Good morning and welcome to the Avis Budget Group First Quarter Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the meeting over to Mr. Neal Goldner, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Marcella. Good morning, everyone, and thank you for joining us. On the call with me are Ron Nelson, our Chairman and Chief Executive Officer; and David Wyshner, our Senior Executive Vice President and Chief Financial Officer. Before we discuss our first quarter results, 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. Important risks, assumptions, and other factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in the company's earnings release and other periodic filings with the SEC, which are available on the Investor Relations' section of our website at avisbudgetgroup.com. We provided slides to accompany this morning's conference call, which can be accessed on the website as well. Our comments will focus on our results, excluding certain items and other non-GAAP financial measures that are reconciled to our GAAP numbers in our press release and in the earnings call presentation on our website. In addition, as we announced in April, due to changes in our corporate management structure, we now have two reportable segments instead of the three previously. Our Americas segment consists of our operations in North America and South America; and the Caribbean, including Budget Truck Rental, our International segment; it represents our operations outside of the Americas. Now, I'd like to turn the call over to Avis Budget Group's Chairman and Chief Executive Officer, Ron Nelson.

Thanks, Neal and good morning. All things considered, we had a solid start to the year, highlighted by continued domestic pricing momentum in our flagship Avis and Budget brands, despite challenging weather conditions. Our overall results, while in line with our expectations in prior year's results, were affected by a number of items, both positive and negative. The three headlines that I would summarize the first quarter with are; one, weather played a significant role in the Americas results; the challenged growth in commercial volumes, which inevitably resulted in a cascade effect, lower volume, excess fleet, more difficult pricing. Two, used car values were stronger than expected. And three, timing related currency benefits allowed us to report results in line with last year's earnings. It's not a lot more complicated than that, but against this backdrop, we not only achieved forward operating momentum, but made some important strategic progress as well. Some of the elements of that progress include, revenue increased 3% in the Americas despite weather related challenges. We took advantage of a better than expected used car market in the U.S. to reduce our fleet costs and position our fleet for the upcoming summer peak. We made significant progress, not only in defining, but also in executing on the mobility innovations that will have applicability to our Zipcar operations as well as our traditional car rental operations. And we extended our global footprint by acquiring our Scandinavian licensee in January and Maggiore car rental in April. And just last week, we consolidated our Brazilian operation by acquiring the remaining 50% we didn't own. These three operations alone should add over $300 million of revenue annually. The top of mind for most of you I'm sure is pricing. So let me start there. Overall, pricing in the Americas was…

Thank you, sir. Our first question comes from John Healy with Northcoast Research. You may ask your question.

Thank you. Good morning. Ron, I wanted to ask a question about your view on pricing trend as we move into 2Q. I think you mentioned that May has reverse trend and showed some improvements. And I was curious to get your thoughts, whether it's been more of a behavioral change improvement in the market or if it appears just to be a function of fleet and demand more aligning with one another? I think you also mentioned the five price increases that you implemented in the market year-to-date. And was hoping if you could give us some color on in terms of how some of your competitors responded to those movements?

Hi, John. Yeah, I think it's a number of things, I don't think it's any one discrete variable. Clearly, I think there is a little bit of overhang of excess fleet with one of our competitors that is affecting pricing. I think, secondly, the calendar had an impact. If you remember last year, because of the late Easter, we had a fairly long spring break Easter period where we got good pricing in April for almost all of the month. Actually if you remember, our second quarter last year had fairly good pricing. It will be a tough comp this year. This year with the calendar Easter, Easter came somewhat early, it merged into spring break and some of the Easter business got booked into the first quarter and, therefore, fell out of the second quarter. So I think that had an impact on April pricing. I think as fleets start to tighten up a little bit and people are selling more cars to take advantage of the used cars, we're starting to see pricing turnaround in May. I don't think the competitor behavior has been any different, quite honestly, in this year than it has been. As I said in the script, I think it's been a little bit better. The challenge with this is that it's not just a competitor moving prices, it's you got to have some harmony in terms of moving prices and what we've seen in a couple other price increases that one competitor will move and another one won't. And then you do another one and the other competitor will move and the other one won't. And so it does take some harmony in order to get some moderate level in pricing. But look, we're continuing to push. We think that pricing should move over the course of the second quarter and should be good in the third quarter. And the things that we see going on at the auctions in terms of de-fleeting by competitors give us some encouragement that fleet levels are going to get in line with demand, which will speak well for increased pricing.

Thank you. Our next question is from Christopher Agnew of MKM Partners. You may ask your question.

Thanks very much. Good morning. I was wondering if I could ask for a little more color on Payless and the mix impact and why it's such a large impact given that you've lapped that acquisition. Can you give us any color on volume growth and how different the price point is? Thank you.

Sure. The simple answer, Chris, is that when we acquired Payless, we had 12 corporate markets. Over the course of the summer between the markets we acquired from Advantage and the markets we acquired from ACE and markets we opened, by the end of the year actually, Payless was up to 61 markets. So you got 61 markets, lapping 12 and that's what's creating the volume impact. Same-store volume is up and revenue is up, but aggregate revenue was up significantly largely because of the increased markets. We should lap that by September, I'm going to guess, the 61 markets, and so you'll start to see a more normalized impact from Payless. And frankly, the ability and our ambition to grow Payless is much more constrained over 2015. If we grow another 15 markets in Payless, I would be surprised.

Thank you. Brian Johnson from Barclays, you may ask your question.

Yes, good morning. I've got both a guidance question and then sort of a mid-term strategic question. On the guidance question, could you just give us some context on maintaining your guidance range of $900 million to $1 billion. I just want to kind of go through the various puts and takes. Your fleet guide cost, looks to us, it would add about $45 million, the Maggiore deal should add $10 million, so that's a $55 million benefit. And if we use the updated pricing, that's about a $20 million headwind, say, $7 million for legal, let's just round up and call that maybe a $30 million headwind. So it kind of seems like net-net, your – could be slightly up. So that's still positive. Are there other negative factors that you considered particularly that you said upper-end of the guidance would be a stretch? David B. Wyshner - Chief Financial Officer & Senior Executive VP: Brian, I think those are really the right items that you've identified. And clearly the key ones in there are what we saw in the first quarter in terms of pricing being a little bit softer than we had expected and the used car market being a bit stronger. And so as you highlighted in your walk-through, those are the key ones driving what we're seeing and feeling. We've got a few million dollars of additional impact from currency effects, although that's still rounding to around $40 million. And you're right to point out the legal accrual is $7 million in the first quarter, because that was not part of our expectation going into the year.

Thank you. The next question is from Kevin Milota from JPMorgan.

Hey, guys. Appreciate it. Trying to get a sense for cadence on how you're looking at pricing for the year. And obviously North America down 40 bps in the first quarter, International down close to 18%. How should we think about how pricing plays through in the second quarter, third quarter, and fourth quarters for both regions?

I'm sitting here today, Kevin. I don't see any reason why the cadence on pricing would do anything other than follow the pattern that it's followed over the last couple, three years. Pricing has historically been a challenge in the second quarter, although last year would dispel that notion. So I don't think the second quarter will see significant pricing gains. I think in the third quarter, it was largely dependent on travel. The economy is good. Airlines are at capacity. They're projecting greater employment growth than they have over the years. And I think in Europe, the decline in euro actually should do well for our southern regions, Italy, France and Spain. And we're encouraged by what we see in the early booking patterns. And then as I mentioned, we got hit with the World Cup last year. We didn't nearly see any summer pick-up until late July, when usually it's late June, early July when you see that. And Easter season was good in Europe and Easter tends to be a good predictor of where the summer is coming out. So I think the only thing that I would just keep in mind, thinking about cadence, is that Q2 from last year is a tough comp and has a lot to do with the change in the calendar between Easter year over year.

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

Hey, guys. Good morning. I want to ask you a little bit about visibility on the business and whether maybe relative to last year, and I'm kind of referring to peak season, you think you have maybe a little bit more visibility? And is any of that being driven by some of the shifts in the channels, the booking channels? And are you seeing any different behavior in terms of length of rental or anything like that for the peak season?

In the Americas, Chris, we have no greater visibility this year than we did in other years. As you know, we get 50% of our bookings within the last seven days prior to the rental, and within 14 days we get an even bigger percentage, obviously. So I don't see any change in visibility. I think that in Europe, the same level of booking patterns is continued. I don't think they have any greater visibility, although Europe does to tend to book earlier and that's why early booking patterns are more significant in Europe than they are in North America. But I think the things that we'll look at, quite honestly, is that the hotel business, particularly Marriott, tends to be a fairly good predictor of where volumes are going. And the economy overall – I think everybody is – the pundits are looking for somewhere between a 2% to 3% growth in the domestic economy in the second quarter. And with fuel prices down, that should suggest a much greater propensity to travel. So I really think it's more the macro issues that would give you more visibility than our res build.

Thank you. Our next question is from Anjaneya Singh with Credit Suisse. You may ask your question. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC (Broker): Hi. Thanks for taking my questions. Appreciate the comments earlier on the weaker euro for the Southern Europe region. Just wondering if you can discuss how FX is affecting demand trends in your business, perhaps with some additional detail on International inbound. It looks like it grew decently despite a really tough comp and, like we say, some of the same weather disruptions? David B. Wyshner - Chief Financial Officer & Senior Executive VP: Sure. The effects so far on demand have been relatively muted. We were – I think we were pleasantly surprised over the first three or four months of the year to see volumes into the Americas continue to be strong, and we haven't seen much of an impact there. And then as we look ahead to the summer, we have to expect that we're going to see some incremental benefit in terms of demand in Europe from inbound travelers. It's early in the booking curve to be able to tell that right now, but everything we're hearing suggests that that's a reasonable expectation. So we're hopeful that that will be helpful to the summer in Europe. And obviously that represents a much more significant portion of European travel than it does in the Americas.

Thank you. Our next question is from Afua Ahwoi of Goldman Sachs. You may ask your question. Afua A. Ahwoi - Goldman Sachs & Co.: Hi, guys. Good morning. Just two quick questions from me. First on the fleet costs, is there anything specific you can point to that you're seeing that are driving better fleet costs, whether it's higher new car prices, better supply, demand in the market? Is there anything specific you can point to? And then the second one, I guess I'm still trying to understand why the fleet – and why you and the industry should have been so over-fleeted in 1Q. Did you come in planning for fleet levels in line with the norm and then, because of how the winter storms shaped up, that had an impact, or did you assume there would be some growth from last year even despite the fact that last Q1 benefited from I guess a better, tighter fleet because of the way the winter storms shaped up? I guess just some more color there would be helpful. Thank you. David B. Wyshner - Chief Financial Officer & Senior Executive VP: Sure, Afua. With respect to what we're seeing in terms of fleet costs, there's not any one particular driver or big surprise there. Demand has been good throughout. I think we may be benefiting a little bit from the fact that we're continuing to sell cars in what we consider to be the sweet spot for used vehicle sales, typically between 28,000 and 40,000 miles, and that's been helpful to us. And, generally speaking, I think that demand patterns have been good in the used car markets. With respect to the second question, regarding our utilization, I don't think that we came into the quarter over-fleeted. I do…

Thank you. Our final question comes from Brian Johnson with Barclays. You may ask you question.

Thank you very much. Just wanted to follow-up on the kind of fleet sizing, fleet utilization issue, just kind of upon that. To what extent does the fleet get back into shape? And if they do get back into shape, what does that imply about your guide? David B. Wyshner - Chief Financial Officer & Senior Executive VP: Yeah. As I was saying, Brian, I do think fleets are going to be in line with demand based on what we're seeing. We feel good about our fleet levels and I expect our competitors' fleets will be even more in line with demand over the remainder of the year than they were in the first quarter. What that means for our projections is I think that's built into or assumed in the projections that we have. We are not assuming a significant under fleeting or over-fleeting by us or by our competitors over the remainder of the year.

Well, you mentioned weather, which I presume will be January-February, can you give us a sense if you look at March how the utilization shaped up there, especially as that's beginning to be when fleets are beginning to be expanded for spring travel? David B. Wyshner - Chief Financial Officer & Senior Executive VP: Sure. Utilization strengthened in March as you'd expect for those reasons. And I think as we highlighted in the call, we saw very – we saw strong pricing, up 5% in Florida over the course of the quarter. And the reason we included that data point is that Florida is an area that largely was not impacted by weather, and so we ended up with, generally speaking, the amount of demand that we had fleeted for, and we were able to get pricing in that sort of environment. And so, that is a – I think that's an important data point for why we feel good about the industry's ability to be right fleeted and about what that would mean for our realized pricing as we go out into a less weather impacted portion of the year.

For closing remarks, the call is being turned back to Mr. Ronald Nelson. Please go ahead, sir.

Thanks, everyone. Before I close, I think it's important to reiterate what we believe are the key points from today's call. We had a solid beginning to the year despite the effect of winter storms. Pricing in our U.S. Avis and Budget brands did increase in the first quarter and we're cautiously optimistic that as the industry fleets get in line with demand, we'll be able to achieve better pricing. Fleet costs continue to be better than expected and we've moved aggressively to take advantage of the strength of the used car market. And early indications are that Europe could have a very good summer, while pricing in Australia appears to be normalizing. We do have a full investor calendar this quarter starting with the Baird Growth Conference later this week, and we look forward to seeing many of you during our travel. With that, I'd like to thank you for your time and interest in our company.

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