Welcome to the Hertz Global Holdings' Fourth Quarter and Full Year 2015 Earnings Call. At this time, all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. I would like to remind you today's call is being recorded by the company. I would now like to turn the call over to our host, Leslie Hunziker. Please go ahead.

Good morning, everyone. By now, you should all have our press release and associated financial information. We've also provided slides to accompany our conference call that can be accessed on our website. I want to remind you that certain statements made on this call contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and, by their nature, are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call speaks only as of this date, and the company undertakes no obligation to update that information to reflect changed circumstances. Additional information concerning these statements is contained in our earnings press release issued last night and in the Risk Factors and Forward-Looking Statements section of our 2015 Form 10-K. Copies of these filings are available from the SEC, the Hertz website or the company's Investor Relations department. Today, we'll use certain non-GAAP financial measures, all of which are reconciled with GAAP numbers in our press release, which is posted on our website. We believe that our profitability and performance is better demonstrated using these non-GAAP metrics. Our call today focuses on Hertz Global Holdings, Inc., the publicly-traded company. Results for the Hertz Corporation differ only slightly, as explained in our press release. With regard to the IR calendar, next week on March 10th we will be attending the JPMorgan Leisure Conference in Las Vegas, so we hope to see some of you there. This morning, in addition to John Tague, Hertz's CEO; and Tom Kennedy, our Chief Financial Officer; on the call we have Larry Silber, Chief Executive Officer of Hertz Equipment Rental and Jeff Foland, our Chief Revenue Officer will be on hand for Q&A. Now I'll turn the call over to John Tague.

Good morning, everyone, and thanks for joining us. We closed 2015 with over 2 points of margin improvement, a very strong cash position and a dramatically improved leverage ratio. We also delivered $230 million in cost savings, the first year in a multiyear cost takeout plan at the company. While we are pursuing to right sizing our U.S. railcar fleet and delivering higher fleet efficiency and significantly improved customer satisfaction. Our international operating performance was especially strong and in equipment rental we put in place new leadership and began to see real traction outside of the oil and gas segment. Overall we are pleased with what we have accomplished, significant strengthening of our foundation and importantly we have established a course for the railcar business to what was objective of 16% to 18% adjusted corporate EBITDA margins in the next three to five years. Our employees' hard work and dedication ensured that we hit our profit targets for 2015. This was accomplished through an intense focus on costs and asset utilization, while at the same time stabilizing our IP infrastructure and reducing the cost footprint associated with it, completed the Dollar and Thrifty systems integration and building much stronger for revenue performance and our customer experience. In the equipment rental business we completed the sale of our assets in France and Spain, enabling Hertz to better focus on its core and specialty market expansion strategy and we filed the Form 10 for the separation of the rental -- car and the equipment rental business which is still on track for completion by mid-year. I know there has been some concern by our ability to get the spin done due to the volatility of the credit markets and performance in the sector, but we have some flexibility with respect to Hertz leverage and Tom will cover that and we believe we remain on track for a spin midyear. We also continue to work on our opportunities in mobility. While the facts indicate a case for rental car versus ride sharing is quite different, we don’t dispute the fact that our customers want more convenience and speed in product and service delivery and we have work underway to significantly enhance our offerings in that area. While the market is focused on risk associated with this emerging trend, we are focused on the opportunities it presents to Hertz. With that I will turn the call over to Tom, who will walk you through the fourth quarter results.

Thank you, John and good morning, everyone. This morning I will begin by covering our fourth quarter and full year 2015 performance and then discuss our 2015 updated guidance. Let me start now this chart of our fourth quarter financial performance. Despite a challenging pricing environment we continue to make progress against our plan to drive steady earnings improvement as evidenced by the roughly 800 basis point expansion versus prior year in the Hertz Global Holdings consolidated adjusted corporate EBITDA margin. In the last three months of the year we eliminated nearly $75 million of excess costs from the business contributing to approximately $230 million cost savings in 2015 exceeding our $200 million target. As a result of improved labor productivity, reduced IT spending and greater process efficiency, fourth quarter GAAP joint operating SG&A expenses declined to 58% of revenue a 290 basis point improvement versus prior year. For the full year DOE and SG&A expenses as a percentage of revenue was 56% a 110 basis point improvement over 2014. World rental car depreciation expense due to small fleet size, better than expected residual values and greater use of higher internal alternative sales channel also contributed to the 220 basis point increase in consolidated adjusted corporate EBITDA margin for the full year 2015. Moving onto the business segment review, since you have all seen the press release and financial tables let me give you some additional color on the division operating results starting with worldwide rental car. As I mentioned last quarter given our intent to separate the car rental and equipment rental businesses in mid-2016, we believe it is helpful to begin discussing rental car performance on a worldwide basis. Of the total $9 billion of worldwide rental car revenue generated in 2015, 70% was from U.S. RAC and…

Thank you, Tom and good morning everyone. I will start on Slide 17. In the fourth quarter we made significant progress in our previously announced initiatives and are continuing to focus on both short and long-term growth. We have assembled an experienced and savvy senior management team with strong equipment and rental industry experience and are in the process of implementing four major initiatives to enhance revenues and improve utilization. That will include organizational redesign, fleet optimization, operational efficiency and sales force effectiveness. We're pleased to report that we are already seeing progress throughout the organization. However our performance continues to be masked by the impact of the upstream oil and gas markets and by the sale of our operations in France and Spain in October 2015. Despite the declines in upstream oil and gas markets on a constant currency rate basis and excluding France and Spain total worldwide revenue declines was 1% in the fourth quarter and increased 1% for the full year. On Slide 18, in North America, prices declined just under 1% in the fourth quarter and increased about 1% for the full year as a result of significant downward pressure in pricing in upstream oil and gas markets. Volume in North America increased about 1% in the fourth quarter and rose nearly 3% for the full year. As you may recall, last quarter to provide greater transparency regarding the impact of oil, upstream oil and gas markets we broke down our North American rental and rental related revenues with and without major upstream oil and gas markets. As we go forward we believe it makes more sense to share that by market on a worldwide basis as shown in Slide 19 with the fourth quarter and full year performance using constant currency rates. The data on…

Thank you, Larry. Before I shift to the balance sheet and cash flow update, this is probably a good time to address the concern some investors have raised about our ability to get the HERC separation done in the current market environment. Although capital markets have experienced a high degree of volatility we believe that our goal to spin off our Equipment Rental business even in today's market is very much achievable albeit at perhaps a lower leverage target at 3 to 3.5 times with the original target of 3.5 to 4 times. To the extent the high yield market improves, the low end of the original range mix will be achievable. The leverage level will ultimately be a function of market environment at the time of the spin. Now let me give you an update on the balance sheet and cash flow performance. The company generated free cash flow of $755 million in 2015 representing a $434 million improvement over 2014. This increase primarily was driven by higher earnings, disciplined U.S. fleet capacity growth, improved fleet utilization and higher overall advance rate on the fleet debt. We also continue to be disciplined in our non-fleet capital spending, have invested $31 million in fourth quarter of which $16 million is related to a nonrecurring investment of our new corporate headquarters. For the full year 2015 non-fleet capital spending was 25% lower year-over-year at $212 million and included $72 million for the new headquarters which is now complete. Corporate liquidity of roughly $2.2 billion at year end 2015 reflected the highest levels since 2011. Our strong liquidity position and the fact that outside of the corporate ABL which is supported by the HERC assets we have essentially no corporate debt maturing until 2018. When it comes to capital allocation our strategy…

Thanks, Tom. We recognize that there are concerns in the market around where we might be in the cycle, access to capital and residual value in the U.S. rental car fleet. We are running our business consistent with those potential risks as I think Tom outlined specifically for you. I want to point out that our pursuit of a very tangible 16% to 18% margin for the rental car business has never presumed a tailwind. So we are not surprised by some of the headwinds that we may face in the market and we remain committed to that margin improvement goal with $350 million in additional cost takeout this year. I will point out there is a flip side to the residual values that we have experienced in the market over the last several years. The industry has gone through an environment that provided an unprecedented incentive to up fleet. That has its own consequences. So while Tom pointed out that we are expecting declines in residual values over time we do expect to corresponding decline in capacity plans and an improved pricing environment that we are still optimistic about over the longer term. So we continue to be focused on managing the business in a conservative fashion with strong liquidity, improving leverage ratios, assuring our continued access to capital as we demonstrated in the fourth and first quarter and staying the course in pursuing our plans of a very achievable 16% to 18% margin within the rental car business. That's the right decision and the right path in a strong market or a weak market and we are committed to maintaining that course throughout the next three to five years for Hertz. We truly believe that the sharing economy as it grows presents equal opportunity as well as risk. We will manage both of those and we are very, very ambitious about what our world maybe not only in supporting the industry but in response to the trends of declining car ownership within the U.S. We were after all a 100 years ago almost the first car sharing company. So with that I will turn the call over to questions.

[Operator Instructions]. First question is from the line of Afua Ahwoi, Goldman Sachs. Please go ahead.

Hi. Good morning. Just a few questions from my end. First of all, as you think about your capacity guidance for 2015, is there any concern that as you look to shrink your fleet, and your peers are not doing the same, is there any concerns about share loss on that front? And then given that shrinking fleet, maybe given pricing year-to-date is weak, what are your expectations for the back half, so basically embedded in your 1.5 to 2.5 revenue guidance, what's the volume pricing split if you can share that please?

We are experiencing significant improvements in fleet utilization. I had keep that in mind when you look at our plans. We think it only makes sense to the extent we are experiencing a potential decline in residual values, a possible softening in the economy to improve our asset utilization and reduce our fleet footprint. We have to run the business in a responsible manner and presume that others will do the same. So I think that's really what's underpinning our fleet guidance. Tom?

As you know we don’t give separate guidance for rate and volume. I think it implied with the weakness that we saw in the last part of the fourth quarter continue into the first quarter and with the rising fleet costs our expectation is there will be some improvement in pricing in the latter part of the year but we don’t break out separate rate and volume guidance.

Got it and just a follow-up for me. Can you help us with basically a 1% decline in residual value? What does that do to your depreciation per month cost?

Well our assumption is 2.5% and that roughly if you can see between that and non-program cars, is that the impact rose before out other initiatives to help improve fleet costs, resulting in about $150 million to $160 million increase in fleet depreciation overall on the total business. So I think the sensitivity of that 1 percentage point is roughly is $70 million to $80 million on an annualized basis across the fleet. So it gives you kind of the sensitivity but it gives you those two data points you can work with.

The next question is from the line of Christopher Agnew, MKM Partners. Please go ahead.

Thanks, very much. Good morning. Wonder if you could share a little more color on what you saw in Florida and California in the quarter, and is it possible to quantify the impact to overall pricing volume, and maybe was this more of a demand, i.e., weaker international inbound, or was there any change in competitive positioning of regional competitors, their ability to access markets or maybe new entrants having a greater impact? Thank you.

Chris this is Jeff Foland. Thanks for the question. As Tom had mentioned in the prepared comments earlier and as you point out there is a more pointed net impact in some of these heavily leisure markets such as South Pacific and Florida. It is difficult to pinpoint exactly the reason for that. We have also got a very large number of competitors in those markets. Inbound volume actually held up reasonably well but the pricing environment tends to be more severely impacted in those markets.

And separately, can you, Tom, I don't know, can you break out what free cash flow guidance would be excluding HERC for 2016?

Yes, Chris we didn’t break that out specifically. I think we gave you some information that would help from a triangulate around the answer about net fleet CapEx. We also taken on the slide presentation provided a non-fleet CapEx, how much we have assumed to be HERC. Then you have the HERC earnings, clearly the free cash flow is going to change relative to the capital structure of those companies. So, we will obviously be providing kind of an update post spin for both companies. I am sure Larry will provide with his team, his own view. At that point in time, separate independent public company will update ours in the result if there was any change but, just to provide an overall view and you can kind of get some of the data points to try to come up with an estimate. Only as of current Hertz configuration as to what the free cash flow for HERC is.

Our next question is from the line of Michael Millman from Millman Research. Please go ahead.

Thank you. On cost price, we -- the investment community hear about an announcement to price increases, so the question is, what seems to happened, why don't they seem to have been implemented? Also related to that, we hear that there is a partner programs that is your AAA has been a detriment to raising prices and maybe you can talk about that as well? And then in the first quarter, we have a very early Easter but it doesn't seem like you are suggesting that that's going to have much impact and maybe you can speak about that as well? Thank you.

As you know, all the industry participants have taken actions to improve price over the last several months. Clearly, seasonally this is the most difficult time of year to realize the price increase given the fleet circumstances. We remain optimistic that as fleets tighten over the spring and summer that we'll see an improvement in price. As you point out there are a lot of non published channels available at the end of the industry that have an equal import on price but I think generally the trend is positive but struggling to realize that given the seasonality. With respect to the second part of your question on insurance replacement business in the off airport channel, look we're very focused on margin improvement in that part of our business. In fact we on 16 of 16 insurance replacement accounts that came up for renewal in 2015, we had improved terms in terms of pricing for that business. When we refer to a mix issue in the off airport business has more to do with self pay replacement business versus insurance replacement business. With respect to the third component of your question and the Eastern holiday and peaks and combinations with spring break this year, we're working very hard to ensure that we position our pricing structures in our products, in a way that we can yield up to the maximum point possible and we feel reasonably good about how our position is doing [better] as we go forward.

Thank you. Next question is from the line of Anj Singh, Credit Suisse. Please go ahead.

Good morning. Thanks for taking my questions. First off, I just wanted to get a sense of what your fleet levels may look like on airport versus off airport? I'm trying to understand the drivers of your fleet capacity cut since November, it seems most of the change in your EBITDA guidance for RAC its pricing driven but then you're also cutting fleet growth. So if you can just help us to understand, what's changing that outlook for fleet capacity? Thanks

Yes, I would say, we don't breakout separate capacity information and utilization information per se by off and on airport because as you know, the fleet is very fluid and dynamic and can be moved. So it's a little bit of point in time versus on average that you could be conducive if I gave you a specific number because of the fluidity of the fleet being shared. But nonetheless I think, when we got into our capacity back in November, it was arguably a little bit -- we're probably at a little bit at the lower end in our initial planning stages. We've obviously continued to get visibility on demand trend as well as our own ability to execute and continue to drive utilization and get greater confidence in that. As John mentioned, we do believe there is a significant opportunity for improvement of fleet efficiency utilization and I'd say that previously particularly in the first half of the year. So, we're really very balanced and cautious as related to our fleet growth. We believe that over supply is not healthy for the industry and not healthy for creating a good pricing dynamic and environment. As a result, we've been very cautious on our fleet planning process and with the residual assumptions that we've had in our plan list and our expectations around demand, and our expectations on fleet utilization, we appropriately brought down our fleet growth as a result.

Okay, that's helpful. And one for you John, on your closing remarks just before Q&A. With some of the volatility that the rental cars have been seeing with regards to corporate travel on pricing and you guys having to cut your guidance given just three or four months ago, do you have any better sense of what are your longer term targets or increasing the rates or do you think that the plan has been sufficiently discounted for some of the changes that you're seeing today? Thanks.

I guess, as we outlined, we significantly discounted our full potential plan and risk adjusted it and we believe its highly achievable. I think that we've seen some choppiness obviously in pricing in the fourth and the first quarter and that could be frankly in part due to the strength of the residual market. We intend to continue to hold onto fleet particularly at this time of year but we're not backing up at all relative to our ambition and are very clearly -- we think laid our plans to get the 16% to 18%. As you pointed out we're very much risk adjusted at the time.

Next question is from the line of Chris Woronka, Deutsche Bank. Please go ahead.

Good morning, everyone. It sounds like maybe one of the issues that might be there is some of the opaque channels are in terms of pricing, can you guys, give us a maybe little bit of a sense of whether your mix has shifted? What the online breakdown of pricing looks like in your proprietary and third party channels? Thanks.

Thanks for the questions. It's Jeff. There has not been a significant shift in channel mix in fourth quarter on a year-over-year basis. We leverage our business across the all of the channels, be it the corporate channel business through retail agencies, a lot of business through our direct channels of course and a degree of opaque channel business. Where we utilize that channel and tool is market specific and market demand specific, when we need to generate more demand at a certain point in time in a market, we would tend to use the opaque channel more. So we probably take a balanced approach. We're taking clearly a margin centric approach as we drive this business. It's not just about volume, it's not just about market share, but it's about trying to drive a profitable business at the end of the day. So, we're balanced and we expect to continue to be balanced across those channels as we go forward.

Maybe behind that question, when you look at the all brands and the comp we think the difference is about 3 points and the majority of that difference is a function of the change in methodology of the [detag] days as well as a somewhat declining RPD as it relates to our fleet mix year-over-year. So while it may appear otherwise the comp is actually pretty much on top of each other.

Okay, thanks, last year you guys had announced a few partnerships with a few of the ride sharing companies, can you give us a sense as to kind of how that's going early days and whether you plan to expand that or change in any way?

It is very early days as you say, but we do think there is a fleet management opportunity within the ride sharing business that we're going to continue to pursue. And we also think there are a lot of use cases between ride sharing and car ownership that we intend to build products and services to respond to. So we've really have not seen an impact, I don't think that our numbers would be very different from our public comp in terms of what impact we may or may not have seen from ride sharing but we do see an opportunity in these trends within the market.

Next question is from line of Bryan Johnson, Barclays. Please go ahead.

This is Dan Levy on for Bryan, thanks for taking the questions. First a question on your revised 2016 guidance, I understand the headwinds related to HERC and on U.S. RAC pricing and the impacts of that. But in the fourth quarter you did see better cost sales I think that was like $30 million benefit over what you were previously looking at. Also free costs were better than expected for the year. So we're just thinking of the year on year bridge from '15 to '16 why does that, these factors don't provide an offset to the HERC and pricing headwinds?

I can give you the very high level bridge, I think it would be helpful for folks to hear that. We obviously but just specific to company specific questions and I'll give you a high level bridge. The better than cost performance is timing. I mean, we're still are maintaining our commitment as we laid out on Investor Day that the cost savings in calendar 2016 are $250 million. We did not change our net fleet deep guidance either as you probably noted from $290 million to $300 million that's remained the same. So the benefits in the cost increases are especially in line with what we had laid out back in November and as you walk through that the pricing was not something, we expected at least in the latter half for the quarter into the first quarter and so we started the year with a lower 2015 base to build our plan from than we originally had built our preliminary estimates. And then we had to accommodate more understanding that you can't -- it's a similar step off in the 2016 with improved pricing versus what we're seeing in late November and early December. The big picture you got your cost savings a little laid out, you have your investments as we have laid out in Investor Day, so that's an offset to our improvement next year with roughly $100 million of investments, we've previously announced in IT, sales and marketing and other areas of the company. We continue to invest in the business. We are not just cutting costs. You do have fleet depreciation and interest headwinds and we laid out in Investor Day and those are consistent as I said. Earlier in the call, the $150 million to $160 million in U.S. RAC fleet depreciation and…

It's early in the year, we're where we are in terms of the current pricing environment and we thought it was appropriate to adjust guidance on that basis. But obviously we're working hard on the cost and pricing set.

Next question is from the line of Rich Kwas, Wells Fargo. Please go ahead.

So just Tom give your thoughts with, what happened later in the fourth quarter and what just changed for itself for in the first quarter in terms of pricing? What do you make of what's going on in the industry, just you take a step back, Hertz had the fleet issues in '14 and the early stages of '15 and that got unwound. One would have thought that with the comparables, with your business more in line from a fleet standpoint, pricing would have behaved better generally speaking. So what do you make of what's going on in the industry? I know you reiterate confidence in pricing longer term but one could also counter that the industry is just not set up to drive consistent price. So just interested in your perspective given that you haven't been in the industry a long time, you've been in travel business a while but just curious on what your big picture thoughts are right now?

I think, it's really a straight forward. When we're giving up share and shrinking, on an absolute basis, it provides a foundation for above market growth from some new sector. And while we are not focused on necessarily growing share, we are not prepared to continue to shrink and that in unless it causes a corresponding change, is going to create over fleeting temporarily in the industry.

From a competitive standpoint, it seems like from a capacity standpoint you are taking more --most rational approach but you wouldn't say that. It just seems like the industry is not necessarily there yet but I don't know what would drive that other than?

Look, I think we should take some solace. This is an industry that is focused on profitability. I think there are generally rational behaviors across the industry. I think if you look at the earnings results across the sector, you're seeing some very strong earnings relative to previous periods. So I have confidence in the industry being a responsible industry over the long-term, but we got a changing balance here both due to our self inflected issues as well as other dynamics in the market place. We were basically ceding share and ceding that share provided profitable above market growth for the rest of the sector. We can't continue to do that. As I said, we're not going to rationally compete for share, but we certainly are going to maintain a modest growth rate somewhat at or below industry levels and we'll see how that transitions in terms of the corresponding behavior in the industry. But I think this has to occur at some point in time and that's where we are.

Thank you. Next question is from Kevin Milota, JPMorgan. Please go ahead.

Good morning, everyone. A couple of questions here. One on the commercial demand side of the business. You'd cited weak to lower commercial demand excluding the energy segment, hopefully you could give us a sense of what's happening with the other side of it or I guess, the bigger side of the commercial business excluding energy? And then secondly on commercial and leisure pricing, could you give us a sense for what's happening with your -- both segments? And then lastly, given both of you are from the hotel and airline businesses in a prior way, maybe you can give us some thoughts on what's happening with rental car pricing on the commercial side and when do you think, we can possible see some price increases for your corporate customers? Thank you very much.

Thanks for the question. This is Jeff. I'll start with the last part first. In 2015 in our corporate portfolio, the 71% of the accounts that came up for renewal were renewed at equal or better terms from a pricing standpoint throughout the year. So we feel reasonably good about that. With respect to the first part of your question, we saw a degree of softening in business travel in the market place in the fourth quarter but outside of the energy sector, it was a more muted softening in that demand. So that will describe a portion of the volume decline that we saw. But the other portion of volume decline is that we are going through a self effectiveness transformation. We are trying to be very rigorous about the accounts in the portfolio, the profit levels we need to achieve with that portfolio and that has certainly contributed to the volume decline during that time period. Once again we are trying to look at margin for the portfolio and where margins over time in a very responsible way. So some industry softness outside of the energy sector but it was certainly more muted softness than we saw in the energy sector which had a precipitous decline.

Our next question is from the line of John Healy, Northcoast Research. Please go ahead.

Thank you. John, I wanted to ask a question about the U.S. rental car guidance again. I know you don't want to disaggregate the volume- and the pricing-specific metrics, but is there a way to think about the -- what I hear is that maybe a disconnect between investors are thinking about those metrics and how you are talking about the business? When I look at the guidance, it implies a 4% improvement in revenue per car per month. If you look at that number, how much of that improvement is driven by the conventional volume and price that we've all grown accustomed to looking for from you? And then how much of that is due to some of the initiatives you outlined at the analyst day and is there a way to think about a couple of those initiatives that might be more contributing to that growth in 2016?

No. I think look, incumbent in the guidance we believe we have a strong opportunity to improve utilization and that's certainly the biggest driver and we also believe we have a strong opportunity to improve ancillary. But I would not say that there is a lot of per se say risk in that. We are not presuming a lot of new initiatives. So it's fundamentally presumed that we will have -- I think, the environment you would expect, along with an improved utilization range point for revenue production.

Great. And when you think about utilization, with some of the changes you've made to the off airport business, is there a way to maybe think about what the high and low point of the business can look like longer term now, maybe on a seasonal basis, in terms of how do you think about utilization for the U.S. fleet?

We have set our targets in the low 80s and I think frankly they might be a bit conservative over time. I think we can pull it that up a little bit more towards demand of the fleet. As we even have very good experience on improving utilization by improvements in the rentable fleet, reductions in supply chain, support maintenance, et cetera. So we are very focused on -- and the RACD metric or more commonly within the industry the revenue per unit per month is more what we are focused on to drive profitability on the revenue side.

Great. And then just lastly, I might have missed it, but did you guys disclose what the risk versus program target is for the U.S. rental car business in 2016?

From an operating fleet standpoint the rough number is I think we go from an operating standpoint of something like 77% was risk in 20154 calendar year and it was the mid-80% as an operating fleet from a risk standpoint. The buy in model year 2015 was more 40% to 45% to 50% per rent and its significantly less program in model year 2016 just because the availability of the program economics are -- the economics that was offered in model year 2015 frankly you would have to have assume a multiple entry of our assumption of residual value declines or you would be indifferent between taking a risk in a program car. So if we were profit maximizing to be clear in 2016 model year buy we would have bought zero program cards. So we try to be somewhat balanced and continue to kind of use program as an operational flex as well as a risk hedge but not be too responsible and go to all risk and not be -- not kill the earnings and go to too much program. But the program availability frankly was somewhat limited. You may have heard that from one of our public competitors. So we had to kind of balance our fleet buy relative to what was available on the economics.

Thank you. Our following question is from the line of Neel Mehta of Morgan Stanley. Please go ahead.

Good morning. This is Neel on for Adam Jonas. So, you cited highly competitive market pricing in top tier markets due to more regional competition. Just want to understand the nature of the competition. Are these new players or just the existing ones stepping up their operations and capacity? And lastly, if you could just provide an update on the Lyft pilot program in Las Vegas and your updated thoughts on what the opportunity for that could be moving forward? Thank you.

I think this is traditional competition from the industry sort of characterizes third tier flyers. So nothing unusual there. So we really don’t see an overflow of ride sharing price impacting those markets particularly. Our pilots with Lyft I think are going well. I would still characterize them in scale as pilots. But we think that there are potentially opportunities for us to extend the life and in fact have a secondary disposition channel by parts of improvising pooled cars and we have the technology and the business model to do I think. So that represents an opportunity to extend this the core business to the developing trend.

And we have no further questions in queue at this time.

Thanks everybody and we look forward to talking to you after the first quarter.

Thank you. Ladies and gentlemen that does conclude your conference. We do thank you for joining while using AT&T Executive Teleconference. You may now disconnect. Have a good day.