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 meeting over to Mr. Neal Goldner, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Rhea. Good morning, everyone, and thank you for joining us. On the call with me are Ron Nelson, our Chairman and Chief Executive Officer; Larry De Shon, our Chief Operating Officer; and David Wyshner, our Senior Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind everyone that the company will be discussing forward-looking information that involves risks, uncertainties, and assumptions that could cause actual results to differ materially from the forward-looking information. Important risks, assumptions, and other factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in the company's earnings release and other periodic filings with the SEC, which are available on the Investor Relations' section of our website at avisbudgetgroup.com. We have provided slides to accompany this morning's conference call, which can be accessed on our website as well. Our comments will focus on adjusted results, which excludes certain items and other non-GAAP financial measures that are reconciled to our GAAP numbers in our press release and in the earnings call presentation on our website. Now, I'd like to turn the call over to Avis Budget Group's Chairman and Chief Executive Officer, Ron Nelson. Ronald L. Nelson - Chairman & Chief Executive Officer: Thanks, Neal, and good morning. Well, it wasn't easy, but we delivered record earnings in the third quarter with both our Americas and International segments contributing to our growth. We were up against a tough year-over-year pricing comp and significant headwinds from currency exchange rates, but we took advantage of a reasonably good leisure demand environment, particularly in Continental Europe, and leveraged the stable and supported used-car market in North America to deliver the highest quarterly earnings in our company's history. And at the same time that our teams throughout…

Thanks, Larry, and good morning, everyone. Today, I'd like to discuss our third quarter results, our fleet, our balance sheet and cash flow, and our outlook. My comments will focus on our adjusted results, which exclude certain items and which are reconciled to our GAAP numbers in our press release and in the earnings call presentation on our website. We had a record third quarter with the highest reported quarterly revenue and adjusted EBITDA in our company's history. Revenue grew 1% in the quarter and was up 8% in constant currency, reflecting both organic growth and our acquisitions. Adjusted EBITDA increased 3% on a reported basis and 13% in constant currency. Our trailing 12 months' adjusted EBITDA is $904 million, and for those analysts who compare company margins and valuations based on adjusted EBITDA before deferred financing fees and stock-based compensation, our 12-month adjusted EBITDA would be $56 million higher, or $960 million. In our Americas segment, trends in the quarter were generally consistent with our first-half results. Revenue grew 2% with rental days up 4%. Leisure volumes were solid, increasing 6% overall. Commercial volumes were unchanged. Adjusted EBITDA increased 1% and 4% in constant currency. Margins in our Americas segment declined 10 basis points in the quarter, due in part to the cost of our newest marketing partnerships. The margins benefited from 6% lower per-unit fleet costs and remained strong overall at over 15%. Our strategic initiatives to grow disproportionately in our most profitable customer segments and channels continued to deliver results. In particular, International inbound volume remained resilient, increasing 6% in the quarter despite the strength of the U.S. dollar. Demand for our non-core and Signature fleet, including BMWs, Mercedes, Cadillacs, and other premium vehicles, grew 10%. High-margin ancillary revenues increased 6% in the quarter in constant currency…

[Operating Instruction] Our first question comes from Chris Agnew of MKM Partners. You may ask your question.

Thanks very much. Good morning. First question is on your volume guidance. Did you see a deceleration in demand in fourth quarter or was third quarter weaker? And can you share some more color on what's happening in commercial demand, any color geographically or end markets. Thanks.

Good morning, Chris. Thanks. What we saw in demand, particularly on the commercial side, was a little bit of softening or really more of a continuation of softness in the second quarter. You really see it in Europe where the third quarter was very strong because that's driven by leisure, whereas the second and fourth quarters that are more of a commercial period are just softer. And I think in the Americas we've been, I would say, consistently just a little bit disappointed with where commercial volumes have been for us and based on what we see across the industry. We've heard some noise from GBTA and others in the travel industry that suggest it's not unique to us or the car rental industry, but it has been just a little bit of a softness 0.5 point here, 0.5 point there relative to our expectations and we saw it play out in the third and we're expecting it to continue in the fourth.

Thank you. And if I could have a follow-up on free cash flow, was there anything unusual in 2015 in terms of the cadence of free cash flow which is backend-loaded? And how would you describe the sort of near and present tuck-in opportunities that you see out there? Thank you.

Sure. Cash flow I think we've been pleased with. We're at $456 million free cash flow already, which is 90% of our expectation for the year. So we feel good about where free cash flow has been running. I think the inclusion of Maggiore may push a little bit more cash flow into the fourth quarter due to the timing of some VAT taxes in Europe and Italy in particular. But I think the cadence is one that we feel good about and should get us to right around $500 million for the year, which is consistent generally with our pre-tax income. On the tuck-in acquisition front, I think we continue to look for deals and a lot of what we're seeing in the pipeline looks like the deal that we mentioned in the earnings release, which is the acquisition of Avis Poland. It's about a $25 million deal. It's in a geography that's contiguous to where we operate. We think we have significant synergies there and it's going to be an attractive transaction. But a lot of the tuck-ins that we're looking at are in this, call it, $10 million to $60 million range. And I expect that to be the case a majority of the time over the next several quarters.

Thank you.

Thank you. Our next question is from John Healy of Northcoast Research. You may ask your question.

Thank you. Good morning and congratulations, Ron, David, and Larry, on the changes in roles and responsibilities. The first question I kind of wanted to ask was focusing on the commercial business again. As you look at that business primarily here in the U.S, are you seeing any – I guess maybe if you could comment on trends that you're seeing in major metropolitan cities, the Bostons, the San Franciscos, the New Yorks, the Chicagos, in terms of your commercial demand and try to give us some color on maybe how you're seeing companies like Uber and Lyft impact you directly in those markets and if that's really contributing to any of the kind of plateauing of growth on the commercial side.

Thanks, John. We talked about this fairly significantly on the last earnings call and, no, we're not seeing a significant impact. We've looked at this a number of ways, particularly in markets like San Francisco and Chicago and Boston and New York that would be more likely to see an impact, and if there is one, it's very slight. We continue to be growing in those markets. Our volumes are up year-over-year and we continue to believe that Uber and Lyft have a very significant impact on taxi replacement on that market. The impact on rental car has not been as significant, and based on a number of analyses we do, we would estimate the impact to be somewhere between zero and a few tenths of a point of volume this year. And it really gets to the fact that the core product offering that Uber and Lyft have is taxi replacement at a much higher cost per minute or per hour than car rental, and that makes a lot of sense for trips around Manhattan, trips that people typically aren't using car rental for anyway. And I think we are continuing to look at the impact on Zipcar where the use cases for Uber and Zipcar are much closer to one another and we do see there being a potential for some impact, but we continue to be excited about the possibility that public transportation and Zipcar and Uber and taxis and car rental, in combination, will provide a range of transportation options to city dwellers and people living on college campuses that can allow those people to put off buying a car and take advantage of Zipcar and the other things that are out there to be utilized. We do think that's an important growth opportunity for the future, even as some of the use cases in that space overlap with one another.

Great, thank you. And just one follow-up question. I wanted to ask about maybe some preliminary expectations for how we should think about free cash flow for the next couple years. And I know you guys have been able to really take advantage of tax planning to help free cash flow. And just your thoughts on maybe cash taxes for the next couple of years in terms of how you're planning those?

Sure. We've spoken for a while about the fact that our adjusted pre-tax income is a pretty good proxy for free cash flow and I expect that will continue to be the case. We're not a federal cash taxpayer in the U.S. I don't expect to be for the next several years and cash taxes for us would be state and international taxes, which will probably continue to be, going forward, in the $50 million to $70 million range, give or take a little bit. And that should allow us to continue to have free cash flow that's generally in line or in the neighborhood of our adjusted pre-tax income.

Thank you.

So in short, no real change in our outlook for free cash flow compared to where it's been running. It should continue to grow with our adjusted EBITDA.

Great. Thank you.

Thank you. Our next question is from Chris Woronka of Deutsche Bank. You may ask your question.

Hey, good morning, guys. Want to ask if you saw any maybe changes in any booking behaviors, either throughout the year or even more recently in terms of maybe the length of booking or the channels they're being booked through. And then also if maybe you could give us a little bit of an idea of the cadence of your demand in the third quarter and if you care to talk about October at all? Thanks. Larry D. De Shon - President, Chief Operating Officer & Director: This is Larry. There's really been no, I think, no change in the segments of how our bookings come through or the – we watch as far as how far out bookings come in and how far out they come out two months out, four weeks out, three weeks out, two weeks out. We continue to monitor that. We continue to monitor it by market and we really haven't seen much shift in that at all I would say in this quarter or really looking forward. As far as it relates to how October looked and how the rest of the year is looking, I can comment a little bit about international bookings are looking still pretty good. We're still booking year-over-year up pretty healthy and so that's I think a good opportunity for us as we look into the fourth quarter. We're expecting our fourth quarter to be up over last year as fleets continue to really normalize against demand versus last year where we were pretty much over-fleeted in the industry internationally. So things are looking pretty good there.

Okay. Thanks. Just a question on the pricing increase you mentioned from the competitor. How should we think about that in terms of that supposedly went in for the fourth quarter and we would think you guys probably matched? Is that something we see more of an effect of in 2016 or are you potentially being a little bit conservative on the pricing outlook or any color there? Thanks. Ronald L. Nelson - Chairman & Chief Executive Officer: Chris, it's Ron. The pricing increase that was put in in October, I think you're correct. We matched as did everyone else. But, as you know, these things all tend to have a decay curve that ranges from anywhere from four days to three weeks. And so I think the pricing that we expect for the balance of the year is going to be pretty much like the pricing that we saw in the third quarter. I don't expect much change and it would be unusual for a price increase that took effect in November to have some impact in 2016. I think the things that are going to impact 2016 are the things that always impact it: margin pressure from increasing fleet costs and cost pressure from inflation. And I think the good news on that front is that I think for the first time in a long time we've moved into what I would call is a fairly stable environment and everybody seems to have their fleets in sync with demand. Everybody has cost pressures probably relating to residual values over the course of the next few months, and everybody is going to have inflation affecting their P&Ls. And so historically this industry has always gotten price increase when there's been cost push and I don't think any of us expect that to change. But I think in terms of the near-term price increases, the impact they're going to have on the entirety of the year in terms of pricing is not going to be terribly significant. Most of our opportunities will come from yielding as we go into the last two months where we have two holiday periods that tend to pump up demand and give us an opportunity to yield.

Okay, very good. Thanks, guys.

Thank you. Our next question is from Kevin Milota of JPMorgan. You may ask your question.

Hey, good morning, guys. Two questions for you. First on the pricing side of things. If you could give us some color on what happened in October in the Americas and then also if it's possible to give us the monthly year-over-year comparisons for the fourth quarter, so October, November, December? And then, secondly, appreciate the color on the fleet costs for next year. With what you've said and kind of what your view is on negotiations, should we be modeling kind of a low single-digit increase in fleet cost or is it more of a mid- to high-single digit increase? Appreciate it.

Sure, Kevin. As we look at pricing, we're not going to get into a month-by-month discussion. Obviously the way calendar falls can impact that. But when we look at the fourth quarter overall, we really are expecting the trends to be consistent with what we saw in the third quarter. Ron walked through the fact that there are two holiday periods that will be particularly interesting to watch, the rest of the quarter ends up being dominated by commercial travel and that's really what should drive a lot of the consistency with what we saw in the third quarter. On fleet costs, as I mentioned in my comments, we're continuing to work through it right now, and I do expect that we'll be looking at fleet costs that are probably at or above 2014 levels next year, but we're not ready to go out with a specific range yet. We still have some work to do and we'd like to see how the used car market plays out over the next two or three months before we pin down our assumption on residual values as a percentage of cap costs in 2016.

Okay, so the comments on 2014 levels is looking at percent of cap costs in the similar range?

No, that's on a per-unit basis and this year obviously we're down 3% and down 2% in constant currency. So we were at $310 per unit per month last year and this year, as I mentioned and we mentioned in the earnings release, we're going to be closer to around $300 with about $3 of the decrease due to currency.

Okay. Thank you very much. Appreciate it.

Thank you. Our next question is from Anj Singh of Credit Suisse. You may ask your question. Mark Wallach - Credit Suisse Securities (USA) LLC (Broker): Hi. This is Mark in for Anj. Just a question on the Americas fleet growth. If you can comment on some of the moving parts there, I know it was less than 1% growth this quarter. I know you mentioned that the timing of dispositions played into that, but can you also comment on how much of that and the utilization improvements are due to your robotics and analytics tools versus a concerted effort to rein fleet in? And also, how should we think about that going forward?

Sure. Utilization improved by a little over 200 basis points this quarter compared to third quarter 2014. About three-quarters of that was due to the recall issues that we had last year and the need to hold on to additional fleet to accommodate the recalls. The remaining 50 or 60 basis points was really due to the combination of our demand fleet pricing tool and our rigorous management of the fleet from location to location. I really view those two initiatives as being part and parcel of each other in terms of managing the fleet to be in line with demand. But when you look at the utilization improvement we had in Q3, it was larger than we would typically see because of the recall issue last year. But even when you back out the recalls, there was more than 0.5 point of utilization improvement from DFP and fleet management in the Americas. Mark Wallach - Credit Suisse Securities (USA) LLC (Broker): Got it, thanks for that. And also wondering if you can comment on the competitive environment. I know you spoke about price increases that were implemented, but from our channel checks it seems that in general your competitors are behaving pretty rationally. So just curious if you are seeing that as well and if there are any significant share shifts you are seeing that you would call out.

Yes, Mark. As I think I said in my earlier answer, it does feel like we've moved into a period of relative stability here and to use the word rational behavior I think is probably true. I think that the markets remain competitive. They remain particularly competitive in the commercial space. And I think that from a share standpoint, the share shifts that have gone on have been going on – have gone on for about a year and I think that they have essentially stabilized right now over the last couple, three months. We've basically maintained our share and Enterprise has gained share at the expense of Hertz. I think a lot of that has to do with the shift in insurance replacement business and not in terms of actual account losses. But I think it's going to be an interesting year ahead of us, because I feel like we all now have got in a period of stability. We are all playing on the same field in the same way and we will see what sort of business unfolds from that. Mark Wallach - Credit Suisse Securities (USA) LLC (Broker): Got it, thanks a lot.

Thank you. The next question is from Afua Ahwoi of Goldman Sachs. You may ask your question. Afua A. Ahwoi - Goldman Sachs & Co.: Thank you. Two questions from me. First, maybe following up on the question that was asked earlier, and I'm actually curious; given fleets are rational – as you said competitors are behaving rationally, you and your peers are taking price increases, you saw utilization improvement, why do you think we are only seeing 1% or so increase on prices, if that? And I know you talked about this at the K curve and you raised it in the K, but to some extent the industry controls at the K, so what will it take to see maybe a little more than 1% or 2%? And then my second question was actually on the marketing expenses and the commissions increase that you talked about in the press release. Given the guidance you have for the full year, it suggests there is still some cost pressures in 4Q. And what's driving that? And is that a one-time impact? Will it go away after this year? Maybe you can walk through that a little bit. Larry D. De Shon - President, Chief Operating Officer & Director: Sure, Afua. On the first front, Ron talked about the emergence of stability in the third quarter. Fleets being in line for really the first time in 9 months or 10 months and there being not the recall issues that we had, no significant movements of major accounts and as a result, I think the emergence of stability across the industry in the third quarter was a new phenomenon compared to what we have been going through over the prior quarters. And I for one don't think that that stability gives rise…

Thank you. And our final question is from Brian Johnson with Barclays. You may ask your question.

Yes. First, I want to congratulate Larry. Want to drill in a little bit on pricing versus what in other product categories we might call mix within the Americas. So your leisure pricing down 1% – excuse me up 1%. Within that, though, you flag International inbound up 6%; Signature, which I assume is largely leisure, correct me on that, up 10%. So it seems like within that 1% you're actually getting a mix benefit from these product lines. Give us a sense of how important that mix benefit is? And if we were just to take a Fusion-to-Fusion, Camry-to-Camry kind of base pricing, what's the real trend there?

Sure. The International inbound on a rate basis isn't a big driver of mix. It helps from a profitability standpoint, but it tends to be longer length of rental, and as a result the average rate associated with it doesn't drive a particular mix benefit. It does help with our ancillary growth. On the Signature and the non-core fleet, yes, we have had a mix benefit over the last several years. I think it was more significant this year – more significant last year, sorry. This year it's several basis points, but it's not the principal driver of our pricing. I would put it in the fraction of a point category overall because our non-core car class growth was much greater in 2013 and 2014. This year we're tweaking around the edges. We've been able to add a few new high-end manufacturers, which is helpful, but it's not the driver of pricing that it was in 2013 and 2014.

Okay. So that sounds like there's about 75 basis points of real kind of hedonically adjusted, if you will, price in leisure. Second question is just around some of the franchisee income coming through international. Is there any way to quantify that and the types of currencies that's exposed to because it does look like the incremental margin on your currency movements was greater than the average in that sector?

Yeah, currency movements have some timing issues and, in particular, the UK pound, euro rate has moved a fair amount, which has an impact on us. Particularly since we have a disproportionate amount of our European cost in the UK, and a little bit less in Continental Europe, so we see some noise associated with that expense mismatch that we're partially hedged for, but not fully hedged for. And so that's some of what's driving the movement from a $43 million headwind the last time we spoke to about a $50 million aggregate headwind on EBITDA. And I think the licensee income is exposed to almost every currency imaginable, so as a result, we're fairly well diversified. We've seen our licensee income up very slightly year-over-year in our European business, which obviously has licensees in the Middle East and Africa as well. So, I don't see currency impacts having a new impact there, but clearly the strength of the U.S. dollar relative to most currencies is part of what's creating pressure year-over-year.

Okay. And then you sort of mentioned earlier that sort of pricing discipline isn't going to materialize overnight. I mean, what are the things we can look for in the marketplace or in competitive behavior and announcements, especially within investment day coming forward that might give some indication that there might be, especially on the corporate side, pricing improvement?

Yeah, I expect the commercial side, the large commercial and midsize commercial accounts to continue to remain very competitive. And I think what you'll continue to see is a lot of this will play out in the uncontracted – the push for increased pricing will play out nearer term in the uncontracted space, so the 50% of our business that's leisure, and the additional 20% of our business that's uncontracted commercial business. I think those spot market transactions are where we'll see the most action. And as I mentioned, I think the best times to follow that will actually be when demand is relatively strong compared to fleet levels. And you'll see that in holiday periods and we'll see it in various markets from time-to-time, depending on which football teams are in town and what events are going on. And we're going to play for the big peaks and the mini peaks and the local peaks as aggressively as we can to get the pricing we deserve, particularly when demand is strong relative to the supply vehicles.

Okay. Thanks.

For closing remarks, the call is being turned back to Mr. Ronald Nelson. Please go ahead, sir. Ronald L. Nelson - Chairman & Chief Executive Officer: Thank you. So before we close I think it's important to reiterate what I believe are the key points from today's call. First, we delivered record quarterly results despite facing a tough year-over-year pricing comp and significant headwinds from currency exchange rates. Second, we do expect 2015 to be our most profitable year ever. And third, we repurchased more than $160 million of our shares in the quarter and now anticipate repurchasing meaningfully more than $300 million this year. And finally, as I plan to turn over the CEO reins to Larry in the coming weeks, I want to thank all of you for your support over the years. I firmly believe the company's best years still lie ahead of us and look forward to watching Larry, David, and our entire senior leadership team, take our company to even greater heights. With that, I want to thank you for your time and interest in our company and wish you all the best to the holiday season.