Ladies and gentlemen, thank you for standing by. Welcome to the Hertz Global Holdings' First Quarter 2017 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. I would like to remind you that today's call is being recorded by the company. I would now like to turn the call over to your 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 2016 Form 10-K and our first quarter 2017 Form 10-Q. Copies of these filings are available from the SEC and on the Hertz website. Today, we'll use certain non-GAAP financial measures, all of which are reconciled with GAAP numbers in our press release and related Form 8-K, which are 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, Incorporated, the publicly-traded company. Results for the Hertz Corporation are materially the same as Hertz Global Holdings. On the call this morning, we have Kathy Marinello, Hertz's CEO; and Tom Kennedy, our Chief Financial Officer. I'll now turn the call over to Kathy.

Thank you, Leslie, and good morning, everyone. Just two months ago I shared with you a set of key priorities to drive sustainable incremental growth in our U.S. Rental Car business over a multiyear horizon. Today we remain committed to those priorities. We're realigning and upgrading our fleet mix to reflect customer preference and capture profitable demand. We are promoting loyalty through service excellence. Our legacy systems are being updated for greater flexibility, increased productivity and enhanced capabilities, and we're leveraging our brands and capitalizing on our assets to generate growth. Executing this long-term strategy requires a significant level of investment, and 2017 will take the brunt of the earnings impact with 2018 better positioned to reap the benefits. Everything we're doing to transform the company is premised on having the right fleet. In the rent-a-car industry, cars matter. Towards that end, we're taking a necessary depreciation hit this year to upgrade our vehicle mix to better match customer preferences, while at the same time aggressively defleeting to optimize capacity quickly. As such, we knew the first quarter and even the first half of 207 would be especially tough. What was unexpected, however, was that the typical seasonal upswing in used car values did not occur in February this year as is usually the case, but was delayed into March, which put added pressure on earnings. Still we sold 21% more vehicles year-over-year in the first quarter and keeping with our long-term strategy to closely match fleet to realistic levels of demand to ultimately drive profitable growth. We did not chase demand to solve for utilization. In the first quarter, this combination of accelerated dispositions, a richer mix and a weaker-than-expected industry residual value trends accounted for approximately 60% of the adjusted corporate EBITDA decline. And while revenue pressure continues…

Thank you, Kathy, and good morning, everyone. Before I turn to the details of the quarter, let me provide you some context how we saw the quarter play out. As you may recall, during our year-end 2016 call in February, we outlined for you the challenges we anticipated for the first half of 2017, including the following: we entered the year with more vehicles than optimal, began the early onboarding of full and premium vehicles in the fourth quarter of 2016 to correct our fleet mix. We indicated that we'd be accelerating U.S. RAC fleet sales in the first half of 2017, but would not have the optimal mix and capacity until the end of the second quarter. And as such, our vehicle costs would be higher than the prior-year quarter. We also said the U.S. RAC revenue would be lower in the first quarter, as we would continue to experience an unfavorable customer mix and be negatively impacted by the timing of Easter and leap year. We cautioned that the higher fleet costs and lower revenue would result in lower adjusted corporate EBITDA in the first quarter versus prior year. And despite this, we are going to continue to invest in our four key areas important to our turnaround strategy: fleet, service, marketing, and technology, because we believe these are the areas that will deliver customer preference and revenue growth long term, and ultimately enable us to generate competitive industry margin while positioning us for incremental future profitability. For the most part, our expectations were met. The single largest variance, however, was that the seasonal strength in residuals in the U.S., usually experienced from around President's weekend in February through the end of the quarter, did not materialize until late March. As such, in light of the weaker residuals,…

Thank you. Your first question comes from the line of Dan Levy from Barclays. Please go ahead.

Hi. Good morning and thank you. Just a couple of questions on fleet costs here. On the $348 that you reported in 1Q, how much of that was due to losses on disposed vehicles and how much supplemental depreciation is in that? How long does that last? Just trying to get a sense of what a normalized fleet cost level would be without all of these aggressive disposals.

Thank you. Yes. So, the bridge that we would provide roughly is that our wholesale losses, given rate and volume year-over-year, that the loss on unit and the increase in volume contributes approximately $20 per unit of the increase. The core residuals is approximately $30 of the increase. Approximately $10 is mix. And we had favorability of about $16 through our retail and channel and other initiatives. So that gives you the rough bridge. Again, I would caution folks to indicate we do expect to continue to sell at elevated levels in the second quarter. I can't estimate that the losses will continue there or (23:29) we expect them to decline as residuals have improved. As you know, the Manheim Rental Index declined 2% in April, that's an improvement from March. So we're seeing sequential improvement as we head in the second quarter. So I wouldn't necessarily want to give a – we're not going to provide any guidance for the second quarter or full year fleet costs. But recall, we are selling a lot of model year 2016 cars that didn't have the cap cost reductions when those were negotiated. The model 2017 cars make up a higher component of our fleet mix in the second half of the year, that did have cap cost reductions in them, and will have less of an impact to the declining residual market than we'll experience in the first half of the year.

Okay. Thank you. And then just a follow-up also a bit more on fleet size. The 4% within the quarter, obviously, you aggressively defleeted, but you ended up with higher fleet and presumably this played into your weaker pricing to some extent. If you could just talk to the extent at which this was driven by timing? And as we're thinking about the full year, how should we think about what size of fleet growth you'll have?

Yeah. Again, we're not going to give full year guidance on capacity, to be clear. Yes, from a (24:46) reported perspective, 4% was elevated. Keep in mind, we are having growth in our ride-sharing partnerships that is adding fleet to our core fleet businesses not growing at that level. So, there is a comparable issue year-over-year. We're having growth in fleet specifically segmented to that ride-sharing business, which is contributing to the overall growth. We did enter the quarter at elevated fleet levels. You may recall that in 2015 we're able to get out about 67,000 program cars. In 2016, in the fourth quarter, we have less program eligibility, so we only got about 27 cars out of our 27 program cars in 2016. So, it takes longer to get out of fleet clearly when you have more risk, and there's more risk in getting out of that fleet. So, we did enter the quarter at elevated fleets, that coupled with we were taking higher value cars in the fourth quarter despite knowing that that would have elevated fleet in the first quarter because our focus was to fix the fleet mix and not be concerned so much on low level of our fleet in the first quarter, our utilization. So, that was another factor that drove our elevated fleet levels. But we expect, again, as we've said publicly and even after the – at year-end call that by the end of second quarter, we should have the optimal mix and capacity that we believe is appropriately headed in the peak earning season.

Your next question comes from the line of David Tamberrino from Goldman Sachs. Please go ahead. David Tamberrino - Goldman Sachs & Co.: Thank you. Good morning. My first question is just on the pricing side. You've been seeing residual values decline now for a while, I think over – for nine months. We haven't really seen the industry respond to that as vehicle depreciation expense has gone up. So I'm just curious as to what you believe is really impacting and weighing on your pricing.

Well, I guess, I would say from our vantage point, we did show a slightly lower utilization level. And that reflects the fact that we are not managing to utilization levels. We're managing to real profitable demand. And I think as the rest of the industry starts reflecting that same approach as well as we start looking at and seeing the normal recurrence of eventually the pricing matching the cost to the fleet – I mean, this is a business and just as so long you can under-price and continue to take a hit of accelerated depreciation expense. So, as we are very aggressively, as Tom and I have both mentioned, getting out of fleet, again, 21% more in the first quarter, the same level of intensity we'll have in getting out of fleet the second quarter, we believe that we'll be in a great position to manage profitable demand and to manage back up to a normal utilization rate. But we are focused on regardless of the expense at this point getting the fleet right and, as Tom mentioned, we are bringing in higher quality, prestige, full-sized, more features and functions to reflect what our customers want to rent, and we'll continue to do that.

And if I could add, David, one of the things that might also be contributing to the industry situation, in addition to what Kathy said, is the amount of program content in the industry is less, at least for some of the players, than it was the last time we went (28:15) through the cycle. It takes strong conviction to sell risk cars in a declining residual market and to rebalance your capacity. When you have more program eligibility, there's less risk at realigning your capacity and then trying to get the capacity down and drive up price, so you might have a longer-term lag effect. Historically, it's been about a nine-month lag between fleet costs and pricing utilization. And I think everybody in the industry is clearly rational. So, ultimately, as I've said many times in the prior year, eventually the industry gets – everyone is rational, they'll (28:48) price to recover rising ownership costs. But there may be some implications on this, more percentage of risk in people's fleet that causes folks to pause longer before defleeting in this environment. David Tamberrino - Goldman Sachs & Co.: That's helpful. And let me just follow-up with Kathryn. I think you mentioned within your response a competitor under-pricing. Is that what I heard?

No. I didn't mention a competitor under-pricing. What I basically said was – is, we are not managing to utilization. We're managing to profitable demand. And that's why you saw a reduction, or one of the contributing reasons why you saw a fairly low – relatively low utilization rate. So, the industry can take the approach as, you have weaker demand and a larger fleet, and you don't want to be aggressive in getting out of that fleet because of residual values. There could be a tendency to manage to utilization versus profitable demand, but we're not going to do that. I'm just making the point that that's not something we're doing, and it's not something we're going to do. And I think our numbers reflect that to a great extent.

Your next question comes from the line of Chris Agnew from MKM Partners. Please go ahead.

Thanks very much. Good morning. You talked about getting the fleet right-sized by the end of the second quarter. What gives you confidence, both on maybe the demand side and supply side, that you can make that happen? And then, what options do you have at that time to adjust if you're not right-sized? Thanks.

Well, I think we have – the demands in the next second quarter tends to be fairly predictable, pricing less so, both on what we can sell cars for and what the industry is going to be pricing at. But we have a very aggressive selling schedule. We have been consistent in meeting – we have 80 locations where we sell retail cars. We sell them at our off-airport locations. And as Tom said, we're able to sell 65% in a more profitable way, avoiding total sales at the auctions. So, we have been on track. We sold over 70,000 cars in the first quarter. We will keep that rate up, and we will have, by the end of the second quarter, a fairly good utilization level, based on the cars we have and the demand we're seeing.

And to add, Chris, we've established our fleet plan. We don't make commitments to 100% of the model year buy 2017. So, not only we're getting to an appropriate level relative to demand through dispositions, but we have uncommitted buys we're not committing to. And then, from an optionality standpoint, we believe what we're establishing as a fleet plan that allows us to flex up as demand materializes, as opposed to, which we historically I think (32:05) to a strategy which perhaps was more of a flex down strategy, which is more difficult to react to, and to be able to flex up, the levers you have to pull there is hold fleet (32:15) longer and take additional deliveries that we had not committed to. So, we cut the large open hole in our 2017 buy to allow for that flexibility. And so, as you go into 2Q, that's the hole that's basically not having to take deliveries of model 2017 and helps build some of that capacity.

And we will not be holding cars for long periods of time as a way to meet demand. I found, over the years, that there's a lot of people out there that love to sell cars and would love to sell cars to us, particularly in this market, as there is some pressure on car sales. So, we believe that fleeting up is a lot easier to do, and a lot more profitable to do, as versus trying to rapidly get out of cars that you don't have the demand for. And that's going to be our approach going forward.

Thank you. And if I could just follow up. You talked a lot about brands. Can I ask about Dollar and Thrifty brands and how you feel they're positioned? What investments you're making to support them? And from a top-down perspective, it appears the price point for those brands has fallen. Are you experiencing more pressure around Dollar and Thrifty? Thank you.

I think pricing in the industry in general has fallen. And, in order to maintain being competitive as the industry drops price, we are obviously forced to follow, if we're going to maintain sales and share. To that extent, I do believe we have underinvested in our brands, and we're working very diligently around how to invest in greater segmentation, greater services, and focus on those brands. And going forward, as we have the right fleet and pricing and make great strides in our service capabilities, we will have a lot more investment in optimizing our digital channels, as well as reinvesting in those brands.

Your next question comes from the line of Chris Woronka from Deutsche Bank. Please go ahead.

Hey. Good morning, everyone. Wanted to ask you if you could maybe – I know you're not going to give guidance, but maybe if you can bucket some of the investments you're making and give us a general sense as to the scope and timing and how we think about that affecting cash flow kind of on a full year basis, again, realizing you're not going to give us specific numbers, but just maybe directionally?

Yeah. Hi, Chris. It's Tom. So, the investments we're making, fleet is a big component this year. I would say fleet, the systems, sales and marketing starting to ramp up, and then we're doing some things in the operations side of the house. Since Kathy has arrived from personnel and incentives and things like that, she drives the right behavior, right service levels. So, it's across kind of where we think have the greatest levers. The pace of investment, candidly, is approximately – based on our outlook – approximately equal every quarter, although the mix changes where fleet is heavily-er weighted in the first part of the year and then it goes to more marketing and service kind of midyear to latter part of the year. But the pace of investment is about the same. We haven't disclosed the amount, but it is approximately in the $70-ish million a quarter impact to EBITDA, with an incremental $150-ish million of incremental impact to EBITDA year-over-year. And, again, that's a very significant level of investment relative to our overall earnings. But as we've stated very clearly, we believe that this focus and this effort is necessary and critical to drive Hertz to preference and ultimately drive profitable growth. So, that gives a little color into the investment. I don't want to get in too much detail. Again, Kathy is new into the tenure and that could change, to be clear. But that is kind of our current plan for the year as we go through this year.

Okay. Great. And then as we think about pricing, I think there are a couple of things that probably impact comparability year-over-year, right? One is the more rentals to ride-sharing companies and the other would be having the larger vehicles. Is there any way to quantify that, just the impact of it maybe over the year or in the forward quarters?

Yeah. I mean, the ride-sharing business, again, as I indicated previously, was pretty small in the first quarter of 2016. It has been growing pretty rapidly here in the first quarter and has added a good 1.5 points to 2 points of fleet capacity to sell for that or provide for that level of demand. So, it is a profitable contributing component of the business because it is a alternative use for fleet that's older. There is a high demand for cars at that price point. So we have looked at in pretty detail. It is a profitable piece of business and we think it is a component of kind of a new opportunity that we want to continue to participate in. But we aren't going to get into many more details than that.

I guess, I would add, we look at pricing and where it's going to go or how we think about it as pricing becomes more rational to the actual expense of the cars and less around meeting utilization levels, if things follow historically what they've been in the past, we should see more from this in pricing towards the end of the year.

Your next question comes from the line of Michael Millman from Millman Research. Please go ahead.

Thank you. I guess, a couple things. You indicated that when some of the competitors reduce prices, you have to go with them, which has always been the story, and yet it seems not to make a lot of sense in terms of trying to keep the price up. So, maybe you can talk about your philosophy there and what it might cost you not to go along? Secondly, when we look at least at the average fleet in the first quarter, it was up 4%, whereas in the fourth quarter, it was up 3%. Maybe you can talk about whether you expect the fleet to be up, down by the end of the second quarter or by the end of the year, and any other color on kind of where the fleet levels should be?

I guess, on your first point, I didn't say we took unprofitable price. But I did say, obviously, if in general the industry is dropping price based on meeting utilization levels, we will have to, in some cases, lower our price, but we don't take unprofitable business to that extent. But it would obviously impact our overall pricing strength and ability. And I'll defer the second part of your question to Tom.

Yeah. So, the kind of the key, Michael, from going to 4Q to 1Q, as you indicated, one of the components to that is the ride-sharing component of our fleet growth drove (39:53) growth fairly significantly 4Q to 1Q. So, that's contributing to the overall fleet growth, the core business is down – the year-over-year increase in the quarter from 4Q to 1Q, the core business is down. As we stated, we expect to be at appropriate level of capacity by the end of second quarter. We're not going to give forward guidance to what that means relative to overall fleet growth, but it just is – we believe it is appropriate relative to what we expect our demand to be. And as we've said, Kathy and I both said, the strategy really has been revised to focus on a flex-up strategy as opposed to a flex-down strategy from an overall supply standpoint.

Related to the fleet, can you give us an idea as to your thinking or at least roughly your thinking on the State Farm contract, which we understand you're renegotiating or negotiating currently?

State Farm has been a great partner. It's a great business for us. It's profitable. And we hope to be doing business with them for a long time into the future and we hope that business will grow. We're working hard with that partner to grow that business. We love it.

Your next question comes from the line of Anj Singh from Credit Suisse. Please go ahead. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC: Hi. Good morning. Thanks for taking my questions. Kathy, a follow-up to an earlier question asked another way, as it relates to your confidence in an improved 2018. It seems that the weak residual environment could persist for some time. The rental car industry does not really seem to be responding to the cost pressure via high rental rates. So, do you think that the industry can ultimately push prices that can offset fleet costs to the degree that it actually increases your margins? And how much of your optimistic outlook is predicated on a better operating environment externally versus internal factors?

Well, first of all, I'm not sure I would call it a realistic outlook as versus optimistic. But I do think that pricing is a function of supply and demand and fleet cost changes. And as we talked about, we are tightening our fleet ahead of the peak and we, obviously, will be paying close attention to what the industry looks like at that point. But again, I think as Tom mentioned, as residual values come down and we go into our 2018 buy, we have to work and look at realistic deals with our OEMs that reflect the pressure we're seeing on residual values. And so I think, to that end, it will depend on consumer demand, car prices, both the depreciation expense we have now as well as the new cars we're going to be buying and then how we manage that demand on utilization by a smarter approach to fleeting up as versus trying to fleet down I think will make a difference in our 2018 outlook as well as at the end of this year. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC: Okay. Got it. And as a follow-up, if we look at your results for this quarter, it seems that there wasn't a whole lot of investments impacting the degradation in EBITDA. So, is your investment agenda at all constrained by some of the pressures you're seeing on pricing and fleet costs or is that just timing? And have you identified any other areas warranting attention aside from the items we've been discussing, as it relates to your investment spend? Thanks.

Yeah. Anj, it's Tom. So, no – the actual investments, although you saw – I think you're probably referring to looking at our financials (44:00) SG&A down year-over-year. Recall that we still have the benefit of our cost savings initiatives, which is helping to kind of dampen and offset the investments we're making, so you don't necessarily see it reflected in our GAAP financials. Nonetheless, the level of investment this quarter, as I said, is going to be consistent with every quarter, at the $70 million-ish range. Fleet with a disproportionate amount of the investment this quarter impacting us and that will start to move to in the second half of the year more sales and marketing, operations is investment in the second quarter. So, you're going to see that level of investment kind of consistent throughout the year. And as I said, it's going to be a headwind throughout the year as we go through each quarter.

Yeah. We actually stepped up our investment and our Choice rollout. We stepped up our investment in customer-facing service incentives for our employees. We stepped up investments as well in our digital space and in some of our demand and revenue modeling. So, we actually go throughout the quarter as I've come across what I think are very sound growth initiatives as well as service initiatives, we continue to invest and we haven't backed off on driving the right fleet mix and that is one of the areas that has impacted on the lower utilization level. So, if anything – and, obviously, it takes a lot of tenacity, given what we know we were dealing with from a depreciation to be smart and not basically mortgage our future by making some cuts that make no sense this quarter because of the timing. We will continue. We have a plan. We're working the technology, the marketing, the fleet, and the service initiatives as aggressively, if not more aggressively and searching for more investment opportunities to bring growth back to the company. You can't cut your ways into creating value and we understand that. And I think what Tom pointed to is, before I arrived, there were some real smart decisions around infrastructure, like outsourcing our legacy systems, and some solid productivity improvements that have – make us from an operating expense and from those percentages, we're actually very competitive. What is drawing us down from an expense base perspective is the significant and continuous investment in the business to get back into being a growth company and really taking advantage of a great brand and all the assets this company has.

Your next question comes from the line of James Albertine from Consumer Edge. Please go ahead.

Great and thank you for taking the question and also thank you for all the color in the prepared remarks. A lot of great details in there. We really appreciate that. Wanted to maybe ask to the degree that you can share on sort of early second quarter environmental sort of operating environment. We're seeing some airline data that suggests that April was a much better improvement year-over-year certainly and maybe some acceleration in the rate of change as well from prior months. Is there anything that you can provide as to the, again, the early 2Q environment at this stage?

Well, I would say, April, year-over-year, the big difference there was Easter was in April. And so that did have an impact. But, right now, we are assuming some of the headwinds we've been dealing with will continue into at least the early part of the second quarter.

Very good. And if I may, as a follow-up, more of a clarification. I think there have been a few questions on here that have tried to get to the same question. But to the extent that we could talk sort of pre and now post your taking over leadership role at Hertz, just trying to understand, if we were to look back at 2016, can you help us delineate how much of the underperformance was related to things that were sort of out of purchase control relative to some of the things that you mentioned, i.e., underinvestment in Dollar and Thrifty? And perhaps, as I read through that comment, perhaps some lost share to peers? Just trying to understand how much of it was sort of exogenous versus self-inflicted.

It's a great question, and I'm going to be very candid and honest about it. The move down to Estero, Florida, it's not – we have great talent here and we've been able to attract great talent here. One of the things that I've really been pleased about is consistently coming across people who are doing great things and are having an impact on the company. The challenge really was, in the move, we lost a significant amount of the people that were running the business. And over the last two to three years, we've been hiring back that talent and building back that team. But we lost a lot of – or the company lost a lot of momentum during that time, when very significant jobs and marketing and other areas of the company weren't getting done. And so now, the great news for me is, I am leveraging the talent and the great ideas that are out there, from a top line growth perspective, trying to make sure we climb that top list, (49:52) more investment and more focus, and bring back the type of operating rhythm that this company had in the past, both from a service perspective. But, I think more importantly, what we're doing around our digital channels, how we market and how we leverage our really best-in-class loyalty program, and how we really embrace and hold close our corporate customers. And then I think the final self-inflicted issue was incredibly optimistic demand forecast around the fleet, and buying a fleet in a couple of bad, misdirected ways, buying a lot of cars that weren't of the size and type that we could rent, and buying way too many of them, and not managing more rationally around the summer peak, and buying much too much fleet across the year to manage a couple of months. And so, if you think of everything that I just talked about, it's absolutely self-inflicted. Much of it is behind us. And I think we've been pretty consistent on, we are going to invest in this company and do the right thing, despite some pretty painful headwinds right now. So, it's not the operating – I would say, it's not the environment that I would love to walk into. I'd love to have – pricing is up, fleet costs are down, to do what I have to do right now. But I think we have a team and a plan that we're going to stick to, and that we see it bringing some goodness pretty quickly in the future, into later this year and into 2018. But as Thomas mentioned, the investments are going to continue for quite a few quarters at this point.

Your next question comes from the line of Hamzah Mazari from Macquarie. Please go ahead.

Hi. This is Kayvon Rahbar filling in for Hamzah. Could you walk us through some of your updated thoughts on the Donlen business and how you see synergies playing out between Donlen and the rest of the portfolio?

Well, you may or may not know, for five years – my last five years at GE, I managed the largest corporate fleet leasing business in the world. And so I – and it was a great business to run, profitable, and a lot of great assets and capabilities. I love the business, they're doing a great job. They've got great growth. They've got some great technology in managing the fleet that we expect to leverage across the car rental industry. It's a great business. We love it.

All right. Thank you.

Your next question comes from the line of Adam Jonas from Morgan Stanley. Please go ahead. Adam Michael Jonas - Morgan Stanley & Co. LLC: Hi. Thanks, everyone. Kathryn, first one for you, and kind of a follow-up on the last question. But any thoughts, high level, on strategic alternatives for the non-U.S. RAC operations, in particular International ops and Donlen, where there are some natural, let's say, logic to be part of the overall company, but perhaps exist in separate enough markets, either geographically or vertical, that that could achieve a better valuation for shareholders?

If you look at, we're – two points. We are a global world. And it is hard to exist in a global world if you don't have a global network. So, I think Hertz has built out a very, very competitive strategic global network, with a combination of franchisees and locally-owned businesses. And, given where the mobility world is going – when I was over in Europe and went through a pretty strong deep dive on some of the technology that's being developed over there, there will be very solid applications to the U.S. business, as well as maybe even Donlen. So, if you look at the requirements that are being put into place over in Europe around being able to locate a car if it's gotten in an accident, if you're a rental car company, and the applications that that will – we'll be able to use and apply over here in the U.S. once that's launched in 2018. And then you look out into the future around managing large fleets in the autonomous world. I don't think there is anybody better positioned in this industry than Hertz, with those three sets of assets, to lead in the future around mobility. We are great at managing fleets and we're great at it, both large corporate fleets as well as globally, and that is going to be an invaluable set of assets into the future. Adam Michael Jonas - Morgan Stanley & Co. LLC: Okay. Thank you, Kathryn. And just a follow-up for Tom or Kathryn about cap structure. You outlined, I think very briefly, Tom, some of the alternatives to term out those 2018 and 2019 maturities, which I think combined are about two-thirds of the market cap. I think over 100% of your cap is over the next three years. I guess the – you didn't mention equity. Where does equity stand, because one could argue that this business could use a little equity, and I know there's a cost to that, obviously. But is equity totally out of the question, or where does that stand in terms of a potential reconfiguration of the cap structure? Thanks.

Thanks, Adam. Yeah, we have no plans or intentions at this time for any equity issuance. We believe that, given our internal expectations on our performance improvement plan and the other actions that we may consider in the second quarter, such as the second lien that we'll provide that we have sufficient liquidity now through next summer peak, as I said, in 2018. And we have – opportunistically, we could pursue other debt instruments, such as the second lien to provide further capacity and provide further room. So, we don't have any plans for any equity issuance at this point.

Your next question comes from the line of Justine Fisher from Goldman Sachs. Please go ahead. Justine Fisher - Goldman Sachs & Co.: Good morning. The first question is just a follow-up on that junior lien issue. Can you tell us exactly what the size of your second lien basket is? And what the size, I guess, it wouldn't be a basket for junior ABS issuance, but how much capacity you have to issue junior ABS and the timing on what you're thinking on that potential issuance?

Yeah, Justine. So, we don't disclose what the size of the second lien basket could be, but it is fairly significant. So, there is quite a bit of capacity there for us. And, again, we haven't – we were ongoing evaluating our options and we haven't made a decision as far as timing. Justine Fisher - Goldman Sachs & Co.: Okay. And then the follow-up question is on the letters of credit. I saw that the letters of credit were up pretty significantly since the end of the December quarter. And this actually helped on the covenant compliant front because, correct me if I'm wrong, but I think you get to net LCs against the revolver size for the calculation of that leverage covenant. But per the 10-Q, the letters of credit are posted for your facilities and also for I think collateral for the ABS. So, can you talk to us about why the amount of LCs went up for the quarter and whether that's something that we should expect to increase going forward? I don't know if vehicle value changes, et cetera, like why that went up and should that continue to eat away revolver capacity or would it go back down in the future.

Yeah. Justine, yeah, that's correct. Our LC capacity increased about $190 million from year-end to first quarter. Some of that was related to, as you said, that's what (58:01) letters of credit are issued for: insurance reserves, airports, as well as, as you said, for our collateral securitizations. We did have some increase related to ensuring that we maintain, as we've talked about last quarter, our AAA rating on our Moody's rating. So, we put some additional capacity of collateral and the securitizations to maintain that AAA rating. We did have some additional collateral required for some insurance as well as just (58:27) precaution, we did increase some of our LCs and the securitization to ensure, as you said, that we can utilize that vehicle for management of our covenant. As you probably know from our financial statements, we have $1 billion of capacity LOC available in that revolver. The credit agreement does limit it to $800 million, to be clear. So, we can only from a credit agreement management standpoint utilize up to $800 million for that purpose.

And your final question comes from the line of John Healy from Northcoast Research. Please go ahead.

Thank you. Kathryn, I wanted to ask kind of a philosophical question. When I hear you talk about the businesses, you've talked about bolstering revenue growth, you've talked about how pricing is really dictated by supply industry and supply demand, that you can't really drive demand, you kind of have to take it. But you've also said that you don't want to pursue a utilization strategy at the company. I'm trying to understand why not. Because if I look at the remarks, there's stress on the operations that you're trying to fix. There's input costs that are rising and the company also has a little bit of stress in its liquidity metrics. So I'm trying to understand why you want to pursue a strategy where you're focused on utilization, you cut the fleet and you say, hey, we're going start to (59:44) at that point experience some pricing. Is it that you want to get back the market share that Hertz has passed (59:47) over the three or four years? I'm just trying to understand why you guys won't cut the fleet, allow the pricing to rise in the industry and, as such, fix the operations when you have more cushion?

Well, I find your question somewhat ironic given that one of our competitors consistently accuses us of over-fleeting and driving down the prices through over-fleeting. And yet, now, you're saying I shouldn't be doing that. And basically, that really is about, if I am driving down prices because I'm over-fleeting, it's basically our managing capacity. I have a ton of cars out there and I will take any business to bring some revenue against those cars. So, I'll go low, I'll drop price, and I'll do whatever it takes to spread the cost of those cars. And so, I find it interesting that you're questioning that, but most of the analysts are accusing us of damaging the industry because we're over-fleeting. So, it'd be great if somebody could be consistent on what they want us to do and what they think would work. We're pricing – and I'll say it again. We are going to go after profitable demand, right? Honestly, if you go too low, you guys can figure it out, you're going to lose money, you will end up losing money. There is a threshold that if you rent a car too low, you're going to lose money and you're going to impact negatively your EBITDA. And we are going to avoid doing that and have been and will continue to.

And at this time, there are no further questions.

Thank you. And have a great day.

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