Good morning and welcome to the Avis Budget Group First 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.

Good morning everyone and thank you for joining us. On the call with me are Larry De Shon, our Chief Executive Officer, and David Wyshner, our President and Chief Financial Officer. Before we begin, I'd like to remind everyone that the company will discuss any 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 our adjusted result 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 our Avis Budget Group's Chief Executive Officer, Larry De Shon.

Thank you, Neal, and good morning. We expected the first quarter would be challenging with many of the issues that affected us toward the end of 2016 persisting into the first quarter of this year, but we didn't expect it to be as difficult as it turned out. Volume did increase both in the Americas and internationally, but industry fleet levels remained elevated relative to the available demand, which put pressure on pricing. And with Easter falling in April this year compared to March in 2016, the pressure was even more pronounced. At the same time, used car values in the Americas were weaker than expected, causing our per-unit fleet cost to increase considerably. As reported by the National Automobile Dealers Association, the typical seasonal upswing in used car values did not occur in February of this year as is usually the case, but was delayed into March, further impacting our results for the quarter. The good news is that many of these factors appear transitory. Volume trends improved in March and demand and pricing for Easter were real solid, creating a record April for global revenue and rental days. We're seeing indications that industry fleets have begun to firm up and used car values have stabilized above their February lows. So looking forward, we feel optimistic that the industry dislocation we've seen over the past few months could largely be behind us by the time we get to the summer. Meanwhile, in the face of higher fleet costs, we took a number of actions to reduce expenses in our field operations, shared services and general and administrative functions around the world. We expect these restructuring actions including a voluntary termination program to produce more than $50 million of cost savings this year without impacting our ability to deliver the…

Thanks, Larry, and good morning, everyone. Today I'd like to discuss our first quarter results, our fleet, our balance sheet and our outlook for the remainder of 2017. My comments will focus on our adjusted results which are reconciled to our GAAP numbers in our press release and in the earnings call presentation on our website. As we reported last night, our quarterly revenue declined 2% from the prior year to $1.8 billion, driven by a challenging pricing environment in many parts of the world, soft commercial travel demand and the effect of having one fewer day in the first quarter due to last year having been a leap year. Adjusted EBITDA declined to a loss of $27 million in the quarter, primarily due to global pricing pressures, coupled with higher per-unit fleet costs in the Americas. Our adjusted loss per share during the seasonally slower and lower margin first quarter was $0.94. Revenue in our Americas segment declined 4% year-over-year in the first quarter, driven by lower pricing. Volume increased 1% with leisure rental days up 1.5 points and commercial volume consistent with last year. Pricing in the Americas declined 4%. We saw pricing pressure throughout the quarter, which we believe reflected industry fleet levels that continued to be high relative to demand. Both leisure and commercial pricing saw similar declines. We kept our fleet in line with our volume as our fleet utilization was virtually unchanged year-over-year. Adjusted EBITDA in the Americas declined to a loss of $20 million in the first quarter, primarily as a result of soft pricing and higher per unit fleet costs. Revenue in our International segment grew 2% in the first quarter or 3% excluding currency effects despite the Easter holiday moving into the second quarter. Volume grew 7%, offset by a decline…

Thank you. We will now begin the question-and-answer session for today's conference. For our first question coming from Mr. John Healy from Northcoast Research. John, the line is now open.

Thank you. David, I wanted to ask a little bit about the $50 million cost reduction plan. Was hoping maybe you could give us some color in terms of kind of how the plan came about, the pace at which that happened, the timing in terms of which those costs will come out and maybe the facets of the business that those costs are coming from.

Hey John, it's Larry. I'll take that question. I think as we started to see the residual values and the pricing unfold in the first quarter, we got on to where we could go in the business to reduce costs and drive a little more revenue in different areas, so we started really jumping on this at the very beginning of the year, at the end of January, beginning of February and it's really across a number of different initiatives. I think if you look at the organization, we really worked hard with our leadership team here to really think of ways that we could streamline the organization to take some costs out, also maybe do away with some of the work that we were doing that wasn't really the value added that we were looking for and not really focused in the areas that we're really pushing for strategic initiatives going forward. We implemented a voluntary termination program with people that were over 15 years of seniors can elect to enhance – receive an enhanced severance to leave the company. We were able to choose which ones of those we accepted, and so what we really did was look for opportunities where we would streamline the organization to not replace that position or replace that position with a lower cost position in the organization or to redistribute that work in another way. We literally come through hundreds of expense lines to make sure that we really understood what we were spending, where and when and make sure that that was appropriate. And really just reviewing our suppliers' performance and making appropriate adjustments there, our procurement department has been reorganized and is now global and is finding new opportunities moving forward. So there's a whole host of different things that really – that we've really been working on hard since the first – kind of in the middle of the first quarter.

And then John, in terms of how that plays out over the course of the year, I would see us getting a partial quarter benefit this quarter and full benefits in the third and fourth quarters. So ballpark think of it as $10 million, $20 million, $20 million over the last three quarters of the year. And the one thing I'd add is that as we went through this process, the only sacred cow, if there was one, was the customer experience where we're dedicated to saving money in ways that will not negatively affect the customer experience. Beyond that, I would say virtually everything was on the table.

Got you. And then Larry, I was hoping you could talk a little bit more about a comment that you made about industry fleet levels, and I feel like there's always attention on industry fleet levels, but maybe not a lot of discussion of what the industry is buying. And I think you mentioned that in 1Q, you actually saw the industry reduce its buy from the manufacturers on fleet. Can you talk a little bit more to kind of what you're specifically looking at there and if you have any color of maybe what you're hearing from the manufacturers of what maybe 2Q or what April looked like?

Yeah, I think when you take a look at how the industry's deflated over the first quarter and what's been going on at the auctions, obviously there's been a lot of cars in the auctions. The auctions were up significantly year over year with rental fleet that everyone was trying to push through. And I think as that works through, we're – and we take a look at fleet tightness as we're in the second quarter now, although there are markets that are starting to tighten up, it's not at the levels that you would want it to be kind of this time of the year. So our expectation is that it's going to take a few more months before the fleet levels really get aligned to the demand; so we're really thinking more summer as we go into summer. But you couple that with the fact that all the data points that we have tells us that the industry overall registered fewer cars in the first quarter compared to last year. The data we have for January and February really puts the industry down almost 10 points of cars being registered in those two months, and then reports we've read since then about March is even a larger decline year over year. So I think the combination of the two things where we see cars being pushed into the auctions, they're having record number of rental vehicles going through the auctions in the first quarter going into the second quarter, combined with the fact that registrations are down should bode well for a good level – the right level of fleet to demand as we go through the summer.

Great. Thank you.

Thank you. Our next question comes from Mr. Chris Woronka from Deutsche Bank. Chris, your line is now open.

Hey, good morning guys. Want to ask you, as the first quarter unfolded and the residual values continue to weaken relative to your, I guess, initial expectations, does that make you change – when you start thinking about next year, does that make you change anything in terms of risk mix or make and model mix?

That's really the beauty of having fleet optimization tool because you can run several different scenarios with that tool that will really give you the best recommendations as far as what you should have as far as on the risk mix or buybacks. So even though fleet costs increased, we would run that increased cost through the module as we look at our future demand, and that will tell us whether we have an opportunity to take advantage of more program cars or less program cars, more risk cars based on how those negotiations start to unfold, which we're in the middle of now, so we don't really know yet. So that's the beauty of having this tool that you keep plugging in the data points that you know, and that really tells you how to rotate your fleet, what type of fleet to buy, what car classes to buy to meet the demand and how to rotate them in and out. So that's – it's just a constant iteration. And our team that's been doing this for a very long time and the expertise that they've built up helps us really analyze all the data points to really get to the best answer that we can. So of course over time if the output is that we should change the mix, then that's what we'll do.

Okay, great. And just quickly to follow up on that prior question, appreciate the data points about the new registrations and the level of volume you're seeing at the auctions. I mean, I guess when I added that up kind of on the spot real-time, it would suggest the industry would be less fleeted than I guess it still is. How long do you think that takes the kind of those cumulative effects to kind of take effect going forward?

It's hard to tell. I mean, the data point that we really use is just what do we see as it relates to fleet tightness in the marketplace by our competitors, and that's really the benchmark that we can work on and we look at that every single solitary week to understand where are we starting to see fleets tighten up, and are they routinely tightened up, so are we seeing it week after week after week? And as I mentioned, at this point in time, although we are seeing markets start to tighten up, are we seeing them tighten up to the degree that we possibly – that we'd like to see them? And of course the issue that you're – that we're in now is that we're in May, and May is always a difficult month because Easter is over and we're waiting for summer and there's just not a lot that people will do with fleet that they need to hold in for the summer. So as we're still trying to sell cars, obviously for cars that we intended to de-fleet at this point, May is just a very trough month, and we just have to kind of get through that and then get into the summer period where we can start to really start to see fleets really kind of equalize up to demand.

Okay. Great, thanks.

Thank you. Our next question comes from Chris Agnew from MKM Partners. You may ask your question.

Thanks very much. Good morning. I was hoping to get a little more color on the pricing outlook and how you thought about providing the revised outlook. And I'm trying to square away your optimism for the summer with the outlook. And does that, for the second quarter, are you now implying that pricing will be or could be down a similar magnitude for the first quarter? Thank you.

Good morning, Chris. I think with respect to the quarter, what we're saying at this point is that we expect pricing to be down. I don't think we're going to – we typically had stayed away from particular point estimates for the quarter. And I think we're going to stick with that approach here. But based on what we're seeing now, we do expect it to be down. In many ways, what we're looking for as the year plays out is some similarity to last year where the first quarter was particularly difficult and then the environment improved and particularly and we're strongest in the summer months which are the most important ones for us from an earnings perspective. And as we look at the various data points about fleet and the experience we've seen in the industry over the last year, those all suggest that the summer should be a better time in terms of fleet tightness and ability to get pricing and yield up. And as we move into June and the summer, we think that will have the greatest impact. So while we do expect Q2 to be down, in many ways, the overall trends that we're looking at are somewhat similar to what we experienced last year.

Thanks. And then can I confirm – you were talking about your residuals down 3.5% versus a year ago in the first quarter. Can I confirm that's as a percentage of cap cost? And you talked about an improvement in April which has been sustained. So what was – can you provide what you saw in April and then why – what's baked into your assumption that that will worsen at some point for the rest of the year? Thanks.

Yes. When we talk about a 3 point to 4 point decline or – and the 3.5% in the first quarter, that is as a percentage of cap cost and that is the way we look at things. In terms of our experience in April, when we look at our results for the cars that we sold, the gain or loss associated with our dispositions in April was very close to what we experienced in March. And that's what drives our commentary about relative stability in the used car market in April compared to how things were operating in March.

Thank you.

Thank you. Our next question comes from Mr. David Tamberrino from Goldman Sachs. You may ask your question. David Tamberrino - Goldman Sachs & Co.: Great. Thank you and good morning. Just following up on that pricing question. As we've progressed through the first quarter and you saw de-fleeting, did the negative pricing environment improve, so to speak, say go from the negative 5%, negative 4%, negative 3%, or was it deteriorating as the first quarter progressed?

I would describe it as relatively consistent over the course of the quarter, and couple – and part of that certainly is the effect of Easter moving around, which made some of the weeks particularly in March not really comparable or easily comparable to the prior-year period. David Tamberrino - Goldman Sachs & Co.: And then following up on that, we did have the Easter shift and we're through April. Did you see any positive sequential pricing movement as a result of that Easter demand or has it still been just the industry over-fleeting issue (37:12)?

Yes. Certainly as we moved into the period right around Easter and the mini-peak that that was helpful on a year-over-year basis and then some of the other weeks in the month looked fairly similar to March, which we'd expect since the fleeting situation in the industry wouldn't be all that different in the non-Easter weeks of April than it was in March. David Tamberrino - Goldman Sachs & Co.: Understood. And then a second question as it relates to, as you start thinking about your 2018 fleet purchases and your negotiations with OEMs. I know it's very early, but the OEMs have a growing problem on their captive finco balance sheets with the amount of leasing that they did up and through the first half of 2016 came to a peak. So we should continue to see off-lease vehicles coming back to them over the next three years. As a result, we've seen them conscientiously pull back on selling vehicles into the daily rental channel. My question to you is, as used values are expected to continue to decline, do you expect to be able to get price breaks or lower prices from the OEMs on an upfront that helps you manage that spread or as a result of what the OEMs are currently employing as a pullback from the daily rental channel that those prices may stay flat and the used residuals will still continue to be a headwind as we go forward into 2018 and 2019?

David, you've done a good job of laying out the range of important dynamics that are going on in the marketplace and those are informing how we approach the negotiations that are going on right now and certainly are, I'm sure, are informing how the manufacturers are going about those discussions with us. I think we – it's early. We feel reasonably good about how things are going in those discussions so far. In particular, I think we'll be able to get the cars that we need, but it's really just too early in the process to know exactly how it's going to sort out in terms of cost increases or decreases among the various manufacturers. As you point out, it's a pretty fluid situation right now and a lot of important dynamics going on.

And in that context, I think we're going to want to wait to see how things play out for a few more months before we provide some more detailed commentary. David Tamberrino - Goldman Sachs & Co.: That's fair. But is there anything right now that you're seeing in your purchases that would indicate that the OEMs are firming on their prices and kind of holding the line given the amount of, again, off-lease vehicles and supply that's going to be coming back to the market?

All I'd say right now is that there's nothing unusual about where we are in negotiations at this point in the year. David Tamberrino - Goldman Sachs & Co.: Okay. Thank you very much, appreciate your time.

Thank you. Our next question comes from Mr. Brian Johnson from Barclays, you may ask your question.

Yes. Good morning. I've got a couple of questions on, just following up on that buy side (40:41) and then another about the demand forecasting and just airport trends. On the fleet side, are you getting opportunities to do tactical purchases? It's not lost on us that SAAR has been weak for a couple of months. And we have some aggressive OEMs out there who more and more optimistic for the year. Is that presenting (41:06) some tactical opportunities? And if so, is that creating risks that some of our competitors may wind up with too many cars?

Like every year, Brian, we take a look at opportunities as they come up through the year. Obviously, you're going to want the cars. If they come to you and offer cars, you're going to want them. If you're going to take them, it means that you really need them in your fleet. So at this point, we're not in the market to really be taking anything additional, but we'll be looking at opportunities as the rest of the year plays out and they usually present themselves year after year, so we'll just have to wait and see how it plays.

Okay. Second question, when you look at the airport, reservation, cancellations, just all the – number of people passing, deplaning at airports. Are you seeing anything that will help you better forecast demand and other fluctuations in demand from people, say, landing in an airport and decided to Uber or Lyft to their destination instead of renting a car?

I wouldn't say there's anything of the extraordinary that we would normally look at as we look at how deplanements are happening. We look at volumes by airport. We look at our share every month by airport, how we do. We continue to try to get our fleet right-sized to what that demand is that we're forecasting by market. We go through those reviews with the locations every single week. So nothing has really changed as we take a look at that. There's no big surprises and no shows or any of those types of things that are already built into our model.

And if you look at a metric of deplanements to rental volumes, maybe one for those airport sectors, total rentals for your competitors. Any trends there?

No I think as you look at deplanements and what the mix is of the customers in those deplanements, as leisure grows, obviously that gives less opportunity for us than commercial. But once again, we build these into the models. We look at how we performed against the models; we adjust them as we go. And there's just really nothing of any significance that's really changing that we need to be concerned about at this point.

Okay, thanks.

Thank you. Our next question comes from Mr. Anj Singh from Credit Suisse. You may ask your question. Jeffrey Lee - Credit Suisse Securities (USA) LLC (Broker): Hi, thanks, this is Jeff Lee for Anj. As we look at your guidance, what sort of impact is being baked in as a result of your strategic initiatives? Is there any lift to EBITDA in 2017 from these efforts that we should be looking in 2018 for a bit more tangibility and we'd appreciate any more color you can offer on your progress, perhaps what's going better than expected and what may be a bit tougher to extract than you planned?

Good morning, Jeff. Thanks for the question. As we built our 2017 plan and we've talked about this a fair amount on the last call, we built in significant benefits from our initiatives, the strategic initiatives that we talked about in detail in November. Some of the big benefits are coming from our manpower and shuttling initiatives. We went into the year expecting about a $40 million benefit from those. We've continued to push – to generate more and we now see that we now have about a $50 million improvement from those initiatives alone coming through our numbers this year. We're spending in some areas, particularly with respect to Connected Car and Avis Now self-service capabilities, and those are investments we're making in the P&L this year that offset that a little bit. But we've continued to deliver significant benefits from our strategic initiatives, and in fact, those have grown a bit as we've worked through things so far this year.

Great. Thank you. Turn it back over.

Thank you. Our next question comes from Mr. James Albertine from Consumer Edge. You may ask your question.

Great. Thank you, and good morning. Lot of the questions that have been asked were sort of on our list, but one maybe in a sort of a different vein, ask a more strategic long-term question as it relates to pricing. And I'm wondering if you were to take maybe a five-year outlook, how can pricing work higher from here? And if you can help us delineate, it sounds like a lot of what you've described in the first quarter, cyclical, maybe some issues with respect to inventory, competitors or what have you. But I'm wondering if there's something bigger structurally or that's more permanent of a shift that you're working against or any data to support there's a more permanent shift pressuring pricing as well that we should be aware of?

I think there's a couple things in there. One of all, I think in the short term, what really needs to happen is for the industry to really get its fleet right-sized to demand. And I think everyone's working to do that, based on what we're seeing as far as car sales are concerned, and registrations are happening. And we haven't really seen a period of time here for a while where that rightsizing of fleet industry-wide to demand has really been there and has been sustained. So I think that's the first challenge, and I think that that is something that will play out and get there. I think the second thing is that for a while, we've not seen pricing offset fleet costs. And all the car rental companies are buying the same cars from the same OEMs and selling them into the same marketplace and obviously encountering the same fleet costs. So I think that there would be a strong motivation for everyone to try to recover that fleet cost. And we saw – we put in a few price increases over the first quarter. And one in particular did pretty well and lasted actually for a couple of weeks, and that was a price increase we put in, in March for April. Obviously April being a busier month, fleets would be tighter. There was more matching of that price increase that we've put in place in March. So I think that there is a desire by the industry to want to recover fleet costs. And then I think strategically, as you look at the long term, the work that we've been doing with our Demand-Fleet-Pricing system to be also allow us to be able to forecast further out and optimize both our demand and our fleet to try to yield to the best pricing opportunities that we possibly can. So if you can get – if the industry is in an environment where fleets are more aligned with demand, and then you've got technology that allows you further out to be able to assess how that demand and fleet will play out, it gives you an opportunity to make decisions earlier on about where you want to set pricing to really optimize for those opportunities where you can yield higher and get higher price for the demand. So, I think those things playing all together gives us an opportunity over time to be able to start to see price improve and be able to be more strategic and plan for (48:52) how we get it in an environment where fleets are more aligned to demand.

And James, to your question about some of the analysis and data we've done around this. This is certainly an important question and one that we've done a fair amount of work on, all of which supports the points that Larry just made. And in particular, when we look back over the last 5 and 10 years, we see a strong correlation between pricing and per-unit fleet cost changes. And what's interesting about that, as we work through the analysis, the strongest correlation tends to exist with pricing, following fleet cost increases on a 6 to 9 month lag. And those correlations are fairly solid, but they're stronger with either a 6 or 9 month lag built in there on pricing. So I think the other point to make is that some of those historical periods had a larger number of players in the car rental industry, who were – who had different mixes of fleet split between risk and program and very different mixes by manufacturer. And as we look at the industry now, not only are there fewer players, but as Larry pointed out, everyone is buying cars from the same folks in somewhat similar proportions. And as a result, we see more similarity of fleet acquisition among the various players in the industry. And in that context, my expectation would be that the correlation that existed in the past would be – could be even stronger than it has been, and that's part of the reason why we do expect pricing to benefit or help offset some of the pressures that we've seen on the fleet cost side over time.

That's certainly very helpful color, and I appreciate it. And if I may, just another strategic one while I have you. From an acquisition standpoint, or maybe better way to ask this is build it versus buy it, right? As you think about your strategy of developing initiatives to help grow your addressable market over time, improved pricing and improved cost controls and so forth. There's been some movement, it seems, in the Ubers and Lifts of the world, share shifting perhaps. Do you see in the, maybe, two or three-year horizon, a potential to buy into other segments of the sort of broader shared mobility or ride-hailing sector? And how should we think about acquisitions sort of ranking in your schedule of capital allocation priorities? Thanks.

If you go back to our acquisition of Zipcar, I mean, it was really the first place that we – we were the first ones to really look at this as an example of getting into a broader mobility world than rental car. So obviously, we are open to any acquisition or partnership that would make sense in the broader mobility landscape. And we constantly talk to folks that are in that area to see where we can align, where we can partner, what synergies we may have between the two of us, and whether that includes an acquisition or not. So of course we're really open to those opportunities going forward. As far as the acquisition pipeline, I would say it's pretty small at this point. We still look for tuck-in opportunities where they make sense. There's still some licensees out there that when those are available would make sense. But right now, I would say the acquisition pipeline is not large at this point.

Okay, great. Thank you again, and best of luck in the second quarter.

Thank you. Our next question comes from Mr. Michael Millman from Millman Research Associates. You may ask your question.

Thank you. Could you talk about what you're seeing in the, what I'd call, the energy markets in terms of demand, in terms of price, and how that affects the totality of what you're doing? And sort of related to that, can you talk about what you're seeing in the corporate markets in terms of also demand and price? And then one other sort of unrelated question. Given your tax status, what would be the – assuming the corporate tax goes down 15%, what kind of benefit, if any, would you receive?

Good morning, Mike. You snuck in a four-parter on us. Let me try to tackle it. With respect to the energy portion of our business, energy and energy-related customers represent 10% to 15% of our overall business. And I think what we've seen there is certainly that part of the economy, that part of the travel sector has stabilized compared to where it was 18 or so months ago. But we would describe it as having stabilized at a reduced or a depressed level compared to where it's been over a longer period of time. So it's not really a drag on our growth. But when we look at things over a longer period of time, we're not seeing as much business from that sector as we would have a few years ago. On the corporate side, I think demand has been okay, but a little bit soft at the same time. We have the sense that there are pressures on corporate travel budgets from a variety of sectors, including the financial services sector, number one. And number two, as we saw the GDP report come out for the first quarter where growth was a little bit less than people had expected and less than we had seen in the second half of last year, that seemed to us to be consistent with what we were seeing and feeling in terms of commercial travel demand, that it was okay, but not as robust as it might have been. On the commercial side, I would break it into two components, one being the contracted commercial pricing for large commercial accounts. As we've discussed in the past, that has been extremely competitive and it remains that way. And then on the uncontracted side of the commercial business, that tends to be spot or by definition, it's uncontracted. And as a result, it tends to move with leisure pricing. So it was impacted in the first quarter by the over-fleeting that existed in the industry. And when leisure pricing is soft, we'll typically see that uncontracted commercial pricing faces some of the same pressures. And then lastly, on the tax front, I think there are a number of different proposals out there, so it's hard to know exactly where things would land. But if we look at a reduction in the corporate tax rate on a standalone basis, I think the impact would be a positive in terms of our effective tax rate. So it would be helpful to our adjusted EPS numbers. I don't think it would have any significant near-term impact on our cash taxes because we're not a federal cash taxpayer currently.

Thank you.

Thank you. And for our final question coming from Mr. Yilma Abebe from JPMorgan. You may ask your question.

Thank you. Good morning. My question is on your fleet debt. With the volatility and residual values, are you seeing any increase in investments required at the fleet level? Or even higher rates that you may be paying at the fleet debt level? And if the answer there is no, could there be any sort of, I guess, triggers to require you to pay higher enhancement levels as residuals move around?

Good morning, Yilma. The answer is no. There have not been any significant changes in how our fleet debt is working. We issued asset-backed debt at an average rate of around 3% in the first quarter. We saw good demand for that paper. Advance rates continue to be strong and haven't really changed. And no, there haven't been any significant pressures on us to make adjustments to any of our enhancement levels. And I think the key issue to be aware of is that our fleet depreciation, which is running through our P&L is effectively a cash cost for us. So as we depreciate cars at a higher rate to take into account softer fleet residual values or have any losses on disposition, those actually end up operating effectively as cash costs where the lease payment we pay to our fleet financing structure increases. So it doesn't necessarily change the – it doesn't change the advance rate, but it does create a situation where the effects that you see running through our P&L in a quarter like the first quarter where fleet costs were up, a lot of those are felt in the fleet financing facility as well. And that tends to keep things stable with respect to the fleet financing facilities over time and doesn't require dramatic changes in enhancements.

Okay. Thank you for that. That's helpful. And then my follow-up is as you sort of foresee the volatility both on the pricing and the cost side and as you sort of look at your leverage targets, three to four times, any thoughts around sort of revisiting the appropriate level of leverage for this business given the current environment? And specifically, with expectations for $300 million cash use for share repurchases, any thoughts around perhaps reducing debt in this current environment?

Yeah, as I mentioned, we remain committed to keeping that leverage in the 3 times to 4 times range. We prefer to be in the lower half of that range. And the key for us is delivering EBITDA that allows us to move back down toward the middle of that range as the year progresses. We started the year at around 3.6 times, and I think as we deliver better LTM EBITDA than where we are right now, we have the opportunity for our net leverage to come down while still using a significant portion of our free cash flow for share repurchases.

Thank you. For closing remarks, the call is being turned back to Mr. Larry De Shon. Please go ahead, sir.

Thank you. So, before we close, I think it's important to reiterate the key takeaways from today's call. While the first quarter was certainly more difficult than we anticipated, we do not expect this quarter's performance to be indicative of our full-year results. Used car values have relatively stabilized and we're seeing indications that industry fleets are beginning to firm up, giving us optimism that the industry over-fleeting we've seen over the past few months could largely be behind us by the time we get into summer. We expect to generate $450 million to $500 million of adjusted free cash flow this year and to repurchase at least $300 million of our shares. And we've already started work on many of the initiatives we discussed during our Investor Day to transform our business through the use of technology and we expect this work to enable us to expand our margins by 300 basis points to 500 basis points over the next five years. We have a full calendar of Investor Relations activities planned this quarter, and we hope to see many of you during our travels. With that, I want to take you for your time and your interest in our company.

Thank you. This concludes today's conference call. You may disconnect at this time.