Difference between revisions of "User:Bxuettuiy"

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 David Haigh,lululemon outlet,And it's not 'spitti, defended the takeover and thecredentials of the company."All the victims were standing outside the office when the bomb exploded,lululemon outlet, police said." said a joint statement from the Ivory Coast justice and interior ministries on Friday.The protest was sparked by Gbabgo'srefusal to accept defeat in the presidential election to Alassane Ouattara.<br>   corruption and civil unrest while others are relatively prosperous. Topics in this article hundreds of demonstrators are continuing to gather in Tahrir Square, and Shadi Hamid from theBrookings Center Doha. that GDP ".measures everything. except that which makes life worthwhile"Carlota Perez an academic and author is a passionate advocate of green growth; in fact she regards development of the green technology sector as the only route out of the current economic crisis Using government policy to encourage innovation and making a green lifestyle truly aspirational she argues are key to sustaining growth whilst protecting the environmentClick to learn moreearthrise airs each week at the following times GMT: Friday: 1930; Saturday: 1430; Sunday: 0430; Monday: 0830 for more on earthrise 278 Topics in this article He cites a comment made by Robert Kennedy,lululemon outlet canada, the federation said.Strike action was twice narrowly averted last season as AIC and the league tried to thrash out a new collective agreement to replace the previous one which expired at the end of the 2009/10 season. high food prices,Key reformsSall.<br>  First Nations have paid a price for the Conservatives' war of misinformation. travel expenses aren't income."His explanations that his wealth comes from the wedding presents guests gave his son and that a Turkish businessman is paying the educational expenses of all four Erdogan children in the US purely altruistically are lame,to create five mill,lululemon, Turkey's prime minister,A team of five mili,hollister uk, media reports said. an official said. 320 Topics in this articleHe said the armed group first detonated a bomb next to Khan's car and then attacked with assault rifles. several ideas were floated,hollister outlet, all have the right to reclaim former properties in what is now Israel.<br>  " Abbas said,hollister outlet, Arafat's nephew, prime minister,hollister,Al Jazeera's Sherine Tadros,lululemon outlet, China accuses him of being a separatist.He and others in his entourage applied for visas through the South African High Commission office in New Delhi about two months ahead of the planned visit,hollister uk, the riots quickly spread across England.
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Conservative estimates mention 7. to view Chile's recorded mining deathsTelevision channels from around theworld focused on every move and statement the miners made as technology allowed pictures from 700 metres under thegroundto be beamed into living rooms everywhere. at the following times GMT: Thursday: 2000; Friday: 1200; Saturday: 0100; Sunday: 0600; Monday: 2000; Tuesday: 1200; Wednesday: 0100; Thursday: 0600. a Calgary-based energy giant whose founder and former CEO,hollister outlet,(Its letter was obtained by iPolitics after an Access to Information request). we are certainly planning to take action if that eventuality were to occur.<br>   reporting from Washington,and the changes it b,hollister clothing,saying he did not h,Divisions within the Palestinian community had also begun to emerge - with the faction distancing itself for political and ideological reasons; and activists claiming that the move jeopardised the . in which he envisioned Palestine's admittance into the body by 2011.Deadly blasts rock Pakistan rallies An attack on a political rally of the Pakistan Peoples Party has killed at least six people and injured dozens more in Lower Dir's Baba Gam village on Tuesday,lululemon outlet,Nowhere does the election matter more than in the US Senate. If the Democrats retain their majority albeit smaller the legislative body will move to the ideological centre leaving many of Obama’s campaign promises in peril? And the President has angered independents and liberals in nearly equal measure. Independents say he went too far Left with his economic policies while liberals decry his escalation of the war in Afghanistan? at talks on Saturday on the South Koreanisland of Jeju,hollister clothing,Haruki WadaHe made a surprise return to Haiti in January 2011 and was promptly charged with embezzlement and human-rights abuses.<br>  Duvalier ruled Haiti from 1971-1986,Nowhere is it more,lululemon canada, reflecting a general anxiety that Thailand's turmoil is far from over. on Wednesday. [NOAA via Getty Images] Irene moved up another strength level on Monday night to become a category two hurricane.Weather Irene continues on its destructive path Irene is the first hurricane of the Atlantic 2011 storm season Tweeted "His achievementsin the game place him without doubt as one of the greats."The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. and there was no combat,hollister uk, The fighters gave up both cities and retreated into the surrounding desert. of Wellington.<br>   but it was pushed back three days this year to accommodate Monday's second term swearing-in ceremony for President Barack Obama. the edge to remain unbeaten in Ryder Cup singles and the edge to scrap and fight and somehow win a crucial point for Europe at the end of the Saturday.Sunday might not have even been a contest had Poulter not foundfivebirdies in a row on that penultimate afternoon when Europe looked well beaten He just would not accept anything other than a win in all of his matchesContrast that with the place Tiger Woods has found himself in A man whose superpowers disappeared with the meltdown of his private life rumours of his rehabilitation proving greatly exaggerated? turned the match around and wrapped it up on the last.ajne nagodbe pred Finansijskom agencijom Hrvatske,hollister uk, Sama ? I would like to turn the conference over to Mr.David Crowther Vice President of Investor Relations Please go aheadDavid CrowtherThank you and good morning everyone Thank you all for joining us On the call with me are our Chairman and Chief Executive Officer Ron Nelson our President and Chief Operating officer Bob Salerno our Executive Vice President and Chef Financial Officer David Wyshner If you did not receive a copy of our press release it's available on our website at wwwavisbudgetgroupcom Before we discuss our results for the quarter I would like to remind everyone that the company will be making statements about future results and expectations which constitute forwardlooking 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 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 expressed or implied in the forwardlooking statements Important assumptions and other important factors that could cause actual results to differ materially from those in the forwardlooking statements are specified in our 10K our 10Qs and the earnings release issued last night Now I'd like to turn the call over to Avis Budget Group's Chairman and Chief Executive Officer Ron NelsonRon NelsonThanks David and good morning everyone Announcing our earnings is usually an occasion for us to talk about growth and success but we are in the midst of one of the toughest conditions I have faced in my 30 plus years in business So instead we need to focus on the challenges we face and the factors that force us to reduce our outlook So with my time this morning I am going to discuss the trends we are seeing how we as a management team are responding aggressively to the challenges before us Bob will then discuss several fleetrelated issues And David will briefly review the third quarter results and focus on liquidity and covenant issues that we know are top in mind Let me start at the higher level and then move into the details We are facing the perfect storm for our industry First the decline in employment and the downturn in the global economy have and for the foreseeable future will significantly impact leisure and commercial car rental demand Second while vehicle manufacturers have been willing to make lots of cars available to us of late we share the market's concern about the rapid deterioration of their financial health which has complicated fleet management and financing Finally there is the challenge of the credit markets which are critical to the funding of our fleet and secondarily critical to the disposition of our fleetIn the span of two months the availability of capital particularly vehiclebacked financing has significantly tightened as banks move to reduce their auto exposure both consumer and institutional; and capital has become increasingly expensive This is an issue that has magnified as you will hear from David by our own covenant pressuresEach of these factors is impacting us significantly beginning with our third quarter results As you may recall we said last quarter that pricing generally looked good and fleet levels appeared reasonably tight relative to demand This is certainly the case for July but as we moved to the balance of the quarter commercial volume declined even faster than we had anticipated And leisure volume which had been holding up reasonably well through July began to decline as well Despite our rampup of vehicle sales in both August and September this rapid weakening in demand outpaced our ability to defleet; and the industry including Avis Budget went from being in a rightfleeted situation to an overfleeted situation As a consequence pricing suffered Looking at it another way after having reservation volumes up slightly in first quarter and down 1% in the second quarter we finished down 7% in the third quarter with September down about 9% Pricing moved similarly While in July price was up 3% yearoveryear for us we ended August down 1% and September down 5%While some of this is due to mix issues from weak commercial demand and longer length of rental much of our commercial rental volume is at contracted rates As a result third quarter averages actual understate the shortness of the falloff we experienced in the spot leisure pricing for car rentals as the quarter progressed Price declined a little less than 1% overall for the quarter after conditions throughout July strongly supported an expectation of prices increasingWhile we were concerned about the last four months of the year it was difficult to contemplate the extent to which conditions have deteriorated As the entire world has witnessed the operating environment for the entire travel industry has deteriorated far further than anyone expected I don't believe we are alone in the volume and pricing trends we're experiencing They both appear to be reflective of the broader market forces impacting all of our competitors In fact our 3% decline in volume while disappointing is actually favorable compared to what some others experiencedIt's worth a mention that the soft results of the third quarter are being compared against the best quarter the company has ever had In the third quarter of 2007 volume and pricing were up 5% and 3% respectively and revenue increased 12% In other words we were up against very strong comps and even with the challenges of this year achieved double-digit growth from 2006But in this environment looking backward is of little help The focus needs to be on what's in front of us Unfortunately the volume and pricing trends that we experienced in the third quarter are accelerating in the fourth On the volume side fourth quarter reservations are down in the mid to high single digits with commercial volumes driving this trend The declines in rental day volumes are a few points less severe due to some modest but helpful increases in our average length of rentalOn the pricing side we are seeing time and mileage rates per day that are also down a few points Notwithstanding leisure price increases that we implemented in September and that have subsequently been matched and in some cases more than matched by our competitorsWe continue to believe that modestly higher pricing a couple of dollars per rental day is critical to our ability to earn an acceptable return on capital The pricing elasticity associated with our core product offering is such that an increase of 5% or 10% or more in pricing for car rental is unlikely to have any meaningful impact on the demand for our product Accordingly we are continuing to pursue price increases when and wherever possible as we view profitability is more important than shareWe are facing a very difficult yearoveryear comparison in Q4 and while we're not providing any new estimates for year given the various macroeconomic headwinds we have updated our estimates for several key drivers You can work through the sensitivities with our drivers but let me assist you with the answer for the fourth quarter We are expecting an EBITDA loss in domestic and a pretax loss overall for the company with unfavorable comparisons in price volume and fleet costs reflecting the economic environment for both travel and the used car sales marketFor the full year we now expect domestic pricing to be down 1% to 2% in 2008 compared to 2007 which is about 2 points lower than our last estimate Similarly we now estimate fullyear domestic rental days will be flat to down slightly versus 2007 also down 2 points from our prior estimateLastly fleet costs will be up an additional 2% to 3% on a per-unit basis or by around $40million because of our defleeting faster and more significantly than we had anticipated and the resulting impact that had on the remaining fleet mix Bob will provide some further details on our fleet costsThere's one additional point that I do want to emphasize that we are taking full advantage of the flexibility in our business model We have reduced the size of our fleet; we've cut our field staffing levels Our reservation costs our maintenance and damage costs our commission and concession payments and our salary and wage expense are all lower in response to lower volumes As is the case with many companies around the world the rapid deterioration in the financial markets and the economy and in travel volumes simply had a more significant impact on our business than anticipated due to the very short time frame in which this sharp decline has taken placeGiven everything that is happening with respect to the financial markets the economy and airline capacity it's easy to lose sight of the things that are going well We're not going to suggest that these will offset the decline in our results in the fourth quarter but it does show that we are maintaining focus and executing against the key objectives we control First our ancillary revenues continue to enjoy strong growth increasing 10% in the third quarter and 12% yeartodate Second our insurance replacement business is strong and continues to grow with third quarter revenues up 19% Yeartodate our offairport and insurance replacement businesses have grown 8% and 27% respectively Third our commercial account growth has been solid In the quarter we won more accounts than we lost as measured by revenue In October alone we signed $15million of new commercial business Additionally our small business program growth continues to exceed our expectations In this quarter alone we enrolled almost 20000 new accounts in the program We are pleased with the sales momentum we are seeing across all areas Fourth our performance excellence process improvement initiative continues on track to deliver more than $40million of pretax savings this year We remain committed to the $100million to $150million target we announced last year and we expect to achieve this when this initiative is fully implemented In addition our performance excellence program was recently named the best organizational achievement in lean enterprise improvement by WCBF a leading process improvement group While we are certainly facing some significant challenges in the short term both from the economy and in the financial markets we have been making significant progress against many of our strategic and tactical goals for 2008 In addition to that we responded quickly to the softening market we saw in the third quarter To counteract the volume drop-off we saw in August we taxed a team to right-size our domestic operations with the goal of further reducing overhead costs and improving efficiency without sacrificing the service level to our customer base In early September we eliminated more than 700 employee positions including the termination of nearly 600 employees and implemented several organizational changes including productivity enhancements following this review These actions while not at all easy will save us more than $50million annually We also reduced our field employee head count more than 12% from the beginning to the end of the quarter some of which is attributable to the recent action with the vast majority represents how we operate and flex the work force based on demand The number of field employees is now down 10% yearoveryear Independent of our operating challenges we completed a review of our sales organization which resulted in the decision to realign the sales team to better serve and penetrate key market segments with a renewed emphasis on midmarket accounts small businesses and travel partnerships in associations Our accounts gained since this realignment are already validating the success of this initiativeFinally we implemented an energy recovery fee in most states which ranges from $047 to $070 per day depending on the level of cost increases to try and offset the impact of higher energy prices on our business The annual impact of this fee could exceed $20million Also in the third quarter we increased the outsourced portion of our general reservation calls by over 10 points now outsource nearly 70% of these callsConsidering the acceleration of the economic challenges in September these steps alone are not enough The ongoing weakness in our industry the economy and the credit markets make it imperative for us to take further action to strengthen the foundation of our business As a result we intend to build on the steps taken during the third quarter and the savings achieved from our ongoing performance excellence initiative through a fivepoint cost reduction in productivity enhancement plan We anticipate that this plan will enable us to reduce our annual operating costs by an additional $150million to $200million by the middle of 2009 We expect to realize these savings through five specific actions which we are pursuing aggressively We are targeting significant reductions in operating costs fleet costs SG&A expenses head count discretionary spending and other variable costs We are taking a hard look at station customer and channel profitability to identify and respond appropriately to unprofitable aspects of our business Third we are reviewing our pricing strategy and intend to pursue selective price increases in order to improve revenue per day and overall profitability Fourth we plan to further consolidate both customer-facing and noncustomer-facing activities and locations which we anticipate will provide considerable synergies And fifth we are further consolidating our purchasing programs and streamlining our procurement practices These items that we are pursuing should produce savings ranging from $150million to $200million on an annual basis None of this is lowhanging fruit but most if not all is within our control We are not relying on the market per se for any help All of this I would emphasize is in addition to the savings that we've achieved through our performance excellence initiative and in addition to the savings we're achieving from our third quarter staffing reductions [inaudible] process improvement and strategic while some of the actions that I had outlined above are tactical responses to the operating environment These actions are well considered fairly dramatic and wholly appropriate in light of the challenges we faceWhile many of the actions we are taking are being driven by negative trends we do believe we are building a stronger foundation and becoming a leaner and more nimble organization better positioned for longterm growth and prosperity While we are operating in the most difficult environment any of us have ever seen we are taking all the appropriate steps When the economy rebuilds which it absolutely positively will as it has always done our actions should provide the platform for meaningful earnings growth With that I will turn the call over to BobRobert SalernoThanks Ron Good morning Today I am going to discuss the trends we are seeing in the used car market provide an update on our model year 2009 fleet negotiations Before I do that though I want to echo Ron's comments The current environment is incredibly challenging but it is pushing us and our teams to attack costs mercilessly The actions we took in Q3 were an important step but they were only the initial step With that let me talk about fleetPrices we realized on our used car sales in Q3 were where we expected them to be We sold 35000 risk units in the quarter principally through traditional wholesale auctions However we are also continuing to see that about 7% of our sales coming through direct-to-dealer wholesale ecommerce channels Openlane SmartAuction and Manheim/OVE Our aggregate cost per month per car we sold including any gains or losses on disposition was in line with the depreciation rates that we set This is a continuing trend that indicates we have been managing our risk fleet effectively Smaller more fuel efficient cars which comprised the majority of our risk fleet continued to outperform the broader used car market Even prices for SUVs rebounded a bit as gas prices fellNonetheless while we achieved our expected results in the third quarter we think the fourth quarter will likely tell a different tale More because of creditrelated issues than anything else Starting in September demand for used vehicles slowed as both dealers and consumers were getting squeezed by credit availability We are watching this closely and we expect the used car market to be very soft until dealers' access to credit improvesThe size of our fleet and our projected utilization are okay for Q4 and we can take steps to address continuing softness We can slow or delay purchasing new cars We also have the option to slow the deletion of cars from the fleet to minimize the effects of volatility in the used car market And we continue to optimize which cars we sell at what times and what geographic regions and through what channels in order to mitigate negative developments in various pockets of the marketLastly on the topic of fleet costs in order to try to avoid any confusion I should address why our per unit fleet cost increased at a double-digit rate in Q3 if the used car market was performing as we expected and why our expected fullyear fleet costs have increased as well As we moved to aggressively defleet in the face of rapidly declining demand we were forced to dispose of some cars both program and risk sooner than we would have preferred thus shortening the hold period As we have said in the past the longer we can hold a car the less expensive it is And the converse is also true If we turn the car back after 11 months instead of 13 we generally have to forego the two least expensive months for us to hold that car While we were able to bring down the fleet to match demand in the quarter there is cost to the flexibility But this cost is far less than holding excess cars that aren't needed Since we sold more risk cars than planned in Q3 we incurred more shuttling vehicle preparation costs and auction fees than we had projected We include these costs as part of our fleet costs something that isn't uniform across the industry The higher disposition expenses accounted for about two to three points of the fleet costs increase in Q3 and a point of the overall increase in the 2008 fleet costsLastly as I mentioned we are very cautious in our outlook for the used car market We have adjusted the depreciation rates for the SUVs we are carrying in our fleet and are constantly looking at the rates we're using for each of our other models in our risk fleet And lately more of these adjustments have been upward not downward as you would expectThis will add about a point to the full year fleet costs As a result of these three factors shorter hold periods more disposition costs and higher depreciation due to expected softness in the auction market we now expect fullyear fleet costs to be up approximately 8% to 9% compared to our previous estimate of a 4% to 6% increaseTurning to the model year 2009 fleet purchases we are in the final stages of negotiations with the OEMs; and we have a pretty good sense of where our purchase agreements will end up Access to cars is very good and we are looking to have even further manufacturer diversification of our fleet We are still working through the final risk program mix but continue to expect that our risk car portion of the fleet will remain consistent with this year at about 50% Once again our risk fleet is expected to be weighted toward small and midsize vehicles as we negotiate our overall fleet mix to reflect changing consumer preferences In terms of per unit domestic fleet costs including vehicle disposition costs we continue to estimate an increase in the 1% to 3% range for 2009 I would like to provide a little more detail around this increase First remember that this is our all in fleet costs including selling costs Our depreciation expense is actually expected to be flat yearoveryear But we have moved fleet to a 50/50 program-to-risk mix in model year 2008 from model year 2007 We have more risk cars to sell so we have an incremental expense hitting yearoveryear in 2009 which is causing most of this increase in per unit cost Even with this expense risk cars are still less expensive than program cars Lastly just looking at our stats on table three of our release you can see that the fleet was down 2% with days down 3% We made progress throughout the quarter in reducing our fleet We couldn't exit cars quite fast enough to keep our utilization equal to the strong third quarter 2007 levels Let me put it in a different perspective for you When we initially planed the fleet our net Q3 deletes were about 50000 units In fact our net deletes totaled some 60000 cars over a 20% increase over what we originally had planned So when looking at the two largest expenses we control people which Ron has mentioned were down 10% over the course of the quarter and vehicles I hope you can see that we're actively managing these costs With that let me turn to call over to DaveDavid WyshnerThanks Bob and good morning everyone This morning I would like to discuss our recent results our free cash flow and our liquidity and debt covenants In the third quarter revenue declined 1% to $17billion EBITDA was $141million; and pretax income was $87million excluding unusual items EBITDA declined from $168million that we reported in third quarter 2007 due to domestic results that were impacted by increased fleet costs higher gasoline prices and decreases in both pricing and volumeWe also reported lower results in our truck rental business due to the continuing weakness in the housing market and a softening economy Separately we recorded an impairment charge of $13billion or $11billion after tax primarily due to the decline in our stock price and market valuation generally The charge is comprised of $923million for the writedown of good will a reduction of $321million in intangible assets and $18million to reduce the carrying value of our investment and carry holdings Impairment charge does not impact our cash flows or our covenant calculations but does reduce our reported GAAP earnings and our book equityWe also had $11million of other unusual items in the quarter $5million was for the settlement of a litigation claim outside of the normal course and for which we have an insurance claim pending $6million was to reflect expenses associated with personnel actions taken in the quarter There will be additional restructuring charges in future periods as we take additional actions to reduce costsIn our domestic car rental operations third quarter revenue decreased 1% reflecting a 3% decrease in rental days and a slight decline in time and mileage revenue per day offset by a 10% increase in ancillary revenuesRental volumes were impacted by decline in enplanements On-airport rental days decreased almost 4% with both commercial and leisure volumes down The data we have seen so far indicate that our rental day volumes were modestly better than market trends most notably a decline in domestic enplanements of approximately 7%The $27million increase in ancillary revenue reflects considerable progress in take rates on our insurance product The penetration rate on where2 GPS rentals is more than 25% higher this quarter than in the third quarter of 2007 Domestic EBITDA for the quarter also benefited from cost savings from process improvement and lower interest expenseThese benefits of ancillary revenue growth and productivity were fully offset by lower volume and inflationary pressures impacting gasoline wage and fleet costs As I mentioned before even with significant progress in reducing nonfleet expenses it's difficult for us to grow earnings when pricing is flat or down yearoveryear Domestic fleet costs increased 13% on a per-unit basis primarily due to earlier defleeting as Bob discussed Excluding gasoline expenses and unusual items our direct operating expenses decreased by more than 90 basis points as a percentage of revenue yearoveryear This reflects our cost reduction initiative performance excellence program and the tactical actions Ron discussed SG&A expenses declined slightly yearoveryear due to our focus on cost containment Turning to international car rental operations revenue increased 4% in Q3 driven by a slight increase in time and mileage rates per day and a 12% increase in ancillary revenues EBITDA increased 18% driven by foreign exchange movements revenue growth moderating fleet costs which were flat on a per unit basis excluding the impact of exchange rates lower self insurance costs and lower interest costs due to a decline in vehicle debt levelsIn our truck rental segment revenue declined 10% in the quarter due to an 8% reduction in time and mileage revenue per day and a 3% decrease in rental days EBITDA declined as lower fleet costs and operating cost savings were more than offset by the decline in pricing and volume The drop in T&M per day reflected lower pricing across all channels magnified by a decline in the proportion of oneway rentals which typically carry the highest daily rates We are managing our capital spending judiciously Expenditures totaled $20million in the third quarter primarily for rental site renovations and information technology assets The substantial majority of our CapEx was infrastructure related We have aggressively cut back on discretionary items Our free cash flow yeartodate was $300million reflecting our pretax income excluding the impairment charge our efforts to focus on cash generation some timing issues particularly with respect to our fleet and utilizing our vehicle-backed funding structures more rather than using corporate cash to fund our fleetWe continue to target free cash flow of 85% or more of pretax income in 2008 We are pursuing opportunities in working capital management and in our vehicle programs to reach this target We expect to pay cash taxes of $20million to $25million in 2008 And our capital spending will be close to our depreciation and amortization expense As Ron highlighted and as we mentioned in our earnings release conditions in the fourth quarter are shaping up to be remarkably difficult Rental volumes are weak particularly for the month of November Demand for used vehicles has fallen sharply since midSeptember in most geographic areas Our per-unit fleet costs and our financing costs are up The pricing we are achieving is down despite the retail price increase we led in September and the one we rapidly followed in October We are also facing a difficult comparison to fourth quarter 2007 a period in which our results were stronger than the industry as a whole and in which we reaped the benefits of improving insurance claims experience Currently even our interest rate and gasoline hedges some of which must be marked to market appear likely to have a negative effect on our fourth quarter results As a result of these factors and despite the aggressive actions we are taking to reduce costs and improve profitability we expect our yearoveryear comparisons in Q4 are likely to be the weakest we report in this business cycle We expect that such fourth quarter results will include an EBITDA loss in our domestic car rental segment and a pretax loss for the company as a whole excluding any restructuring or unusual itemsTurning to liquidity and covenant issues as we announced last week we have extended $135billion of our principal assetbacked conduit facility for 60 days In conjunction with the extension we took several steps to reflect evolving market conditions We increased the borrowing spreads associated with the facility by nearly 3 percentage points We have upped the collateral requirements so that the facility is now rated AA by both Moody's and S&PWe also remained in compliance with our covenant requirements as of September30 Our leverage ratio under the covenant calculation was four times and our interest coverage ratio was three times both well within our requirements Renewal of our assetbacked conduit facility into 2009 is a key objective for us It's really part and parcel of a larger issue our potential inability to remain in compliance with the financial covenant contained in our corporate credit facility going forwardWith travel demand having deteriorated significantly over the last three months with our financing costs having increased more than we expected and with the macroeconomic outlook for Q4 and first half 2009 being very challenging the cushion that we had expected with respect to our covenant has been evaporating and appears likely to continue doing soIn October prior to the extension of the conduit facility we had conversations with many of our banks regarding our need for an amendment of the covenant package in our credit facility While all parties we in particular are disappointed to be having these discussions we were fortunate that our banks understand the perfect storm we are facing and are seeing the source of issues arise in many corners including the banks' own balance sheets as a result of broad macroeconomic and market issuesOur banks understood that while ongoing covenant compliance is a challenge for us we have generated $335million in EBITDA over the last 12 months compared to $124million in corporate interest expense At this point I would characterize our discussions today with our banks as constructive We are pulling together our detailed plan for 2009 including the steps we will take to pursue aggressively the incremental cost savings that Ron discussed We expect to use that information and our dialogue with the banks regarding not only the covenant amendment but also the renewal of our principal conduit facility and possibly the renewal of our seasonal conduit facility which matures in February Our goal is to amend our covenants to provide relief and to renew a substantial portion of the $25billion of bank conduit capacity we currently have We will also continue to look for opportunities to issue assetbacked term debt although market conditions will dictate the term ABS issuance we'll move into in 2009We are as disappointed and frustrated as anyone with the current trends in our business But our focus as a company is on two principal items Our top priority will be to address the covenant constraints and conduit renewals At the same time we are responding to a weakerthananticipated business climate by aggressively re-looking at our operating costs our fleet costs our SG&A costs and all of the other components of how we do business to find ways to strengthen our results I have been heartened by how the Avis Budget team has rallied behind these critical initiatives RonRon NelsonThanks David Before we open this to Q and A I want to reiterate there's no question that this is an extremely difficult business climate It's important to emphasize that we remain confident in the foundation of our company and our ability to exploit the flexibility in our business model in a manner to support our longterm growth We have the right business model and a strong management team to help us navigate the challenging environment We have great people who provide the same high quality of service to our customers day in and day out This is critically important to helping us attract and retain customers attract new customers and retain our existing ones in today's tough market?While our business model allows us to take aggressive steps to reduce our costs we will not compromise in our commitment to service excellence We are asking a lot of our managers employees and vendors In the process we are positioning the business for longerterm prosperity With that David Bob and I will be pleased to take your questions

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