Ladies and gentlemen, thank you for standing by. Welcome to the Hertz Global Holdings 2012 First Quarter Conference Call. The company has asked me to remind you that certain statements made on this call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update that information to reflect changed circumstances. Additional information concerning these statements is contained in the company's press release regarding its first quarter results issued yesterday and in the risk factors and forward-looking statements section of the company's 2011 Form 10-K and quarterly reports. Copies of these filings are available from the SEC, the Hertz website or the company's Investor Relations department. I would like to remind you that today's call is being recorded by the company and is also being made available for replay starting today at 12:30 p.m. Eastern Time and running through May 17, 2012. I would now like to turn the call over to our host, Ms. Leslie Hunziker. Please go ahead.

Thank you. Good morning. You should all have our press release and associated financial information. We've also provided slides to accompany our conference call that can be accessed through our website at www.hertz.com on the Investor Relations page. Today, we'll use certain non-GAAP financial measures, all of which are reconciled with GAAP numbers in our press release and at the back of the slide presentation, both of which are posted on the website. We believe that our profitability and performance is better demonstrated using these non-GAAP metrics. Our call today focuses on Hertz Global Holdings, Inc., a publicly traded company. Results for the Hertz Corporation differ only slightly, as explained in our press release. With regard to our IR calendar, this month, we'll be presenting at the Wells Fargo Industrial Conference on May 8 in New York City. This morning, in addition to Mark Frissora, Hertz's Chairman and CEO; and Elyse Douglas, our Chief Financial Officer, on the call, we have Scott Sider, Executive Vice President and President of Vehicle Rental and Leasing, The Americas; Michel Taride, Executive Vice President and President, Hertz International; and Lois Boyd, Executive Vice President and President of Hertz Equipment Rental Corporation. They'll be on hand for the Q&A session. Now I'll turn the call over to Mark.

Good morning, everyone, and thanks for joining us. Let's start on Slide 6. You can see that 2012 is off to a strong start. Consolidated revenue was up 10.2% worldwide in the first quarter. This growth, together with incremental cost savings of nearly $100 million, led to a 25% increase in corporate EBITDA year-over-year, which translated into a 130 basis point margin improvement. Adjusted pretax income was $29 million, reversing last year's loss. And we reported adjusted earnings of $0.05 per share, a record first quarter result. As always, there were lots of puts and takes in the quarter, but in the end, our more efficient cost structure, the ongoing macro recovery in the U.S. and the benefits from our strategic growth initiatives prevailed. Strong contributions in North America from both rental car and equipment rental, more than offset the challenges resulting from the weak European economy. In particular, in the U.S., on Slide 7, rental car revenue was up 5.3%, supported in part by another strong increase in inbound revenue to the U.S. Adjusted pretax margin was 10.7% in the latest period, which marks a new first quarter record and reflects a 240 basis point increase over last year. This earnings performance had multiple catalysts, as you can see on Slide 8. Let me add some color. U.S. rental car volume increased nearly 10%, with airport transaction days for Hertz Classic and Advantage brands up 9% and off-airport transaction days up about 11% higher. U.S. fleet expanded by only 8.4% on the higher demand as we ramped up fleet-sharing initiatives between brands and businesses. And average rental length increased 1.5%, driven by more leisure and insurance replacement transactions. On Slide 9, revenue per day in total was down 3.9% in the U.S., but our airport leisure RPD, excluding Advantage,…

Thanks, Mark. Good morning, everyone. Let me begin on Slide 17 by reviewing our financial results on both a GAAP and an adjusted basis. Consolidated revenue for the quarter was up 10.2% to $2 billion, with the global rental car division growing 9.8% and worldwide equipment rental revenue reporting a 12.6% revenue improvement. As Mark mentioned, in the first quarter, we generated cost savings of $100 million. Approximately 1/2 of those savings came from direct operating expenses. In particular, fleet-related costs, primarily lower vehicle damage, improved collections, favorable vendor negotiations and milder weather drove the improvements. Reduced employee cost also contributed, as labor efficiency for the company improved 2% in the quarter from the prior year. Slightly offsetting this was a 40 basis point increase in SG&A expense as a percent of revenue, mainly due to higher advertising spending which was up 25% year-over-year. We achieved record first quarter adjusted pretax income of $29.4 million, a 284% increase year-over-year. GAAP pretax income improved 76.8% or $122.1 million. This translated into adjusted earnings per share improvement of $0.08 per share over the prior year loss of $0.03 and a 59.4% improvement on a GAAP basis. Now let me give you some more detail on the financial performance trends by business unit. Starting with U.S. rental car on Slide 20. Total revenue improved 5.3% in the first quarter, including ancillary revenue growth of 8%. Offsetting the lower RPDs that Mark already discussed, was strong transaction days growth of 9.6% primarily due to a 12% increase in leisure demand and a 9.3% increase in commercial volume. Slide 21 outlines our progress in expanding the off-airport and Advantage businesses during the quarter. Starting with off-airport, we continue to expand our footprint, opening 69 net new locations in the first quarter. Off-airport revenue increased 8.2%…

Thanks, Elyse. I'll start on Slide 33. Despite the risks in the global macro environment, we're comfortable increasing our annual guidance as a result of the acceleration of cost efficiencies and the better delivery of U.S. growth initiatives. In the U.S., in the second quarter, volumes continue to accelerate. In fact, in April, airport demand remained strong, while Advantage and off-airport reported double-digit increases. Higher demand is coming from general improvements in the economy, incremental investments in advertising and new locations and the continued rollout of new products and services. Today, we have 122 virtual kiosks in operations worldwide: 91 at the airports and 31 off-airport. We expect to have 500 video kiosks in operation worldwide by year end. In addition, we're offering Gold Choice at 52 locations currently and expect to have it available at the final 7 locations later this year. Gold Choice is a new program that gives customers the security of reserving a car in advance or the freedom to choose another from Gold -- the Gold Choice aisle upon arrival. As always, with either choice, you save time by bypassing the counter. And Gold membership is now free to anyone. We believe our fleet plan is sized appropriately to capitalize on all of these opportunities. In terms of pricing, total RPD should improve sequentially in the second quarter, with the biggest upside coming from leisure rentals on airport. Advanced reservations for the summer peak are already robust. We're especially pleased to see indications that Advantage pricing is trending positive year-over-year from May forward, with the pace of volume growth accelerating. Our growth outlook supports American Express data showing U.S. consumers are planning to spend 11% more on vacations in 2012 than last year. And the national average price for gasoline, at around $3.83, has fallen…

I was just wondering if you could give an update on your franchising initiatives.

Well, I kind of did that, I guess. If you want more detail, we have several large projects we're working on in the United States. We have a large one in Canada, and we have 2 countries in Europe. All of these deals are in the contract stage where we're negotiating the finer points of the contract, so -- but these things, as you know, take time and so that's why we're forecasting we'll have some announcements in the second half of the year. But on both continents, we have deals that are significant enough to talk about. There will be a press release out on each one when we complete them. But again, several large ones in the U.S. and several large ones, whole countries. I'd say we're working on 3 countries and we feel pretty confident on 2 of those in Europe. That's about the most color I can give you at this point.

Our next question is from Michael Millman with Millman Research Associates.

Could -- did you talk about any concern that you have that -- now with Avis realizing its residual reality, I guess, that they will reenter the competition for Dollar Thrifty?

No.

Yes, unfortunately, I can't comment on that, Michael. As I discussed in my opening remarks, there's no comment on this -- on the potential Dollar Thrifty transaction.

And next we'll go to Rich Kwas with Wells Fargo Securities.

On -- Mark, on HERC, with pricing, so you're up 4% in the first quarter, guidance maintained for 2% to 3%, what are the kind of the puts and takes for the rest of the year in terms of, or thoughts on pricing for HERC?

I think our forecast we've handed out there maintains itself. I don't know if I want to say there's upside. There may be a little upside on that on what we've guided to in the past. So a lot of it will depend on mix of business that we gain over the next 8 months. So we feel pretty good that there's some upside, but I don't want to forecast too much at this point.

And we'll go to John Healy with Northcoast Research.

Mark, I thought you made a very interesting comment earlier in the call, when you mentioned that, in the low end of the rental car market -- or the spartan brands in the rental car market, these players are using price just because of how strong the used car market is today. I wanted to get your thoughts in terms of how you guys think about the relationship between the used car market and the rental rates per day, because I think a lot of the investment community feel like the industry is over-earning to some degree because of how strong the used car market is. I wanted to get your thoughts on how confident you are, if and when the used car market comes off the level we are, that you'll be able to get higher revenue per day at the counter and that the margins in the business should be able to be maintained.

Yes. I'm very confident. I mean, we've seen it historically in the business model. It's not a trend that's different today than what it has been in the last 40 years. Again, we've got, as you know, John, we've got a lot of histograms to support this, that show that when you have strong residuals, oftentimes, pricing does suffer, but then once the residuals normalize, that pricing improves. And this is just typically the way it goes. And that's the reason why we even have some of the low-priced competitors right now. It's not just because they decided to enter into the market, it's because the market allows them to be -- to enter itself because of the stronger residuals, which allows them to play price without losing. Now those people, obviously, if they can get an anchor or enough share, they may be able to maintain momentum going forward, but if they're not, then they won't have staying power. But we see this every time. We see this historically, that in periods of strong residuals, low-priced competitors usually start up and pop up all over the place. So this is not a one-time phenomenon, and it's pretty cyclical, actually. So we feel the long-term profitability prospects of the whole rental market are strong and will continue to be strong because OEMs have rationalized their capacity, and we have a much better OEM universe. People are better at, from a systems standpoint, on logistics. People are better on a cost basis due to Lean and Six Sigma programs for the industry. And the industry is enjoying the fact that we're all more sophisticated than we have been historically on pricing, understanding how to optimize price more readily and in a quicker way using technology than we have in the past. All those bode well for the overall rental industry.

And we have a follow-up from Rich Kwas.

Just a follow-up on the guidance. When we think about -- I know you don't give quarterly guidance, but when we think about the rest of the year, last year's second quarter is pretty good because of the depreciation benefit. Do you view that as a tougher comp when you look at the balance of the year? Just some color on that would be helpful.

Yes, Rich, absolutely. We'll have a tougher comp in the second quarter given what happened with the tsunami last year. And I think that's probably true for the industry, not just Hertz. Having said that, we still think that we expect to show improvement, but it is a tougher comp and it's really driven, for the most part, by the strong residuals we had for about an 8-week period during the second quarter last year.

Our next question is from Bobby Jones with Highland Capital Management.

I was wondering if you could comment on the evolution of the rental car RPD, the U.S. market specifically, through the quarter.

I'm sorry. You want to repeat the question again?

Just how rental rates changed kind of through the quarter. I mean, was it basically consistently down kind of 3% through the quarter? Was it down more in January versus March? There's comments from some competitors, perhaps putting through price increases in late February and March, and just wanted to know if you guys saw any flow-through from that.

Well, I think things improved sequentially. I think, as the quarter evolved, the pricing got better and better. And we're seeing that. As I mentioned in my script, we're seeing that right now, that pricing has turned much more positive than it has been in the first quarter. I think fleets have tightened overall. We were tight-fleeted to begin with. I mean, we were pretty right-fleeted, I would say, for the quarter, but some of our competitors were over-fleeted. And so bottom line is, we think the dynamics in the quarter improved, and from at least where we sit today, it looks good right now.

We have no additional questions at this time.

All right. Well, thank you, operator. And thanks for everyone for attending this conference call. We appreciate your interest. And we'll talk to you next time.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.