Herc Holdings Inc (HRI) 2006 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Hertz Corporation first-quarter 2006 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS).

All individuals listening to the call or the replay are reminded that the call is being recorded by the Hertz Corporation and is copyrighted material. It cannot be recorded or rebroadcast without the Hertz Corporation's express permission. Monitoring this call implies agreement not to record or rebroadcast without the Hertz Corporation's express permission. Furthermore, listening to the replay implies consent to the Hertz Corporation's taping. Please do not monitor this call if you do not agree to these terms.

The Company has asked me to read the following statement. Please be advised that certain statements made on this call, including, without limitation, those concerning our liquidity and capital resources, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Hertz's operations; economic performance; financial condition; management's forecasts; efficiencies; cost savings and opportunities to increase productivity and profitability, income and margins; liquidity anticipated growth; economies of scale; the economy; future economic performance; Hertz's ability to maintain profitability during adverse economic cycles and unfavorable external events; future acquisitions and dispositions; litigation; potential and contingent liabilities; management's plans; taxes; and refinancing of existing debt.

Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These statements may be preceded by, followed by or include the words believes, expects, anticipates, intends, plans, estimates or similar expressions.

Forward-looking statements are not guarantees of performance and by their nature are subject to inherent risks and uncertainties. You are cautioned, therefore, that you should not rely on these forward-looking statements.

You should understand that the risks and uncertainties discussed from time to time in Hertz's Reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission, including those factors discussed under the heading Risk Factors in Hertz's 2005 Annual Report on Form 10-K, could affect Hertz's future results and could cause those results or other outcomes to differ materially from those expressed or implied in Hertz's forward-looking statements.

Any forward-looking information related on this call speaks only as of the date hereof. Factors or events may emerge from time to time, and it is not possible for Hertz to predict all of them. Hertz undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

I would now like to turn the conference call over to our host, Ms. Lauren Babus. Please go ahead.

Thank you. Good morning, everyone. Welcome to Hertz's first-quarter 2006 earnings conference call. This is our first such call for the fixed income community.

Joining me are Craig Koch, Chief Executive Officer; Paul Siracusa, Executive Vice President and Chief Financial Officer; and Robert Rillings, Staff Vice President and Treasurer of Hertz.

This conference call also contains a discussion of certain non-GAAP financial measures within the meaning of Regulation G. The measures we refer to as corporate EBITDA and operating free cash flow after net capital expenditures are non-GAAP financial measures.

In accordance with Regulation G, information required to accompany the disclosure of non-GAAP financial measures, including a reconciliation to comparable financial measures calculated and presented in accordance with generally accepted accounting principles, is available on the Investor Relations portion of the Company's website at www.hertz.com/fixedincome. and will also be furnished shortly after this conference call as part of a current Report on Form 8-K.

As you may know, prior to the acquisition last December, Hertz had a much lower percentage of car rental fleet debt than it has currently. In order to provide you with a meaningful corporate EBITDA measure, we have used actual revenue and expense numbers with pro forma fleet interest expense calculated as if the current financings were in place at the beginning of the period. We will present corporate EBITDA on a last 12-month basis. So as we progressed through the year, pro forma quarters will be replaced with actual results.

On a consolidated basis, Hertz generated first-quarter revenue of $1.787 billion, an increase of 8.9% over the first quarter of 2005. The pre-tax loss for this past quarter was $63.3 million, compared to pretax income of $35.5 million. And the after-tax loss was $49.2 million, compared to net income of $20.9 million in the first quarter of 2005. Consolidated corporate EBITDA was $204.7 million for the first quarter of 2006 or 11.5% of revenue, compared to pro forma corporate EBITDA of $155 million for the first quarter of 2005, or 9.5% of revenue.

And now I will turn the call over to Craig, who will provide an overview of the business segments.

Okay, thanks, Lauren, and good morning, everyone. Welcome to our call. For our worldwide car rental segment, we reported first-quarter revenue of $1.422 billion, an increase of 5.1%, and a pretax loss of $11.1 million, compared to a gain of 24.6 million for the first quarter last year. Segment corporate EBITDA was $64.5 million or 4.5% of revenue, compared to $61.2 million on a pro forma basis for the first quarter last year, also 4.5% of revenue.

Worldwide transaction day growth for the first quarter was 2.2%, with similar increases both in the United States and internationally. Over the last couple of quarters, U.S. airport demand for our rental vehicles has somewhat moderated due to reduced airline capacity and a resultant rise in airfares, coupled with our actions to increase pricing. Our airport market share for full year 2005 was 29.2%, a 9 percentage point gap to the next-largest competitive brand.

Off-airport rental activity continued its trend of strong growth, particularly in the replacement sector. Our presence will be expanded further this year on a selective basis as we open new locations and continue to penetrate the insurance industry. In fact, earlier this month, Hertz was named the co-primary supplier in one of the largest insurance companies in the United States.

During this past quarter, our worldwide average rental rate per day was 3.1% higher than the prior year. In the United States, the increase was 3.6%, with pricing improvement across all market segments, especially in the leisure category.

In the fourth quarter of 2005, we held the higher leisure pricing that we implemented last summer, and competitors followed, especially in the online channels. In addition, we have been successful in raising commercial contract pricing. These trends continued in the first quarter and so far into the second quarter.

The primary catalyst for improved industry pricing is the fleet cost increase, driven by the manufacturers' decision to moderate supply and raise depreciation rates on program vehicles. At the same time, the capitalized cost for the new models has increased only slightly and the used car market has remained very strong.

In Europe, both leisure and commercial rates and rental length improved in the first quarter, while car costs increased, but to a lesser degree than in the United States. The average number of owned cars operated worldwide during the quarter was 405,000, about the same as the first quarter last year. Vehicle supply is adequate, but in order to reduce the cost impact of the 2006 models, we somewhat lengthened the fleet holding period and increased the level of risk cars beyond the 22% and 26% reported for domestic and international for the full year 2005.

Our overall fleet efficiency this past quarter, measured by average rental revenue per vehicle, improved by 5.8% compared to the first quarter of 2005. In April, we launched the Hertz Fun Collection, providing customers the opportunity to reserve exciting vehicles like the Mazda Miata, the Ford Mustang and the PT Cruiser on a brand and model basis. The Fun Collection cars are now entering the fleet in significant numbers, so we do not expect the impact of this introduction to be seen before the third quarter.

Now turning to HERC, our equipment rental unit, worldwide revenue for the first quarter was $363 million, an increase of $78 million or 27% over the first quarter of 2005. Pretax income was $34.5 million with a 9.5% margin, compared to the first quarter of 2005 pretax of $15.4 million, which was 5.4% of revenue.

Segment corporate EBITDA was $146.5 million for the quarter, or 40.3% of revenue, compared to pro forma corporate EBITDA of $95.9 million or 33.6% of revenue the year before. Please recall that seasonally, the first quarter is typically HERC's weakest.

North American revenue and pretax growth was primarily driven by improved pricing of 4.6% and strong rental volume, with same-store year-over-year revenue growth in the first quarter of 29.9%. Our continued focus on increasing penetration in the general rental and specialty areas such as pumps and compressors, power generation and industrial is certainly paying off as we experienced double-digit growth in all of the sectors. As a point of reference, FW Dodge reported non-residential construction contract year-over-year growth of 16.3% for the first quarter.

The total HERC network at December 31, 2005, consisted of 345 locations, 265 of which are in North America, where we plan to add 18 locations to increase our geographical coverage and better meet the demand for specialized equipment.

Average worldwide rental equipment operated during the quarter on an acquisition cost basis was $2.8 billion, 16% higher than the same period last year. Overall fleet efficiency this past quarter, measured by HERC revenue divided by that average fleet level, improved by 450 basis points year over year for the first quarter, reflecting both pricing and utilization increases.

Net book value for HERC revenue earning and equipment increased by $118.3 million from December 31, '05, to March 31. In the first quarter, HERC purchased $210 million of new revenue-earning equipment and incurred $62 million of depreciation expense. Disposals accounted for the remaining $30 million change in value.

With that, I would like to turn the call over to Paul Siracusa. Paul?

Thank you, Craig. Good morning. Revenue growth for the quarter, as Craig mentioned, was 8.9% or 146 million compared to first quarter 2005. Car rental revenue growth was $69 million and HERC increased its revenue by $77 million.

This past quarter, total Company direct operating expenses represented 59.9% of revenue, compared to 59.4% in the first quarter of 2005. This reflects increases totaling $96 million relating to the amortization of intangibles under purchase accounting, commission fees, wages and benefits, self-insurance expense, gasoline costs, the cost of equipment sold, facility expenses and concession fees in our car rental operations.

Depreciation expense for revenue-earning equipment was 22.8% of revenue, the same as the first quarter in 2005. In both car rental and equipment rental, the used markets were very strong, so we decreased depreciation rates with respect to non-program cars and equipment to better reflect changes in estimated residual values. For U.S. car rental, this, along with some improvement in utilization, helped to offset the increase in 2006 model year vehicle costs.

SG&A expense was 9% of revenue, 60 basis points below the comparable period last year. The absolute dollar increase of $4 million was due to higher administrative and sales promotion expenses primarily related to compensation, offset by favorable foreign exchange.

Interest expense rose from 6% of revenue to 11.8%, reflecting increases in both average debt outstanding and the weighted average interest [technical difficulty], both of which relate primarily to the acquisition. Car rental fleet interest for the quarter was $98 million, which includes amortization of deferred financing costs totaling $21.5 million. Hertz's effective tax rate was 27.4% for the quarter, slightly lower than the full-year 2005 rate.

On a consolidated basis in the first quarter of 2006, Hertz had net revenue-earning equipment capital expenditures of $1.271 billion, slightly below the net CapEx level of $1.293 billion reported for first quarter 2005. Net CapEx for property, plant and equipment, encompassing investments in our facilities, systems and service vehicles, was 44.9 million for the quarter, compared to 72.3 million in first quarter 2005. Depreciation expense for these non-fleet assets was 49.8 million in the first quarter 2006 and 46.5 million for the same period in 2005.

Consolidated pretax for the 12 months ending March 31, 2006, was 442.9 million. For worldwide Rent-a-Car, pretax was 338.9 million, and for HERC, $258.2 million.

Consolidated pretax for the full year 2005 was 541.7 million. For that period, worldwide Rent-a-Car achieved pretax of 374.6 million, and HERC, 239.1 million.

Corporate EBITDA for the 12 months ending March 31, 2006, which includes three quarters pro forma interest and one quarter actual, was 582 million for worldwide Rent-a-Car, or 9.5% of revenue, and 638.5 million for worldwide HERC, or 42.8% of revenue.

Consolidated corporate EBITDA for Hertz was $1.1906 billion, or 15.6% of revenue. For comparative purposes, pro forma corporate EBITDA for the full year 2005 was 578.7 million for worldwide Rent-a-Car or 9.6% of revenue and 587.9 million for worldwide HERC or 41.5% of revenue. Consolidated corporate EBITDA for Hertz was $1.1409 billion, or 15.3% of revenue.

In 2005, Hertz management voluntarily conducted an assessment of the effectiveness of our internal control over financial reporting, and management concluded that our internal control was effective as of December 31, 2005.

That assessment was audited by PricewaterhouseCoopers. PWC concurred that our assessment of effective internal control over financial reporting was fairly stated and their own audit work concluded that internal control over financial reporting was effective as of December 31, 2005. I also want to mention that no changes in our internal control over financial reporting have occurred during the past quarter which have materially affected or are reasonably likely to materially affect Hertz's internal control.

And now I will turn the call over to Bob Rillings. Bob?

Thanks, Paul, and hello, everyone. From a liquidity perspective, Hertz was in very good condition at March 31, 2006. We had 679 million of cash and equivalents. With our new capital structure, we have much more committed credit available to us, as I will demonstrate shortly, and we do not need to maintain as high overborrowing balances as we did in the past. This is more efficient from a cost basis as well.

We also had restricted cash of 248 million, which is not readily available for our normal disbursements. These funds are restricted for the acquisition of revenue-earning equipment under our asset-backed notes program and to satisfy certain insurance reserve requirements.

At March 31, 2006, total debt outstanding was $12.5 billion, $6.8 billion of which was car rental fleet debt, $2.1 billion of debt secured by other assets, and $3.6 billion which is not secured.

For our worldwide car rental operations and European equipment rental operations, we had additional capacity subject to borrowing base availability of $2.6 billion, comprised of $1.1 billion in the U.S. and $1.5 billion for the international operations.

For corporate debt, which includes working capital for our operations, we had 1.4 billion of additional capacity, subject also to borrowing base availability, consisting of 293 million under the senior term facility and 1.1 billion under the senior asset-backed loan facility.

Hertz's leverage remains comfortably within our expectations. Net corporate debt, which is adjusted to cash, at March 31 was $5 billion, representing total debt less U.S. and international fleet debt, and pro forma corporate EBITDA for the 12-month period ending March 31 was $1.2 billion.

Looking at our consolidated cash flows for the quarter, cash flow from operations was $1.205 billion, compared to 911 million in the comparable 2005 period. This improvement was largely due to working capital items.

In the quarter, we invested 3.9 billion in revenue-earning equipment for both Rent-a-Car and HERC versus 3.6 billion in 2005. Non-rental CapEx for the quarter was $65 million, $17 million below the prior year. Our operating free cash flow after net capital expenditures, which is the net cash provided by operating activities reduced by the net spending for revenue-earning equipment in property and equipment, for the period was a requirement of $111 million, compared to a requirement of $455 million in the first quarter of 2005.

Now let me turn the call back to Craig.

Okay, thanks, Bob. So from an operating standpoint, we had a solid first quarter, with HERC firing on all cylinders and car rental having offset rising car costs with pricing and expense efficiency improvements.

Looking forward in car rental, we expect the 2007 model year repurchase program depreciation rates to rise again, offset by positive pricing and demand environment both domestically and internationally. Industry indicators and our own results in HERC lead us to a positive outlook in that business as well.

And so with that, we will now be glad to take your questions. Operator?

(OPERATOR INSTRUCTIONS). Lionel Jolivot, Barclays.

Craig, can you just elaborate a little bit more on your last comment about the outlook for '06? What kind of a corporate EBITDA are you looking for, and particularly, what kind of EBITDA should we look at for the Rent-a-Car operations?

Lionel, it is Lauren. Unfortunately, it is still fairly early in the year. We are not comfortable providing such information today.

And then maybe outside of the -- even if you cannot quantify the outlook, it seems that car prices or the cost for you to acquire new cars continued to go up in the second quarter. Have you been able to continue to increase your own rates since the end of the first quarter?

Yes, we have, Lionel. All the segments that we have been targeting for price increases, we've been successful in. You will recall that I mentioned at one time, sometime back during the roadshow, etc., that it takes about a third of the cost of the car increase in terms of pricing to offset those costs because the car costs represent about a third of our fleet. So we have been successful in doing that both in the first quarter and so far in the second quarter.

And last thing -- at the time of the LBO, when you were on the roadshow, I think you were pretty clear that you had no plans to sell HERC. Given the recent IPOs in this sector and the deals that have been announced recently, have you changed your mind on the subject and would you consider monetizing the equipment rental assets at this point?

We're not really going to comment further on any situations involving acquisition or dispositions of any of the business units.

Okay, that is fair. Thank you very much.

Zafar Nazim, JPMorgan.

Just another question on car rental rates. I guess the rates were up roughly 3.1% over last year. I was wondering if you can split this increase between leisure and commercial businesses?

Generally speaking, the commercial sector is increasing. That pricing is increasing between 2.5 and 3%. And depending on the month during the period we're talking about here, leisure pricing has risen anywhere from 4 to 7%. And the reason I say that's in any given month, because the percentages vary with the comps to last year for any given month, so that's why I give you that range. Does that help?

Yes. And then any initial estimates of what you expect in terms of cost increase in the '07 models for your rental car business?

All I would say is we are looking for something similar to the '06 model year. But it is very early in this process. It is another, for your information, it's at least another month and a half before we really know what these programs will yield. And remember, both -- there is always the mixture of risk vehicles as well as program vehicles. So each of those really are separate. But at this point, all I could say is probably something similar to the 2006 model year.

And I guess 2006 was roughly 15%, was that--?

Well, on a unit cost basis for the program cars, it was about 16%.

So the 16%, or roughly 15, 16% gain, then, I guess, given the formula that you just gave to us, you need to increase I guess rental rates by roughly 5% or so. Would that be a good estimate?

I think you're a little high, because there's other factors that keep the overall financial cost down, because these are only the program cars, remember, so the risk cars are affected much less so. And there is always the mix considerations and the other conditions of the program, which we still don't know.

And the risk cars you mentioned were I think roughly 22% in '05. Where do you see this heading for '06?

We don't have that all defined. Obviously, the key things we need to know is what are the economics and the other terms and conditions of the programs for '07. So we won't -- those vehicles start coming into the fleet late summer and early fall. So we won't really know that. I would just say that generally -- probably be an increase in risk cars.

And then finally, if you could refresh or provide us updated guidance on CapEx for 2006.

As I mentioned before, it is still fairly early in the year. And we are not comfortable providing that today.

Doug Karson, Banc of America.

Just a quick question on overall demand that you have seen with gasoline prices as high as they are. We are hearing comments out of Avis and other competitors that travel's still relatively robust, but just wanted to see what your take on what kind of leisure travel has been with gasoline as high as it is?

It is hanging in there pretty consistently right now with the last two or three quarters. Remember, we are doing a comparison. Now, we are heading towards the summer, spring and summer period, compared to last year that was very strong. So the comps are going to be a little more difficult.

I think a very key factor, if you had a chance to see the papers this morning, was the commentary that even though airline capacity is going to be down between 2 and 3% this summer, with airfares up somewhere between 10 and 12% overall, that the expectation is very firm that there will be a low- to mid-single-digit increase in overall airline traffic, which drives a good part of our business.

So it doesn't look, at this point, like it is going to affect the overall travel patterns of those who actually are on a fly/drive type of vacation. I won't comment on somebody who is going to be driving their own personal car because I don't think that's really what we are interested in as much here. And from a car rental standpoint, we have seen no particular change in the customers' habits in terms of the mix of vehicles they might be renting.

So at this point, I mean, it is still early in the booking process. None of us in the industry really have any true, good, solid reservation numbers to look at this summer. It is quite early in the booking pattern for that. But it looks like a positive outlook in terms of growth.

Hillel Olshin, Deutsche Bank.

Craig, first question -- the average fleet size in the quarter was slightly down versus last year. I thought it would actually be higher in the first quarter. Can you discuss sort of fleet -- what went on really in the fleet? Was it sort of a timing issue? Or do you expect to have sort of a flattish fleet for '06?

Well, I am not going to comment for the whole year because it is just too early, and until we see what develops for the reservations for the summer and for the rest of the year. But essentially, what occurred -- you saw the revenue generation. But it was increased efficiency. We had better fleet utilization both here and in Europe. And that comes from a lot of different factors. But overall, we would expect, I think it is fair to say, some growth for the year in the fleet for Rent-a-Car. Does that answer your question?

Sure. Yes. Craig, you mentioned sort of similar price increases for the model year 2007 versus 2006. Can you comment on which OEMs are being the drivers of these cost increases? Or is really across the board?

I can't comment on the individual ones because we just don't have all the numbers yet. This is very, very early. I need to restress that. They are very, very preliminary indications, and this is just our feeling from preliminary conversations. We don't have any hard numbers or proposals, even, from anybody at this point.

And when do you start purchasing those model year 2007 cars?

We will start ordering them towards the middle to end of July. They start getting delivered in any kind of real number in mid-September -- that's when they really start getting delivered -- heavily, more heavily in October, November and December.

And finally, I guess this question might be for Paul and Robert, you guys mentioned some significant working capital improvements in the quarter. Can you care to give more color in terms of what went on there and what can we expect? Can we expect these improvements to hold going forward?

Well, the improvements that we discussed relate primarily to improvements in receivables, mostly in the fleet area. As to whether they will continue, it really is a function of a point in time, and I wouldn't project that they were going to continue to improve.

Before we take the next question -- this is Craig -- I wanted to make one point. There were several questions about car costs. I should point out that the capitalized cost of the cars, the actual cash outlay for us, is only a very slight increase over the previous model year, '06 versus '05. And we expect a similar type of situation for '07 versus the '06 model year. That is just to clarify the difference between the cap costs and the depreciation costs on the program cars.

Okay. Next question?

[Lawrence Jones], Lehman Brothers.

It is Lawrence on behalf of Sarah Thompson. A couple of housekeeping questions. You guys provided the corporate EBITDA number, which is a big help. Would you mind giving us the car fleet interest number that you back out of the gross EBITDA calculation for the first quarter of '06 and '05 pro forma?

I think it is in the reconciliation.

It's there.

The reconciliation that will be provided in the 8-K later today?

It is on the website currently. Okay? You can --

And will that reconciliation also include what I would term other depreciation and amortization? In the Q, you guys provided depreciation of revenue-earning equipment, but we couldn't see a consolidated D&A number on the cash flow statement. Will that reconciliation also include other D&A?

Basically, what I am trying to do here is build to gross EBITDA and then back out the depreciation of the car fleet and the vehicle interest to derive corporate EBITDA. But if you are saying it is on the site, I can go there.

You ought to be able to see it there. And we can help you walk through if we need to offline here. But I think it is laid out very clearly. Even I could understand it.

Okay. Sorry I missed that.

(OPERATOR INSTRUCTIONS). Zafar Nazim.

A question on your competition. As Hertz and Avis expand into the off-airport segment, do you see Enterprise being somewhat more aggressive in capturing the airport part of the business by I guess through more competitive pricing? Is that something you've seen recently?

We are obviously playing in their sandbox off-airport, and they are playing in our sandbox on-airport. And their opportunity for growth really is on-airport; ours is off-airport. They are not particularly more competitive today than they were two or three years ago, I think it's fair to say, when they started on airport. It is a completely different cost structure, so I think they are absorbing that and learning that. But I don't think it's fair to say that there's any irresponsible competitive activity on their part.

And any estimate for what the average price differential is between yourself and Enterprise in the airport segment -- the rental [multiple speakers]?

There's just so many different pieces of -- there is 3 million different pieces of competitive rates at any point in time. So really, what you need to do to get a feel for that is, if you have a particular interest in certain markets, is just check them out yourself. But it can range very widely at different points in time, depending on yield management activities by either party or any of the parties of the competitive environment. So averages here really don't apply very well.

And just one housekeeping question -- do you expect to pay any cash taxes this year or next year?

No.

[Phillip Walker], White Mountain Advisors.

I've just got a couple of quick things I wanted just to run through you. What metric do you guys look at and you say, you know what, if we do this really well, we're going to have a great year in car rental. Is there a particular metric or set of metrics that you would say, we've really got to hit on these?

Well, I would stand by the old one, which is revenue per car. It is the simplest one to understand. It takes into account volume pricing and fleet investment, the biggest investment we have. If we get that right, we get most of it right.

There's been some mention in terms of your competitors. Have you seen maybe different behavior from Vanguard now that service is in the mix for GMAC? And do you expect any change from that competitor?

Well, we have not seen any change, and I could not comment about what they are going to do in the future. They are behaving similar to what they have in the past, the recent year or two.

In the -- I guess last year's 10-K, you had mentioned you have to, if you are going to do it, have to elect a 338(h)(10) election by I guess the end of September. Where do you folks stand on that?

Really don't have any comment on that at this point, Phil.

Would that be something that is driven by Ford?

Phil, I am sorry, but we just can't comment.

Fair enough. I think that is it for now, but thank you very much.

We have time for a couple more questions.

Scott Whalen, TCW.

I just had one quick comment, if possible. On your compliance certificates that you give on a quarterly basis, I don't know if -- I think somebody might have already asked you this, but if you could, I don't know if it is possible, but if you can also provide the calculation? Because right now, it is just the compliance -- saying you are in compliance. And there's obviously calculations. Then it makes it a lot easier to do a lot of the calculations.

Scott, why don't we follow up with that later and we can talk about what exactly you are looking for.

Michael Connelly, T. Rowe Price.

First, wanted to see if you could quantify what impact the Easter holiday timing had on the car rental business this quarter?

Yes, I think the easiest way to look at it is pretty simple -- the Easter holiday creates a lot more long, leisure rentals -- in other words, weekly rentals as opposed to shorter commercial rentals. So essentially, what it did was for the month of March, rental length overall shrank, but revenue per day obviously has a tendency to increase a little bit that way beyond the pricing, because shorter rentals tend to have higher revenue per day as opposed to the longer ones. And the reverse of that occurred in April. And now we're back to a pretty even comparative keel.

And then on the equipment rental side, did favorable weather in the early part of the quarter positively impact that division?

The weather was good, generally. It wasn't as cold and so on, except -- until the rain started in the Northwest, because that was a bit of a detriment in the last month and a half. But that is recovering now very nicely. So other than that, though, now we're pretty much back on normal weather patterns.

Is there any way to quantify the impact on both -- of the Easter holiday and the favorable weather on first-quarter sales?

Not really, because, you know, it does not affect the whole quarter. And overall, it is pretty much a wash. I wouldn't really hazard a guess on that and I wouldn't put too much stock in it, in terms of your evaluation of first quarter versus second quarter.

And then one last kind of housekeeping. I was wondering if you could give a little bit further detail on the capital purchases and sales for revenue-earning equipment -- the split between the car rental business and the equipment rental business?

Can we go offline, because I'm not sure what period he's looking for.

You have the Hertz details Craig went through, so you should be able to back out that from the total equipment, the REE changes. If you need some help with that, we can go through it, if you want to give us a call later.

Okay. Thanks, everybody. We appreciate your joining us today and we appreciate your support and look forward to updating you on the second quarter on our next call. Thanks very much.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.