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.

Good morning, everyone, and thank you for joining us. On the call with me this morning are Larry De Shon, our Chief Executive officer; and Martyn Smith, our Interim Chief Financial Officer. Before we begin, I would 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. Risks, assumptions and other factors that could cause future results to differ materially from those expressed in the forward-looking statements are identified in the company's earnings release and other periodic filings with the SEC. It can also be found on the Investor Relations section of our website. Our comments today will focus on our adjusted results. We believe that our financial performance is better demonstrated using these non-GAAP financial measures. All non-GAAP measures are reconciled to the GAAP numbers in our press release and in the earnings call presentation, which is also available on our website. With that, I'd like to turn the call over to Avis Budget Group's Chief Executive Officer, Larry De Shon.

Thanks, Neal, and good morning. Before we discuss the quarter, I want to acknowledge the devastation caused by Hurricanes Harvey, Irma and Maria, and to express our deepest sympathies to all that were affected by these terrible events. The impacts from these powerful storms were felt throughout our operations, and I'm proud of our teams who worked tirelessly to ensure the safety of our employees and their families as well as their work to move vehicles to the affected areas to support our customers and the relief agencies. Now, to the quarter, as we announced last evening, we had a record third quarter with our seasonal peak being driven by strong global volume growth, increased pricing in the Americas and better than expected used car values, partially offset by soft pricing in our International segment. We achieved this despite the effect of the hurricanes, which negatively impacted our adjusted EBITDA by approximately $15 million in the quarter. This impact included lost revenue and lower utilization due to airport closures, incremental shuttling costs we incurred to move vehicles to the impacted area and property damage. I'll let Martyn take you through the results, but first, I'd like to spend a few minutes to review a few of our key initiatives to drive long-term profitability and margins as we grow and adapt into the evolving mobility services industry, as well as what we've been able to achieve in the years since we laid our plans. I'll also take a few minutes to talk about our Waymo partnership, and the progress we have made since our last earnings call. Starting with profitable revenue growth, our plan has been developing quite nicely. The fully integrated Demand-Fleet-Pricing yield management system is now live in six markets in the Americas, and we are seeing positive results…

Thanks, Larry, and good morning, everyone. This morning I'm going to discuss our third quarter results, together with our fleet, cash flow, liquidity and our outlook for the full-year 2017. My comments will focus on our adjusted results. As Neal mentioned, these are reconciled to our GAAP numbers both in our press release and the earnings call presentation. First, starting with an overview of our third quarter, strong volume growth globally led to total company revenues increasing 4% with both pricing and utilization improving in the Americas; and in our international region, strong volume growth being partially offset by lower rate per day. This revenue growth and benefits from our continuing cost-mitigating actions, net of a 3% increase in overall fleet costs led to us increasing our third quarter adjusted EBITDA by $13 million to $482 million. Now, to get into the detail, starting first with the Americas. We increased revenue in the third quarter year-over-year as we executed on our revenue management initiatives and despite some impact of the hurricanes. This enabled us to drive around 1.5% higher pricing in local currency and a 1% increase in volume, as well as the utilization improvement of 80 basis points. Leisure volume was strong, being up more than 3% in the quarter, while commercial volume remained relatively soft, down 3% year-over-year. Inbound rental days increased 3%, with good growth coming from both our international leisure and commercial customers. Leisure rate per day also increased 3% and commercial pricing was unchanged year-over-year which, as Larry mentioned, is the first quarter of flat commercial pricing since Q1 2015. In terms of full-year 2017 for the Americas, we now expect a 1.5% to 2% increase of rental volumes with rates per day expected to be lower by 1 percentage point to 1.5 percentage points.…

Thank you, Martyn. Before moving to Q&A, I think it's important to reiterate the key takeaways from today's call. We had a record quarter with pricing improving in the Americas as industry fleet levels returned to normal and strong international volume growth driven by both commercial and leisure demand, partially offset by lower pricing. Our initiatives to drive profitable revenue growth are proving successful. Our manpower and shuttling initiatives continued to drive efficiencies and lower our costs. And we are leading and evolving as the mobility landscape changes. As I look towards the future, I can't help but feel optimistic about where we're heading. We still have tremendous opportunities ahead of us to leverage technology to improve our customer experience and lower our cost. We operate in a global industry benefiting from trends towards lower car ownership and greater car sharing and the growth of middle-class travelers in both China and India where we should particularly benefit from being the only global car rental company operating corporately in these countries. As one of the largest mobility companies globally with world-class brands and a presence in approximately 180 countries, we are uniquely positioned to capitalize from these secular trends. With that, we'd be happy to take your questions.

Thank you. We will now begin the Q&A portion of our call. Our first question comes from Chris Woronka with Deutsche Bank. Sir, your line is open.

Hey. Good morning, guys. I wanted to ask maybe if you can give us a little – maybe a little deconstruction of the quarter and whether things were tracking in line or maybe better than you thought prior to the hurricanes? And then, maybe just a little color on the net impact of the pluses and minuses in terms of demand ahead of and immediately following hurricanes. Thanks.

Hi, Chris. Yeah. I think the quarter was actually tracking pretty well. We were having a good summer. Residual values had really stabilized. We started seeing improvements in residual values in July going into August prior to the first hurricane. Obviously, we saw a spike on residual values after the hurricane happened as there was a lot of demand on those cars. But overall, I would say that the quarter was tracking pretty well. Since then, obviously, we've had some residual value improvements that were above and beyond what the marketplace would have endured otherwise. That has already started to pretty much start to wind down, if you will. It's hard to know exactly the inflection point where we're kind of back to normal. But based on the number of cars that we're seeing out there and how fast they're moving in a lot of the auctions, we think that that initial demand has pretty much dissipated by now. And so, as we kind of go into the – I think we're kind of getting back more into a normal period as we're going now into the fourth quarter. What I am encouraged about is the fleet position of the industry. I think it's really kind of back to what you would normally see. Obviously, coming out of the summer, you would normally see a fairly large de-fleet in September as people are trying to get out of their summer peak fleet. That didn't happen as the hurricanes caused a lot of those cars to be needed in hurricane environment. So, now, what you're seeing, as that's kind of winding down, you're now seeing more cars being sold at auctions in this month, kind of the end of October and November than what you would normally see just because I think it was delayed 30, 45, 60 days from when the hurricane events happened.

Thank you. Our next question is from John Healy with Northcoast Research. Sir, your line is open.

Thank you. Larry, I wanted to talk a little bit more about the data point on the corporate pricing? I was hoping maybe you could kind of talk about the contributors to kind of the stabilization there, and if you think that is kind of reflective of a trend we'll start seeing kind of on a multi-quarter basis or was this just a function of kind of the leisure pricing being strong and maybe that raising some of the flipping that happens on the corporate side?

John, definitely, as the leisure pricing, spot pricing raises, those corporate segments that are working off a spot pricing that obviously raises with it. So, that's had a nice impact as we continued to work on the mix of corporate business that we're taking. And so, as that continues to be strong, then that will benefit from that. So, it was a good quarter from a perspective that we finally kind of hit flat year-over-year pricing. The other thing to think about too is our length of rental was fairly strong in the quarter. And as you also look in October, length of rental was also very strong. That usually has a negative impact on pricing because the longer the length, the lower the rate is per day. So, even with that increase in longer length, we ended up with flat pricing. So, we've been working really hard on the mix of business that we've been taking and trying to really leverage those customer segments where we might be able to get a better rate per day, whether that will stand the test of time into the fourth quarter, I don't know. October, I think commercial is probably going to be down a little bit. But once again, a lot of that's being driven by the fact that we had very, very strong length of rental in the month of October.

Got you. Along those same lines, I wanted to ask about the agency business you had in September with the, I imagine the FEMAs and the Red Crosses of the world. Did that weigh down reported pricing in the Americas as I can imagine that the longer length of rental kind of works against the RPD metric? I'm just kind of curious if you could kind of give some color on that.

John, it definitely does. It is a longer length of rental business and some of that business is pre-negotiated rates. So, that will have a drag effect on rate. And I think the important thing to note about the relief agency rentals, this go around on hurricanes, is that the initial business you get from them obviously is strong, but it's been winding down fairly rapidly. So, you do get a good length of rental, a month at a time. But we're not seeing the four-month, five-month, six-month, seven-month demand that we've seen in other hurricanes or other types of disaster events in the past. And I think a lot of it is the fact that relief workers pretty much got dispersed to multiple disasters across the country. And everywhere that those happened obviously, we lose a lot of our demand early on, and we're not seeing the length of the disaster really staying in those locations for extended periods of time. So, already we're seeing that business kind of wind down.

Thank you, sir. Our next question is from Chris Agnew with MKM Partners. Your line is open.

Thanks very much. Good morning. Wanted to ask about non-rental revenue in Americas, and if I look at it on a per rental day, it looks like it's been declining this year and in the quarter, it declined about 3% to 4%. I'm assuming that's ancillary revenues and/or Zipcar. So, I was wondering if you could shed a little light on that, and maybe, in general, talk about how that's tracking versus your expectations this year. Thank you.

Yeah. Ancillary revenue has been down this year. You take a look at some of the products like GPS that just continues to unwind as we go through the year and we've been having that problem for a while. We've put new leadership in place around our ancillary revenue and we're working really hard on trying to improve some of the other channels in which we sell it, which is in the script we talked a little bit about the bundling projects that we're doing with the insurance products and so forth in Europe. And we'll be starting that this month in the U.S. And the early signs in Europe have been really favorable as far as how much penetration we've been able to get online, where we've never offered bundled packages before. So we're seeing more take rate of insurance products in the test markets that we launched in Europe than what we had seen just offering individual products by themselves. So we've got to get more creative. As people move to mobile apps and to more online booking, we've got to be more creative about how we get the product offerings out to consumers in a way that they really understand them and that they can take advantage of them for their needs. So that's what we're working on now. Early signs are pretty positive. So we're really hoping that as we roll that out that we'll start to see some growth in ancillary revenue.

Thanks. And if I could ask a quick follow-up in prepay, obviously, you gave some numbers, good growth. And prepay, in general, is good in sort of cancellation fee, but is that – it's obviously the discount headline rate. Is that impacting your headline RPD growth? And do you know what that impact is? Thanks.

Well, we move our discounts with – they'll move along with the rates that we're offering in the marketplace. So as spot prices go up when demand is strong and fleets are tight, that will raise the tide of the prepaid as well. But, obviously, if more people take advantage of a 5% to 10% discount or sometimes in the year maybe even a 15% discount, that obviously would have a negative impact on rate. But we also save a lot of distribution costs when they come to us direct, and we also save on the fact that these customers are going to show. So we have very, very low no-show rates on this customer base. So we want to grow our prepaid. And we've just gotten our digital teams. They've just done a fantastic job of – not only have we launched these new platforms and improved our conversion so significantly, 70 basis points in the U.S. and, in international, the conversion continues to improve on the sites that we've actually launched a couple of years ago, but they've done a lot of work to make the whole prepay process a lot easier and a lot more transparent and clear for our customers. So we want to continue to drive that business. And I think, net-net, it's just a very profitable business for us.

Thank you.

Thank you, sir. Our next question is from Michael Millman with Millman Research Associates. Your line is open, sir.

Thank you. Splitting up the commercial into I guess corporate and other, could you talk about the trends in the corporate piece, particularly what national maybe continuing to do? And, secondly, AutoNation just announced that they have this U.S. deal with Google seeming in competition or seeming similar to what yours is. Could you discuss what seems to be happening there?

Sure, Michael. So your first question, in corporate commercial, our commercial business, I think the large commercial accounts will just continue to be very competitive. There's been really no change in the pricing environment there. Those continue to be very competitive and we're going to be aggressive on those accounts, make sure we keep our accounts. But there's other types of business that rolls up into the commercial segment, and there's areas where we just think that we can do better in how we offer our products, and how we market to these consumers, and how we price our products and so forth. And so, we have mobilized more of our sales efforts around those kind of customer segments and still wanting to protect our large corporate accounts. But we are seeing progress in some of the other areas as well as we continue to focus on those segments of the business that can help our profitability. As far as Waymo arrangement and AutoNation, this is very complementary to what we're offering. We're very excited about the Waymo partnership. We actually launched this month in the locations that we've been preparing. We have been doing some work already early on registrations and titles and things like that, but now we start the maintenance activity. What they're really looking for AutoNation is to – they have a desire to want to run their vehicles 200,000, 300,000 miles. So they're looking for someone who could actually provide that other types of services, like body repairs to keep the bodies in shape to go that kind of length of life. And so, that's very complementary to the type of work that we're doing where it's registration, titling, servicing, maintenance, oil changes, cleaning, positioning, protecting, securing all the different things that we're doing for them. So it's an extension to those services, and I think they'll be a great partner for them.

Thank you.

Thank you. Our next question is from Samik Chatterjee with JPMorgan. Your line is open.

Thank you. Hi. Good morning, Larry. I want to start off with the International segment, and you had somewhat softer pricing there this quarter. If you can sort of discuss what led to that pricing pressure. Is it sort of a multi-quarter thing that we're looking at or is it more something one-off that you saw in this quarter that you expect to sort of moderate in the coming quarters?

Sure. Thanks, Samik. So International pricing has been under pressure pretty much all year, and a lot of it has to do with the third-tier players that are in most of the markets that have just been aggressive on fleeting this year and have been very aggressive on price. We've seen some higher registrations of new fleet in a number of our countries this year where we've seen the opposite impact in the United States. And so, I think that's part of the problem. I also think that just the industry overall hasn't found the right balance of how they're pricing their individual brands. And I think there is just more work to be done there to – when we look at our brands, we try to make sure that we position our brands in the kind of customer segments that we think they can perform really well in and not try to use our brands into other segments as much as we possibly can. And so, I think this is just an industry balancing of how to manage multiple brands in the portfolio that over time, hopefully, will improve. But I think the third-tier companies, and there are significant numbers of them as you know in International, have really caused some pricing pressure this year with the amount of fleet that they put in place and then the resulting pricing that they've got in the market. I would say that October that trend seems to be improving. Although still negative pricing in the month of October, it is better than what we did see over the third quarter.

Got it. Got it. And just a final question. As you were mentioning, sort of October trends in International are looking good for pricing, any color on what the exit 3Q pricing looked like or what early sort of 4Q pricing looks like in the U.S. relative to the average for the third quarter?

No. I think it's too early yet to really talk about fourth quarter pricing. So, as I did mention, October was down just a tad, probably not – maybe about 0.5 point, but I think a lot of that was driven by length of rental as leisure, on-airport pricing was up almost three points in the month of October. So still strong demand, volume was still strong, and still good leisure pricing, and then I think there was some length of rental and kind of relief activity effects on the rate overall.

Got it. Thank you. Thanks for taking my questions.

Thank you. Our next question is from Hamzah Mazari with Macquarie Capital. Your line is open. Hamzah Mazari - Macquarie Capital (USA), Inc.: Hey. Good morning. Thank you. You mentioned competitive dynamics in International and smaller players being more aggressive. Could you maybe frame for us, is there a consolidation opportunity internationally similar to what we've seen in the U.S. or are there antitrust concerns and maybe the market just is not as right for consolidation? Any thoughts there would be great.

No. I do think there is a consolidation opportunity, and we've tried to help that with the acquisition of Maggiore in Italy and the acquisition of FranceCars in France. And recently Europcar has bought Goldcar and also Buchbinder in Germany. So you start to see it happening, but there's obviously long ways to go. Before these acquisitions I just mentioned, I think the other category of car rental companies was about 30%, 35% of the marketplace. So that's quite significantly different than what we have going on in the U.S. So there is more opportunity for consolidation, and I think you will see that play out over time. Hamzah Mazari - Macquarie Capital (USA), Inc.: Great. And just a follow-up question. If we back out the hurricane and we forget about the impact going forward and currently in your business, are you seeing any structural change or any change in the rental car business from a fundamental standpoint? When you look at the fleet, you mentioned a tighter fleet. Is the sector being more disciplined? I mean it's a very consolidated space that historically has had choppy pricing track record. So just explain (39: 51) for us do you see things changing on a go-forward basis? Forget about the hurricane, just fundamentally. Thank you.

Yeah. Putting the hurricane aside, I would have to say the most exciting thing for me is that fleets looked to be back to normal, and it's been a long time since we've been able to say that. And that's a fundamental change. We're working hard – as we've mentioned before, we're working hard to keep our fleet below our demands. We had a really good utilization improvement in the third quarter of 80 basis points, and that's with the effects of the hurricane where we had a lot of our fleet sitting for several days unrented as Florida basically shut down for a number of days. So even with that impact, we had an 80 basis-point improvement in utilization. I think it was the best utilization quarter we've had since 2010. And next year we're going to push for even more utilization. We pulled some cars up from the first quarter into the fourth quarter to sell trying to tighten up our first quarter even more. And I'm thinking that based on what I'm seeing in the industry that the fleet levels, you've got a little noise because of the hurricane and when it hit we'd be normally be fleeting, but I would say the fleet levels are kind of where you would typically see them coming out of the summer peak. And that's really encouraging for me, for us here as we look at how we manage our fleet and try to get it very tight as well. Hamzah Mazari - Macquarie Capital (USA), Inc.: Great. Thank you, Larry.

Thank you. Our next question is from David Tamberrino with Goldman Sachs. Your line is open, sir. David Tamberrino - Goldman Sachs & Co. LLC: Thank you. Just following up on your 4Q pricing comments. It sounds like you said that October was down 0.5 percentage point in the Americas, but leisure's up 3%. Your guidance for the year is down 1% to down 1.5%, Larry. Just trying to understand some of the variability that you could be seeing that would push I think fourth quarter pricing between the range of down 1.5% to positive 1%.

Yeah. Just based on our forecast of where we think the business is headed and what we've been seeing, we are encouraged that we'll have a positive overall fourth quarter pricing. I think to kind of hit our guidance, we need it to be somewhere between probably about a 0.5 point to up a 2 points. So we think that's doable based on year-over-year impacts, what we were doing in the fourth quarter last year, how those comparisons look this year, and the trends that we've been seeing. So, yeah, we feel pretty good about the fourth quarter and kind of how the rest of the year will end up. David Tamberrino - Goldman Sachs & Co. LLC: Got it. And then just switching gears, if you think about your connected-car test fleets that you have going on, when do you think the company can get the full fleet of cars out on rent or within the fleet in a connected status? Is that something that you can aspire to for the end of 2018 or is that beyond?

Yeah. I think that's going to be more 2019. We expect to have about half our fleet automated with the connectivity next year. We start taking delivery of another 50,000 units towards the end of this year and into the first quarter of next year. But also we're looking at multiple kind of solutions for this, so that as some of those kind of come to fruition, then that would help us go at a faster pace as well. So we are learning a lot. The key was to get a lab going where everything was connected, so we could really start changing our processes behind the scenes. And that's finally – we finally were able to get there this summer. So we have a team on the ground working every day to look at how do we change kind of everything we do on how we manage our fleet through the technology by having the automation and being able to keep track of our fleet and be able to maximize the utilization of our fleet the best that we possibly can with this data. So I would say that by next year we'll have half the fleet and hopefully by the time we get into '19 and 2020, we'll be able to get most of our fleet done. David Tamberrino - Goldman Sachs & Co. LLC: Okay. And do you have a rule of thumb or a way for us to think about what type of cost savings you can get per car at this point? Or is that something maybe down the road you can share with us?

Yeah. I mean, we have lots of ideas and we've got a roadmap that the team has laid out of the first initiatives that they'll be working on, and then managing all the way through it. And, of course, as you get into it, new things come up all the time of new opportunities. And this is kind of an endless roadmap at this point which is pretty exciting. So we don't have a number right now because we're just in the discovery stages. But as we put some of these initiatives in place and start to see the benefits, then we will have a number that we'll be targeting. We have seen the gas revenue impact as far as the incremental revenue per transaction. And that we've been testing now for a number of years, and we feel pretty good about that number. But now there's a lot of efficiencies we think we can drive into the fleet and also in how we manage miles across our fleet. And so those will be some of the initiatives we'll be working on in 2018.So it's pretty exciting. Some of the new things they've already started have been really great. There's customer benefits in it as well, some of the initiatives that they've been working on. And I think we just have to kind of let this thing play out and let the team do their work, and then we can start to get to numbers as we look into next year. David Tamberrino - Goldman Sachs & Co. LLC: Got it. Thank you so much.

Thank you, sir. Our next question is from James Albertine with Consumer Edge. Your line is open, sir.

Great. Thank you. Good morning. Appreciate you taking the question and congrats on the improvements from 2Q. You've highlighted many of them in the Q&A and in your prepared remarks. If I missed it I apologize, but I think I heard you say you're shifting to run slightly tighter into 2018. Can you talk a little bit about the fleet mix, the balance of risk versus program cars and then also sort of cars versus utility vehicles as we think about that running slightly tighter into the New Year?

Yeah. So we still have a lot of the optimization work going on, on the fleet for next year, and how we'll rotate fleet in and out of the different markets, and we'll continue to work that through the balance of the year. But overall, I'd say that our acquisition, our buy for the 2018 buy did move up several percentage points on program versus risk. So, we're still buying more risk, but not to a degree that we bought in 2017. And now, net-net, over next year, with the risk cars we already have in the fleet, we'll probably move our mix a couple of points more towards program. But the purchase was more than a couple of points more. It's just how the math works out when you put it over the entire fleet. And we did move our mix more on some of what we call our non-core fleet. So, to some of the bigger SUVs and more specialty types of vehicles where we can drive a higher revenue per unit, as well as where residual values tend to be stronger. So the fleet cost may be higher, but the RPU is stronger and the residual value seem to be stronger as well. So we have moved a little bit more towards more of the non-core than the traditional sedans, the core cars that we have in the fleet.

Understood. That's very helpful. And if I may, as a follow-up, if you'll indulge me on more of a strategic longer-term question, I guess, can you help us understand sort of two factors? One, the elevated sort of capital spending levels, you're running about $200 million or so, I believe, for this year, which is your guidance. How many more years of that sort of elevated spending on these initiatives do you anticipate or are we on the down slope now? And then, if you were to sort of indulge a thought experiment, 5 to 10 years, maybe 10 years down the road, what does your revenue mix look like? I mean, is it something like a Zipcar, maybe a one-way rental people commuting to work sort of opportunity? Is that a 10% to 15% sort of revenue opportunity in the longer term? How do you see that shaking out over time if you were to sort of run that hypothetical? Thanks.

James, this is Martyn. I'll take the CapEx part of that question and hand over to Larry. CapEx is running about in line with our depreciation. And I think, if anything, it will rise a little in 2018 and into 2019, partly for the point Larry was saying earlier about connected fleet. So we've got a large program to bring those cars all to a connected state and that we'll expect – plus some of other investments from the technology as well. So we expect our CapEx to rise to an extent and then hold around there 2018 and 2019. I will hand over to Larry on the second part of the question.

Yeah. It's interesting. As we look at all of our new mobility opportunities, this one that you referred to, I think, is a really creative solution that our Zipcar team came up, and it's actually doing already quite well in just the test markets that we put it in. Where we've come up with a product for those people that just don't want to bear the cost of a car, insurance, the gas, the damage, the maintenance, the parking, and particularly in the cities that we've tested and where parking is quite difficult, when they only really need is to drive to work and back and they don't really use their car on the weekends. So we're now offering this product where from 5: 00 in the morning on Monday until 7: 00 in the evening on Friday, this car is dedicated to you, this spot is dedicated to you, and you pay a monthly fee plus a mileage fee. And you have your insurance and gas included and the parking is guaranteed. We're seeing a really nice response to that product. So, it's interesting. As we look at new mobility types of products, whether it's across the Zipcar space or – in the car-sharing space or whether it's on the rental car side, new mobility is really an important area that we need to get into. How do we offer new mobility solutions beyond the traditional rental car by the day, by the week, by the month and as well by the traditional hour rental that we see on the Zipcar side. In Zipcar, we launched in London, Zipcar Flex, which is – you pick up the car and you pay by the minute, not by the hour, but by the minute, and you can drop the car in any parking spot that the municipality authorizes. That is seeing a big uptake in London. We're seeing a huge growth in members because of it. We've had some of our largest month growth of new members that we've ever had in Zipcar in London, and a lot of that has to do with people really aligning with that product and really wanting it. So these are just a couple examples of new mobility solutions that we'll continue to take a look at across all of our brands as we go forward. What percentage it is of the total revenue in 10 years? I don't know. But I think we're at the really early stages, so that that would just be a guess, but I think it's an exciting opportunity for us. And we're really thinking in those ways of how do we drive more mobility opportunities and solutions for people who now are starting to look for more mobility solutions as they've given up on their own car ownership.

Understood. And thank you again.

Our next question comes from Yilma Abebe with JPMorgan. Your line is open.

Thank you. Good morning. Couple questions from me. My first question is, if you can perhaps touch on both your volume and pricing performance relative to the industry both in Americas and Internationally. Are the trend lines relative to the industry better, worse or in line with the industry on both those fronts, please?

I'm sorry, was your question on market share or pricing?

Well, both on volume and pricing, which I guess the important implication being sort of the market share trend. Your volume and your pricing experience in the quarter, how does that sort of compare with the overall industry?

Yeah. Our market share trend, if you go back a number of years, have not really changed. We've been on a constant trend of, I think, about 27%, 27.5%. And we may go down 0.5 point or up 0.5 point here or there kind of from month-to-month, but our trends really haven't changed. Our pricing I think has been – it's hard because everyone has a different year-over-year comparison, but obviously we're not pricing to gain share and we certainly don't want to price to lose share. In the fourth quarter last year, we did try to hold our prices higher, and we did lose a little bit of share and we had to recover that back at the beginning of this year. But other than that, our market share has been basically the same really for a number of years.

Okay. So it sounds like there's nothing of note on the market share front this quarter. The second question I had is, you called out better fleet costs than expected. Do you attribute that to sort of your company-specific disposal channels or is it mostly driven by you think the overall used car marketplace?

I think, as Martyn said in his section, that we've been able to grow our alternative channels quite significantly, which does have a positive impact on our fleet cost. I think we moved at least 13 points for the first nine months of the year. About 50% of our fleet that we're selling, we're selling through alternative channels. And we still have a long ways to go there. So I mean every month, we just continue to do better as our fleet remarketing team continues to expand our capabilities there and work with our field operations team to do that. We did see a benefit obviously short-term, we did see a benefit from the hurricanes. But before that, the residual values were improving before even the hurricanes happened. So we felt really good about how things were starting to look in July and going into August. And as I said, I think pretty much the demand has really plateaued now, caused by the hurricanes. And so, what we're seeing now is still an improvement from what we experienced in the first half of the year. So I think it's a combination of just the market improving. I think a lot of the volume of rental cars that were going through the market in the first half of the year obviously has now looked its way through. We're into a more normal environment than we were in the first half of the year. Not that we don't have other pressures like off-lease vehicles and those types of things that continue to increase as we go forward, but I think all these things together is what's really kind of helped this quarter on fleet cost.

Thanks very much. That's all I have.

Thank you. Our final question comes from Dan Levy with Barclays. Sir, your line is open.

Hi. Thank you. Wanted to follow up on an earlier question. In the Americas, if we take the quarterly price delta and the quarterly fleet cost delta, you applied EBITDA sensitivities to those. It implies a year-over-year headwind, roughly a negative $20 million delta. I know that the quarterly relationship is lumpy and it's not perfect. But I think we've seen this trend for a number of quarters now. So with fleets a bit tighter now, you mentioned they're more normalized and residual is showing some stabilization. Any sense on when you think that relationship of price versus fleet costs may flip to being a positive? And given the lag that we've seen between fleet cost pricing, any sense on the magnitude of pricing recovery because we've now seen a long stretch of sort of heavy fleet costs increases without much price. Wondering if there's a snap back of price that you think can occur or if that's not possible?

Well, we certainly hope it's possible at some point in the future. It's hard to tell when those two will crossover and pricing will start recovering fleet costs. We've had, as you said, two years of fleet costs going up and pricing being negative. So, as I said, we did see improvement in price in the third quarter, fleet costs starting to improve, fleets tightening up. And I think that's really the key because I think fleets have to really stay tight to demand for that pricing to be able to continue to increase and continue to grow. But I think, also, the hurricane has put a little bit of confusion in kind of what was happening in the quarter, and we just have to let that kind of noise settle out and then see how we turn the year, as far as how fleets are to demand next year. But if the fleets stay tight, there's no reason why – we haven't seen anything going on in the industry that would say that pricing would still be challenged. There's a price increase that went in by one of our competitors a little over a month ago. That price increase was matched pretty well by the industry, and so there seemed to be a response to that in a way that people want to offset fleet costs. So, as we go forward, fleet cost continues to be pressured and fleets are tight, then, I would think that those yielding opportunities will continue to manifest itself. And that's what Demand-Fleet-Pricing is all about. It's making sure that we find those opportunities and that we can plan for them further out when our fleets will be tied to demand, and how we can then yield our pricing earlier than what we do today, so that we can take advantage of that with more of our fleet than what we end up doing today when we're trying to look at it more in a manual environment. And so we're really excited about the six markets we've already rolled out with the fully integrated DFP, Demand-Fleet-Pricing, where it is playing off of our new forecasting model on volume as well as in leveraging the forecast of the fleet against that, and then doing the appropriate pricing and having us make decisions much earlier in the process, so that we have more fleet closer in for a higher volume business. And that's the way it works. And so, as long as fleets stay tied to demand, we should be able to recover fleet costs.

Okay. And just one quick follow up. We're now about a year since your Investor Day, and you outlined a number of initiatives to grow EBITDA margin, revenue growth, fleet optimization efficiencies. Any sense on the early scorecard on those initiatives, the cadence, and the timing to extract those benefits? Do you think that the challenging environment in used car pricing has changed your approach around those initiatives, whether accelerating them or shifting priorities?

Well, we have accelerated a number of them, and that's how we were able to mitigate some of the impacts of the pricing and residual value pressure that we've had this year. But what we keep everyone focused on is don't worry about fleet cost and pricing. When we said at the Investor Day that we thought we could reach those kinds of levels of margin improvement if pricing offset fleet costs, so net-net, it was neutral. Obviously, that hasn't happened this whole year, so that has put pressure on us. While all that's happening, we're working on all the things we said we were going to work on. And examples like alternative disposition channels which have improved significantly in providing us a very good return. Our manpower and shuttling initiatives are good examples of that. Our connected car initiatives are good examples of a longer term play of how to drive efficiencies in the fleet and reduce our costs. So, we're going to stay focused on all those things we committed to. And obviously, if something were to happen that fleet costs were not offset by pricing that would be a drag on that goal. But hoping that that eventually turns its way around, we believe these other initiatives can help us drive those kinds of impacts. So, we have accelerated some of those this year just with the environment that was going on, the team pulled together and said we got to move faster on some of these, and we took some risk and did that. And we'll continue to play out those initiatives as we go into 2018.

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

Well, thank you for your time this morning. I hope the enthusiasm we have for our business and the opportunities to lower our costs and drive efficiencies across our business, and further our leading position in the mobility market were apparent from our comments today. We again have a full calendar of Investor Relations activities planned this quarter starting tomorrow at Deutsche Bank Leisure Conference in New York, and we hope to see many of you during our travels. With that, I want to thank you for your time and your interest in our company.

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