure and finance a transaction that would be mutually beneficially to our shareholders and Dollar Thrifty shareholders, particularly if the excessive provisions in the merger agreement are eliminated. From an anti-trust perspective, Avis Budget is comparable to Hertz and we don’t see any barriers that would prevent us from completing a transaction on a comparable time table to Hertz. We’ve studied a potential transaction carefully and we would not have gone public with this announcement unless we thought we could get it done. Accordingly, we look forward to the opportunity to engage in productive discussions with Dollar Thrifty’s Board of Directors to allow its shareholders the opportunity they deserve to realize the full value of their investments in Dollar Thrifty. With that being said the purpose of today’s call to discuss our financial results. We do not intend to comment…

Before we discuss our first quarter results and our outlook I want to comment briefly on the letter we sent to Dollar Thrifty regarding its definitive agreement to be acquired by Hertz for $41 a share which only $34 is being funded by Hertz itself. As stated in our press release issued yesterday morning, we have on several occasions in the past expressed interest in acquiring Dollar Thrifty. However, at no stage over the last several months did Dollar Thrifty or its financial advisors engage us in substantive discussions about a transaction or offer to provide us with information so that we might submit a bid. Given our belief that an Avis Budget Dollar Thrift combination would be highly complementary and synergistic we have requested access to legal, financial, and business due diligence information relating to Dollar Thrifty including access to management so that we can formulate and submit a substantially higher offer. We are confident in our ability to structure and finance a transaction that would be mutually beneficially to our shareholders and Dollar Thrifty shareholders, particularly if the excessive provisions in the merger agreement are eliminated. From an anti-trust perspective, Avis Budget is comparable to Hertz and we don’t see any barriers that would prevent us from completing a transaction on a comparable time table to Hertz. We’ve studied a potential transaction carefully and we would not have gone public with this announcement unless we thought we could get it done. Accordingly, we look forward to the opportunity to engage in productive discussions with Dollar Thrifty’s Board of Directors to allow its shareholders the opportunity they deserve to realize the full value of their investments in Dollar Thrifty. With that being said the purpose of today’s call to discuss our financial results. We do not intend to comment…

My comments this morning will focus on our results excluding unusual items. As Neal mentioned, these results are reconciled to our GAAP numbers in our press release. In the first quarter, revenue decreased 3% to $1.2 billion, EBITDA grew by $42 million to $39 million and pre-tax income in this seasonally slow quarter was -$25 million. All three of our operating segments reported significant growth in EBITDA which reflects our companywide cost reduction efforts with EBITDA margins in each segment not only higher than last year’s first quarter but compared to the 2008 first quarter as well. First quarter revenue declined 8% in our domestic car rental segment, reflecting a 13% drop in rental days and 3% growth in average daily rate. Commercial rates were up 2% year over year and leisure rates were up 4%. Notably, average daily rate was up 6% compared to the first quarter 2008. Domestic EBITDA increased $23 million for the quarter due to higher pricing, 12% growth in ancillary revenues on a per rental day basis, a 10% decline in pre-init depreciation costs and the benefit of cost saving initiatives, partially offset by lower volume. Domestic depreciation declines were driven by lower expense for model year 2010 vehicles and a strong used car market. International revenue grew 23% year over year driven by a 36% increase in average daily rate partially offset by a 10% decline in rental days. Excluding the impact of foreign exchange pricing was up 8% and ancillary revenues increased 2% per rental day. EBITDA grew year over year primarily due to stronger pricing, a favorable impact from foreign currency, and a 2% decline in pre-init depreciation costs on a constant currency basis, partially offset by lower rental days. Excluding the impact of foreign exchange, EBITDA increased by $3.6 million. Revenue…

(Operator Instructions) Your first question comes from Chris Agnew – MKM Partners Chris Agnew – MKM Partners: Is it possible to frame what normal demand looks like through 2Q and third quarter? When are the peak demand periods and how do leisure and commercial volumes vary through the quarters?

I think it’s a little hard because of the way our volume numbers aren’t going to be indicative of really where the market is just because of what we’ve been talking about and pulling away transactions. The way we gain our view on it is to look at the airport share data which comes out which is usually on about a two month lag. What I can tell you is that the volume trends continue to improve through the second quarter, particularly on the corporate side. Enplanements are not roughly flat so that’s a pretty good leading or coincident indicator. As we look at the res build things are improving in both counts but certainly faster in commercial than leisure. Chris Agnew – MKM Partners: I guess I meant, I suppose there hasn’t been normal for quite a few years. Would one expect as you go through the second quarter volumes to build, April, May, June is that the normal seasonal pattern in any particular year?

Yes, we’re not going to project volume but I think the typical seasonal pattern is not unlike the build in January, February, March; it does build April, May, and June. Chris Agnew – MKM Partners: On fleet costs, your competitors run much higher risk mix and you outlined really your view that residual values will remain strong for several years and how you’ve opportunities to sell more online. I was wondering why you’re not looking to increase your risk mix more and drive down fleet costs?

I’m not sure that we’ve fully said that we’re not going to increase our risk mix but I do think that as we see the costs gap narrow between program and risk you have to assess the flexibility trade off and the risk in our business. You shouldn’t take away from here that we’re not increasing our risk percentage, only that the cost gap is narrowing and so you need to think a little harder about what you’re willing to pay for flexibility. Chris Agnew – MKM Partners: Can I ask for some background on the acquisition of Budget and what were the synergies you achieved and maybe how long it took you to achieve them and what were the revenues and market share when you acquired Budget?

We appreciate your going back in time and wonder why you’re doing that but happy to talk about the acquisition of Budget. We took north of $100 million of costs out of the Budget infrastructure, virtually all of those costs were out within about a 16 month period, and a lot of costs were out within the first six to eight months. Moving Budget over to operate on the wizard system that Avis operates on was the piece that took the longest and that was an important part of the remainder of the synergies but that was done within about 14 to 16 months, and that as I said was the last piece. Clearly we do believe as a result of that experience that we have taken a significant amount of costs out of Budget as we integrated that brand into our operations.

Your next question comes from John Healy – Northcoast Research John Healy – Northcoast Research: I wanted to follow up on Chris’ question about the Budget acquisition. When you identified the $100 million in costs savings you took out, could you maybe give us a little bit of color on maybe where the buckets came from, maybe how much was fleet, how much was IT systems, how much was consolidating operations or consolidating marketing spend. Trying to get a little bit of color in terms of where the real pressure points are in these types of acquisitions.

I think we’re sort of trending into an area we don’t really want to go. While I appreciate your question, the fact remains that it was over $100 million in total and actually as we went through our latest cost reduction programs over the last couple of years it’s probably well over $150 million now. It is reflected in the P&L. John Healy – Northcoast Research: It seems like for the most part people in the industry believe that this summer will be a tight fleeted summer and I think if you go back to last year everyone described it as tight, even summers before that everyone sometimes often described the summer timeframe as tight in terms of fleet and demand. Could you talk about just how you feel, what the new normalcy is for tightness in the summer timeframe, if you look at the industry for this upcoming summer do you expect the industry be as tight as it was last year and with last year maybe an anomaly and how tight you think fleet will be to demand longer term.

Let me talk about us. Last year we certainly were very tight and that is exactly how we wanted to run it, as we’ve talked on this call, we did take out a lot of business we thought just didn’t make profit for us. We reduced our fleet by a lot and I think it really paid off for us not only in the profits we garnered throughout the summer quarter, the third quarter, but also in the change in fleet posture in the fourth quarter where you’re normally fighting to bring the fleet down, we didn’t have to do that. This year we’re going to fleet as Ron mentioned and David mentioned, a little bit heavier than we are today but we’re certainly not looking for huge increases in the fleet for ourselves. As far as what everybody else is going to do this summer, I don’t know. With more risk cars in the industry, one of the other questions was about; when you do that you really do limit the amount of peak you can put into the peak because you just can’t get down off of it as easy as with a repurchased unit. John Healy – Northcoast Research: I was hoping you could talk a little bit about maybe the pricing trends that maybe you experienced in the first quarter, maybe how those trended on a monthly basis and maybe some of the trends you’ve seen here in the month of April.

As we mentioned during the prepared remarks, we did see improvement month by month over the course of the first quarter, particularly on the commercial side. I think Ron mentioned commercial volume was down 13% in January, 11% in February and less than 4% in March. While there is a little bit of noise in April due to Easter, generally speaking the trends we’ve seen in the first quarter have continued. John Healy – Northcoast Research: Was that volume, I was hoping to get a little color on how pricing trended.

That was volume that David was speaking about. I think generally you can assume that the pricing followed the inverse trend that was stronger in January and was less strong as volume improved in March.

Clearly part of that was due to the movement of the comps year over year as well which as we’ve talked about do get tougher as we move into the year, particularly in light of some of the pricing increases we saw in February and March of last year.

Your next question comes from Jordan Hymowitz – Philadelphia Financial Jordan Hymowitz – Philadelphia Financial: When you did Budget, was Budget’s share 14% do I remember that right?

I actually wasn’t here so I don’t remember what Budget’s share was, I’ll defer to my colleagues. Bob is saying that it was probably somewhere in the low double digits maybe 10% to 12%. Jordan Hymowitz – Philadelphia Financial: So it’s about the same size of the market as Dollar Thrifty was today, obviously the market was a little smaller then.

Once again, we’re not simply going to comment on anything related to Dollar Thrifty, you should ask them what their share is. Jordan Hymowitz – Philadelphia Financial: In terms of the pricing, was there some benefit or negative in March versus last year because of Easter happened in March this year and not last year, in other words, would March necessarily be stronger in April, weaker because of where Easter falls on the calendar?

Certainly there’s a little bit of noise. Easter did move one week this year, in the scheme of things I don’t think it’s significant. We had some weather in February and we had the Toyota recall issue as well. There are always a few things that anomalously impact the numbers a little bit but I don’t think any of them were terribly significant. Jordan Hymowitz – Philadelphia Financial: When I look at the merger agreement it seems like the Board has to at least consider your opinion if you approach them. In other words they can’t just reject it without consideration, is that how you read this proposal, section 503b I’m looking at?

I think you know the answer to that question is going to be no comment.

Your next question comes from Steve O’Hara – Sidoti & Company Steve O’Hara – Sidoti & Company: I was hoping you could give a little more color on the advanced booking and cancellation policy. How many markets do you anticipate rolling that out to and what’s the reception been in those markets and competitively is it being accepted by competitors and rolled through them as well?

We’ve only done this in a few markets and we’ve done it around holiday periods and on certain vehicles. Primarily it’s been to make sure that the systems and procedures were in effect and that we were able to execute on it. It’s hard to generalize; I don’t know whether the competition followed in those markets. Our commercial accounts that have encountered it actually have accepted it. As far as we can tell in the markets where we have implemented it we haven’t lost any rentals. We think that the people’s consumer behavior will probably adapt. We’re going to be judicious about how we roll it out. Steve O’Hara – Sidoti & Company: It would be more of a peak type thing and more with business. Would it be more advantageous for a company that runs a risk base fleet or a program fleet would you think?

I think initially we’re going to roll it out judiciously and that’s the roll out. Whether it’s more advantageous, I think at the end of the day it allows you to optimize your fleet so whatever mix of fleets you have its going to optimize that mix to best possible utilization.

Your next question comes from Emily Shanks – Barclays Capital Emily Shanks – Barclays Capital: I wanted to ask a follow up around the volume. What I’m hearing is that we shouldn’t be looking to the industry trends because you’re giving up the transient days; hopefully I’ve got that correct. My follow up question if that’s the case is in the past quarter you indicated that you though both you were giving up transient volume but the fleet was modestly too tight given the sell through that you had done on the vehicles. Is that portion of it over; are you happy with your fleet levels at these levels versus where volume trends are?

I think we’re generally happy with our fleet levels. I said we’re going to judiciously expand the fleet over the course of the second quarter and into the summer and don’t forget we in fleet and de fleet a fair number of cars every month so to the extent that volume proves to be higher than our forecasts we can actually hold cars. Our average age of our fleet right now is just a little under seven months. Extending the life of the fleet isn’t going to be an issue for us. Emily Shanks – Barclays Capital: You don’t think that you lost volume in the first quarter because your fleet was too tight?

We probably did. There are always turndowns but it’s generally on a market by market basis. I don’t think you can look nationally and predict those trends. Certainly in some markets we’re not going to be precise all the time. Emily Shanks – Barclays Capital: Around the $1 million of restructuring charges in domestic rental what does that relate to?

The $1 million of restructuring charges relates to some positions we moved to the Northeast to some lower cost areas. Its severance related to those positions that should produce savings over the coming years as we move them to a lower cost location in the US.

Your last question comes from Michael Millman – Millman Research Associates Michael Millman – Millman Research Associates: In talking about fleet, can you talk about where you think the industry is, in particular the OEM seem to put a lot of cars into fleet in the first quarter?

I suspect that we’re probably a little tighter fleeted in the first quarter than most of our other competitors just given the mix of our business and the fact that our price was modestly higher. It’s hard to judge anything from the first quarter because of the Toyota recall. Everybody had a lot of cars in and out of the fleet in February for services. As you know well, you can’t be too swayed by the OEM comps because people were putting off fleet orders pretty significantly last year in the first quarter. They’re a little misleading as to what they say about the size of car rental fleets. Michael Millman – Millman Research Associates: Can you talk about how much the GAAP; quantify the difference in your monthly depreciation between the program and risk cars currently and where it had been historically?

As you know, on a complete apple to apples basis the program car is more expensive often in the 5% to 10% range. There’s a real challenge in looking at that comp on an apples to apples basis since we tend to like to take larger cars and new model introductions, SUVs and luxury cars on a program basis because those have more residual risk associated with them. There are also timing issues where later in the model year we prefer to take cars on a program basis and as a result it makes it very difficult to do that apple to apples comparison. By the time you get to April and May and June we’re taking cars they’re going to be last year’s model year into two or three or four months. As a result, since we do want to take cars at that point in time we do think it’s important to be able to have program capacity to minimize our residual risk and to be able to meet the peak. It really is a very difficult thing to look at solely based on the depreciation rates. Michael Millman – Millman Research Associates: On depreciation rates, can you give us some idea of how you come to your charges, do you run it off a particular Manheim number or do you do some other method to forecast your depreciation?

We build our depreciation rates by make and model based on obviously in talking here about risk cars we do it by make and model based on our own experience typically with either that model in the prior year as well as what we’re seeing in the auctions for the current year. We revise those on a regular basis over the course of the year to reflect changes in the used car market and what we’re seeing in how cars are performing. That’s a regular ongoing part of how we assess depreciation. Michael Millman – Millman Research Associates: To be more specific in benchmarking it do you assume rates pricing off 118 or 119 make sense or are you pricing off more like 110 or 111.

There’s not an explicit link between the Manheim index and our numbers. The Manheim index has a fairly different mix of vehicles than we have. Obviously it’s comprised not only of late model vehicles but also significantly older vehicles. As a result, our risk vehicles tend to be very focused in the small and midsized late model area and as a result we look specifically at those markets and at the performance of our vehicles at auction rather than tying our depreciation to where the Manheim index happens to be or may be forecasted to be.

For closing remarks the call is being turned back over to Mr. Ron Nelson.

I would like to thank all of you for joining us today and we look forward to talking to you at the end of the second quarter and giving you an update on how the third quarter is progressing at that time. Thanks very much.

This concludes today’s conference. You may disconnect.