Good morning, and welcome to the Avis Budget Group Third Quarter Earnings Conference Call. Today’s call is being recorded. 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. Please go ahead, sir.

Thank you. Good morning to everyone and thank you for joining us. On the call with me are Ron Nelson, our Chairman and Chief Executive Officer; and David Wyshner, our Executive Vice President and Chief Financial Officer. Before we discuss our results for the third 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 the current expectations and 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 earnings release which was issued last night and our second quarter Form 10-Q, and our Form 10-K, and in other SEC filings. If you did not receive a copy of our press release, it is available on our website at 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.

Thanks, Neal, and good morning to all of you. While many of the people listening to this call probably spend a lot of time dissecting every word regarding the Dollar Thrifty situation, our strong third quarter results clearly illustrate that for the 21,000 Avis Budget Group employees around the world, it has thankfully been business as usual. Amidst the challenge and distraction that a lengthy M&A process necessarily involves, the store was being minded. We continued our focus on driving growth, profitability, and margins. We continued our important work on improving the rental experience at every customer touch point, and we continued to diligently pursue cost-savings and productivity opportunities that still exist within our infrastructure. I do want to comment briefly on the Dollar Thrifty opportunity upfront so that we can then focus most of our time this morning on our business fundamentals. As you know, in July we submitted a bid to acquire Dollar Thrifty Automotive Group for $46.50 per share in cash and stock, and in September increased our offer to approximately $53 a share. On September 30th, Dollar Thrifty shareholders voted not to approve the proposed merger with Hertz, and Hertz subsequently terminated its merger agreement with Dollar Thrifty and withdrew its anti-trust application for the FTC. On October 5th, we and Dollar Thrifty announced that we had agreed to cooperate to pursue anti-trust clearance of our proposed acquisition of DTG. We also affirmed our commitment to pursue an acquisition of Dollar Thrifty on the previously announced terms. Dollar Thrifty represents a substantial growth opportunity for our company, and our offer represents a premium evaluation of the Dollar Thrifty shareholders. Beyond that, there isn’t much to report. We continue to diligently pursue the proposed transaction. We and Dollar Thrifty have provided the FTC with literally millions of…

Thanks Ron and good morning everyone. Today, I’d like to discuss our third quarter results, our fleet and our capitalization and liquidity as well as expand on some of Ron’s comments regarding our outlook. My comments will focus on our results excluding certain items. As Neal mentioned, these results are reconciled to our GAAP numbers in our press release. In the third quarter, revenue increased 3% to more than $1.5 billion. Adjusted EBITDA grew by 33% to $219 million and margin expanded over 300 basis points. Net income increased 41% to $97 million and diluted earnings per share increased 20% in $0.78. For the fourth consecutive quarter, all three of our operating segments reported double digit adjusted EBITDA growth. In our domestic car rental segment, our top line grew 2% reflecting a year over year increase in ancillary revenues. We kept most of last year’s increased pricing and also grew our rental volumes. Adjusted EBITDA was up $40 million for the quarter driven by higher revenue, ancillary revenue growth, the benefit of cost saving initiatives and a 7% decline in per unit vehicle cost. Fleet cost declined despite the fact that we recorded $23 million of car sale gains in the third quarter of 2009. The decline in fleet cost in 2010 was driven by lower cost per model year of 2010 vehicles as well as the stability of the used car market. International revenue grew 10% year over year driven by a 4% increase in pricing and 3% volume growth. Excluding the impact of foreign exchange, revenue grew 3%, pricing declined 2% and ancillary revenues were up 7% per rental day. Adjusted EBITDA grew 11% year over year with half of the increase being organic and half due to a favorable impact from foreign currency. Operationally, we benefited from…

Thank you. At this time, we are ready for the question-and-answer session. (Operator Instructions). Our first question; John Healy with North Coast Research, you may ask a question. John Healy – North Coast Research: Question about I guess 2011, as we move into 2012, Ron, if you see vehicle financing coming down pretty dramatically as we’ve seen over the last couple of months with some of the deals that you’ve done, how do you feel about the industry’s commitment to discipline and commitment to maintaining tight fleets? I mean if I think about your comments, a couple of things I think that I pulled out of there is financing is cheaper, the OEMs are looking to give you some attractive terms on program cars. Do you think the industry has really learned its lesson and will continue to remain as disciplined as we’ve seen over the last 12 months?

I don’t think much has changed, John. If you look at fleets over the course of the summer and frankly into September and October where people tend to be over fleeted, virtually everyone was posting LOR restrictions sometime during the course of the week, which tells me that everyone is rightsizing their fleet, and that’s really the key to sort of keeping pricing in sync. I think as volume comes back into the market, there’s probably going be a little jostling of price back and forth. But I think for the most part over the long run, as long as fleets continue to stay in sync with demand and pricing should be relatively stable. Maybe I’m an optimist about this, but I do think the last 24 months has changed the industry’s view of pricing in relation – I don’t see anything, frankly, in the last three months or nine months that would change that. John Healy – North Coast Research: Okay, great. And Ron, I thought you mentioned that you said the Budget business did a little bit better than the Avis business this quarter. Would there be any ways if you could kind of give us some color on how each of those businesses performed from a transaction based standpoint?

Yes, we really don’t get into individual volumes by brand, John, but I will say that over the course of the summer the Budget brand did perform a couple of hundred basis points better in terms of transaction volume. And actually days was probably a little more because Budget during the course of August and September was booking a lot of weekly business, really in the mid-teens in terms of a year-over-year gain. And I think that’s why you see the sort of the impact of pricing during the quarter as if we were getting a lot of weekly business. John Healy – North Coast Research: Okay, fair enough. And then, just kind of a housekeeping question, I might’ve missed it. But did you mention what you expected overall company vehicle depreciation expense to decline this year, not just the domestic piece, but what you expected for all the business units?

We don’t. I do think the trends that you’ve seen so far this year will be there on a full-year basis, though, driven on the truck side primarily by a decline in the average fleet there. John Healy – North Coast Research: Okay, thank you.

Our next question, Emily Shanks with Barclays Capital. You may ask your question. Emily Shanks – Barclays Capital: Hi, good morning. I had a question about the cash balance. Is any of that posted as collateral under the vehicle-related debt?

No, the cash balance is free and clear as of quarter-end. Sometimes during the quarter if we have a cash balance, we will use it to replace collateral as an interim use of cash that’ll save us some LC cost, but all of the $623 million of cash was free and clear and not posted as of September 30. Emily Shanks – Barclays Capital: Okay, great. And then in terms of the pricing, I know that you said that you’re up against difficult comps, but can you give us a little bit more color on how we should think about that particularly versus some of your competitors that posted positive pricing during the quarter?

Sure. I think it’s very important to look at the two-year pricing comps using 2008 as a starting point rather than just focusing on the year-over-year comps. And that’s why Ron highlighted the fact that on a two-year basis we were up five points, whereas others in the industry were sort of flat or down a bit. And so I do think the two-year numbers are a very useful way of looking at things in the context of where our pricing is going to go. As I mentioned last year, our pricing in Q4 was up 9% versus fourth quarter of 2008, and that means that we do again have a difficult pricing comparison coming up in the fourth quarter. Emily Shanks – Barclays Capital: Okay. And then my last question is just around the debt rates that you did subsequent to quarter-end. Is there a potential that you would come back to the debt markets to raise more funds for potential Dollar Thrifty acquisition or does that take care of it?

The Dollar Thrifty acquisition probably would require additional funding compared to the $400 million we’ve already raised, and we have not yet decided what form that would take. But we would need additional funding to complete the Dollar Thrifty transaction. Emily Shanks – Barclays Capital: Okay, so visiting the debt markets is still on the table then. Is that a fair assumption?

That would be fair. Emily Shanks – Barclays Capital: Okay, great. Thanks. Good luck.

Our next question, Chris Agnew with MKM Partners. You may ask your question. Chris Agnew – MKM Partners: Thank you. Good morning. First question, I wonder if you’d be willing to break out domestic pricing that you saw in the quarter month-by-month. And then can you repeat the comments you made – I just want to make sure I took them correctly – on the pricing in October. I think you mentioned a sort of improvement at the end of October over September. Thanks.

Yes, Chris, we’re not going to get in the month-by-month pricing. I think you’ve got the pricing for the quarter. And I think our comment was that the pricing trends that we saw in the third quarter and in September continued into October. And actually October got better as the month got longer, because as you know, October is traditionally a fairly strong month for us, because there’s both commercial and leisure volumes, and until fleets got tighter as the month went on and volumes grew. Chris Agnew – MKM Partners: And just – I mean did you say anything on November? I mean does that – the October trend, does that continue into November, December, or how do they differ from?

Well, it’s a little early for December. Just what we’re seeing, quite honestly, is commercial volume comes back into our mix, but the booking curve is pretty close in. And December is always kind of a screwy month, because of the Christmas holiday, and Thanksgiving, and more on all flow. So if I look at the res build right now, I think we’re seeing with maybe 8% or 10% of December reservations relative to last year in-house, so you really can’t draw any conclusions. But November, the res build in November which I think actually is pretty good at least up through the Thanksgiving period is strong as it continues the patterns from September and October. And the pricing actually seems to be holding and really continuing the third quarter trends in terms of year-over-year. Chris Agnew – MKM Partners: Okay, thanks. And then changing tack, can I ask about ancillary revenues? I know you had tough comp. I think last year you reported 13% growth at 2% this year. But I mean are we starting to see that max out on a day that you mention that you’re aggressively pursuing ancillary revenue growth. I mean can you just put a little bit of color around that, and what, and some examples of what the aggressive actions are? Thanks.

Well, I think part of it has to do to with the fact that, we started this initiative about 18 months ago and we went through the top 50 airports and did sales training, and then as we anniversaried the training issues, you don’t see the same kinds of increases that you did. We’re now moving in the markets 50 to 100. We have an initiative going on in the local markets to visit sales training. And the things – every product in the portfolio has a life cycle, and while GPS is starting to sort of even out, roadside safety net is growing pretty nicely, XM is going to grow pretty nicely as we rollout more units, and we’re always thinking about some new innovations and products that we can introduce. So I think the – until you see – until we come out with the another product that has the penetration potential as GPS’s, I don’t think we’re going to see the mid-teens kind of gains that we got last year. But we do think that we’re going to be able to continue to grow this particularly as we enhance the training smaller markets and –

Our next question, Neil Portus with Goldman Sachs. You may ask your question. Neil Portus – Goldman Sachs: Thanks. Good morning. You talked about not pursuing unprofitable business. I just want to ask how we should expect that to flow through the volume and pricing results in the coming quarters. This quarter, for example, volumes were up and pricing was down. Should that trend start to reverse somewhat going forward, given your increased focus on profitable business?

Neil, I think the really way to think about the focus on profitable volumes is a continuation of the discipline we put in place. A lot of the actions we took to step away from unprofitable transactions were taken in the 2009 timeframe. We’ve anniversaried substantially all of them. And as a result, we are expecting our volume trends to return back to being more aligned with the market. And I think that is actually what – which is on our third quarter numbers as well, as we have now anniversaried most of the actions to step away from unprofitable business. We continue to focus on this area though and refine our analyses, because I do think there are opportunities for us continue to prune it little bit, as well as to look at areas where we were perhaps too aggressive and ended up losing some profitable transactions when we stepped away from unprofitable transactions. And so as we become more and more knowledgeable and sophisticated in this space, we’ll have opportunities I think to step away from certain pieces of unprofitable business and grow our presence in more profitable areas. But I think net the two are going to have, shouldn’t have much of an impact on volume. But it is going to be continue to be an area strategic focus for us. Neil Portus – Goldman Sachs: Okay. And just one more. As you’ve increased your announced cost savings programs throughout the year, what are some of the operational areas where you’ve been able to sort of drive that increase, and is there more room to go and beyond what you guys have announced?

Let me work backward. I do think there are additional opportunities, and as we put together are 2011plans for performance excellence process improvement initiative, we’re actually excited about the opportunities that continue to exist. Most of our savings end up being tied to our field locations and I think that’s simply a factor of the math associated with that being where most of the costs are. And when we find ways to save money at a given airport or off airport location, we can replicate those savings hundreds of times over. The savings tends to be in the productivity and efficiency areas, particularly related to people and staffing, and how we utilize our folks, and that continues to be a big area of what we’re looking at, and particularly for how we move vehicles around both cars that need to be moved as well as items such as busing that we provide in certain airports. How we manage the efficiency and staffing levels for those sorts of activity has continued to be a key source of savings for us. But it really runs throughout our entire P&L and we continue to look for savings in the maintenance and damage areas which have been a big source of savings so far this year. But between staffing levels, and maintenance damage, and fleet maintenance, we see a significant amount of savings. Neil Portus – Goldman Sachs: Okay, great. Great, thank you.

Our next question, Chris Dougherty with Oppenheimer & Co. You may ask your question. Chris Dougherty – Oppenheimer & Co.: I just wanted to follow up a little bit on a non-T&M revenue. I think you answered a lot of it. But if I look at the international one, you’re actually down quarter-over-quarter. Is that seasonality or FX rates?

Just give us a second to look at something. And in international, excluding the impact of foreign exchange, as I mentioned, ancillary revenues were up 7% per rental day. The focus continues to be there across all three of our business segments. Domestic truck and international, on finding opportunities to grow international – grow ancillary revenues and to train our folks to be more effective at counter sales, sales, and sales through all of our reservation channels as well. And that as Ron mention will continue to be the case.

Yes, the big opportunity internationally, frankly is up sales. The penetration of insurance products is actually pretty good. If you look at the rental day of dollars that we generate from ancillary revenue internationally, it’s about 20% to 30% higher on average that is domestically, because of the insurance penetration. Where they don’t match the domestic achievement is in up sales. And so, we’ve put up particular focus this year on pushing the 3MDs of those big territories to focus on up sales and get their numbers up approximately in the domestic, so there is a good opportunity there. But again, it’s on a relative basis. It’s going to be about a third of the size of domestic just given the absolute size of the markets were. Chris Dougherty – Oppenheimer & Co.: And when you think about, I guess, the actual penetration, have you seen a shift in ancillary products from commercial account? Are there – I had heard that there were some restrictions in terms of what was allowed for some commercial account. So I was wondering whether that’s come back and if you’re willing to spend for the commercial side.

I don’t think we’ve seen any change frankly in commercial accounts willingness to purchase ancillaries. It’s either – for the most part, it’s either in their profile and it’s been approved by the travel manager (inaudible) it’s not, and I would say that’s really what drives the penetration rates in those accounts. But I haven’t seen a lot of changes in the commercial accounts willingness to the volume. Chris Dougherty – Oppenheimer & Co.: Okay, thank you.

We have time for one final question. Michael Millman with Millman Research Associates, you may ask your question. Michael Millman – Millman Research Associates: Thank you. I guess some related fleet questions. Maybe you could discuss the economics that you’re seeing in program versus risk, and do you think that you reach a different conclusion because of different mix possibly? And regarding fleet, just gives us what the year-over-year ending September 30th fleet was regarding fleet? And is fleet savings part of your cost savings numbers that you give us? Thank you.

The answer to the last question Mike is no. The savings on fleet are not part of the cost savings preview. I don’t know that anybody in the industry sees any difference in fleet costing. We look at the – it really comes down to a tolerance for risk and flexibility. I don’t think our mix is a lot different than – versus they actually have more leisure than we do. We tend to be a little more commercially oriented which tends to be more peaky. But more leisure would just suggest that you’re actually going to have more of a total fleet peak over the summer months, so the flexibility would be just as important to them as it is to us. But we’ve seen the pricing spread narrow between program and risk particularly in the model year ‘11 fleet prices. We actually went into the year thinking that we were going to up our risk car mix into the 60% or plus risk and balance program. But with the improvement in pricing, we just felt that there wasn’t enough incentive to give up the flexibility. So we essentially kept our risk in program next to same for most to the model year ‘11 – for all of the model year ‘11 buy that we’ve done this far. And then, lastly, with respect to the September fleet, it was – the fleet in September was generally consistent with the up 5% that we had for the quarter as a whole give or take a point of two.

For closing remarks, the call is being turned back over to Mr. Ronald Nelson. Please go ahead, sir.

Thanks, operator. And then, thanks to all of you for your support of the Avis Budget Group. We do feel very good about our business. Volume growth has returned, we’re holding most to last year’s pricing gains, we continue to find new opportunities for cost savings, and our model year ‘11 fleet costs look good. We’re focusing our efforts on improving our customer’s rental experience, building brand loyalty with our customer led service driven initiative, and we’ve bolstered our revenue generation and customer acquisition capabilities, assigning several significant co-marketing affiliations. As a result, we remain optimistic about where we’re headed. David, Neal and I will be presenting at a number of investor conferences this month, we hope to see you there. We also look forward to speaking with you in February about our fourth quarter progress in 2011 initiatives. Thanks again and we’ll talk to you soon.

This concludes today’s conference. You may disconnect.