Good morning, everyone, and thank you for joining us. By now, you should have our earnings press release and associated financial information. We've also provided slides to accompany our conference call, and these can be accessed through the Investor Relations section of our website. I would like to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not a guarantee of performance, and by their nature, are subject to inherent risks and uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call speaks only as of today's date, and the company undertakes no obligation to update that information to reflect changed circumstances. Additional information concerning these statements, including factors that could cause our actual results to differ, is contained in our earnings press release and in the Risk Factors and Forward-Looking Statements section in the filings we make with the Securities and Exchange Commission. Our filings are available on the SEC's website and the Investor Relations section of the Hertz website. Today, we'll use certain non-GAAP financial measures, which are reconciled with GAAP numbers in our earnings press release and earnings presentation available on our website. We believe that these non-GAAP measures provide additional useful information about our operations, allowing better evaluation of our profitability and performance. Unless otherwise noted, our discussion today focuses on our global business. On the call this morning, we have Gil West, our recently appointed Chief Executive Officer; Alex Brooks, our Chief Financial Officer; and Justin Keppy, our Chief Operating Officer. We are also joined by Darren Arrington, our Executive Vice President for Revenue Management and Fleet. I'll now turn the call over to Gil.

Well, thanks, and good morning, and thank you all for joining the call today. I want to acknowledge right upfront that this was a challenging quarter for Hertz. We have a lot of work still to do, and I'll get to that shortly. But since I'm new to most of you, I want to take a few minutes to introduce myself before we dive into the numbers. So let me start by saying that I'm excited to be here. And there are a lot of reasons for that. First, this is a great company with an iconic brand. Hertz invented the car rental business and has introduced many innovations over the years. I've been looking at the brand data and talking to customers, and I'm struck by how many of them have been fiercely loyal to the brand. And I've been one of those customers for a long time. Customer loyalty is the key to success in a business like ours. I'll come back to that point. Second, I'm deeply impressed by the Hertz people I've met: at the airport rental counters, in our behind-the-scene operations, in our call centers, and at our headquarters here in Estero. They are committed to the business and want to win. They are full of good ideas and have a deep desire to serve our customers. Third, I see enormous potential for the company. Hertz has over 100 years of experience managing physical assets and operations at scale. We acquire nearly 20 million unique customers a year, operate over 11,000 global locations, drive 80% utilization of assets, and have over 0.5 million vehicles. And this creates a powerful platform that positions our company well for the future. Fourth, and this is personal, but I love cars. I got my start in my father's auto parts store when I was a kid. I've repaired, traded, collected, and raced cars as a hobby my whole life. So leading a company that's in the business of cars is a dream come true for me. As I've said at the beginning of the call, we have a lot of work to do. So getting ahead of our challenges is what we owe our customers, our people, and our investors. And I look forward to leading the team to make it happen. As I'm settling into my new role, there are a number of key priorities I'm focused on. It starts with having the right fleet, balancing short-term decisions with long-term implications to drive a better return on assets. This includes making sure that we have the right supply and demand balance of our fleet, at the appropriate capital cost. Decisions around our fleet are based on return on expenses and the discipline of fleeting inside the projected demand curve to ensure we achieve favorable revenue per day and revenue per unit performance, along with better managing our residual value risk. Next is delivering operational excellence, which is fundamental and leads to best-in-class unit cost and a superior customer experience and, in turn, higher unit revenues. We must leverage our products, our fleet, our brands, and our customer experience to keep customers coming back and delivering a value proposition which commands a higher yield. We also must deliver on our operational cost and productivity initiatives that you heard about on our last call. And I'm an operations expert and have been for most of my career. For me, operational excellence is essential, and execution is the key. So in my prior life with the airlines, I was part of the team that transformed the industry from leveraging operational excellence and our products to deliver a better customer experience. And through that customer loyalty, we were able to deliver unit revenue premiums to the industry, achieving unprecedented profitability. Putting those same pieces together here at Hertz will unlock premium revenue and put us in control of RPD to drive growth, profitability, and value. So while it's early days for me, I'm eager to look further down the road at more ways Hertz can compete and win. But none of that is to take our eyes off the short-term operational priorities. Our quarterly results were unacceptable and reflected the impact of a decline in forward residual values used to determine vehicle depreciation, coupled with our EV rationalization and elevated cost structure. While overall demand for travel remains strong, our RPD remains well above pre-COVID levels. Our revenue performance is not fully capturing the opportunities available to us. This is also an immediate focus area for the team, and as we've said previously, 2024 will be a transition year for us. The necessary work is already underway. I know Hertz people wake up every morning eager to run the best operations possible to delight our customers, win their loyalty, create value, manage costs, and win in the marketplace. That's why I'm energized to be here, and that's why I'm so optimistic. I look forward to your questions later in the call. But first, I want Justin to bring you up to speed on our delivery against our operational commitments, and then Alex will do the numbers. So Justin, over to you.

Thank you, Gil, and good morning, everyone. Revenue for the quarter was $2.1 billion, and we recorded negative adjusted corporate EBITDA of $560 million, heavily impacted by higher than usual depreciation expense and EV charges. Alex will go deeper into Q1 financial performance. As Gil stated, we have challenges to address. We have a broad understanding of the drivers pressuring performance. Over the last 3 years, anomalous supply events in the auto industry impacted our business in various aspects of the P&L, including elevated maintenance, higher cost of collision and damage, and most recently elevated vehicle depreciation. Coming off of peak residuals and new vehicle purchase prices of 2022, used car prices have decreased over the last 12 months and new vehicle cap costs are only recently moderating. We expect this moderation to continue and that the elevated P&L impacts will subside. But in the interim, these events exposed other opportunities in the business beyond the acute EV impacts, which we are addressing with a concerted focus on rotating the fleet mix towards lower mileage and lower capital vehicles which will have a direct positive impact on reducing vehicle depreciation and direct operating expenses. On that note, let me share a few updates on our fleet and strategic initiatives prior to providing status on our productivity progress. Starting with our fleet. As discussed in the Q4 earnings call, we entered January at an elevated level. And for the quarter, our global average fleet was up 9% year-over-year. We depleted throughout the quarter, and by March, our core rental fleet was tighter, up only 2% year-over-year. We plan to maintain tighter as we move into the summer season, which we expect to correlate with improved RPD performance, coupled with easier year-over-year comparisons. Looking at the composition of our fleet, we are addressing the mix to lower the average capital cost and reduce the tail of higher mileage vehicles. Elevated capital costs are the consequence of a relative vehicle shortage and higher trim levels and MSRPs which characterized recent vehicle purchases, inclusive of preowned vehicles. As we refresh the fleet, the cost and age profile is expected to reduce with corresponding improvements in vehicle depreciation and direct operating expenses. With our recent vehicle purchases, we are having more influence on make and model mix, and trim and option configurations, which is bringing down our capital costs. We expect this trend to continue, and we'll continue to manage this critical input in line with our return on assets focused approach to our vehicle purchase decisions. Within our rental car fleet, we expect to reduce vehicles with higher mileage by 75% and complete the rotation out of preowned vehicles by early 2025. This fleet refresh is expected to result in lowered vehicle depreciation, lower direct operating expenses, and deliver an improved customer experience. Turning to EVs, we previously announced our plan to reduce the EV fleet by 20,000 units. By the end of Q1, we sold about half of them. Given this progress, we increased the EV disposal plan by another 10,000 units, bringing the combined reduction to 30,000 vehicles, which we expect to complete by the end of the year. Upon completion, we anticipate that the remaining EV fleet will be better aligned with attractive demand for EVs with a priority on our rideshare business. Alex will discuss the impact of these sales during the financial overview. Now let me transition to our profitability initiatives. To echo Gil, our profitability initiatives are designed to improve unit economics through revenue as well as costs, with an opportunity to generate an incremental $500 million of adjusted corporate EBITDA. They fall into 3 categories. First, we are focused on the creation of profitable incremental revenue by growing rideshare and improving our European and value brand businesses. Second, yield enhancement on existing assets. These are initiatives designed to improve the yield on our core business and the assets deployed against it through a focus on improved revenue management. And third, our relentless focus on productivity and cost, reducing both direct operating costs and SG&A. Overall, of the $500 million in the recurring adjusted corporate EBITDA improvement, we expect approximately two-thirds to be cost-driven and one-third to be revenue-driven. I will briefly highlight some of the progress on our revenue activities before going deeper into cost. Starting with our value brands. We are focused on improving both net promoter score and revenue per day. In Q1, we launched new digital tools that enable skip the counter, reducing wait times and improving customer satisfaction. We plan to roll this capability out to our top airports prior to peak season. Direct booking momentum is building on our dollar.com website, and recently, we launched a nonrefundable prepaid booking option, which is gaining traction with our customers. Our Q1 expansion of Dollar Thrifty brands to our North America off-airport network is also showing promise and offers adjacent complementary growth beyond our airport locations. Turning to our rideshare business. We are well positioned, and I am pleased to report that we've renewed our partnerships with both Uber and Lyft. Rideshare presents an attractive demand for both EVs and internal combustion engine vehicles and offers an adjacent growth opportunity, lessening the impact of seasonality in the core rental car business. With revenue management, we saw double-digit year-over-year improvements in our value-added services revenue through enhanced offerings, with a focus on selling upgrades. We expect to have further innovation within our value-added services product offerings to be a tailwind going forward. Lastly, we launched our Hertz and Dollar brands in T-Mobile's Magenta Status program, and we recently renewed our long-standing strategic relationships with the Air France-KLM Group and Marriott. We are also excited about our expanding relationship with Signature Aviation in the private aviation space. Shifting to operating costs, direct operating expense, or DOE, per transaction day was $37.08 in the first quarter, flat versus Q4 despite seasonally reduced transaction volume and inflationary pressures. We anticipated that Q1 would be a period where we ramped up our productivity and cost benefit activities, resulting in $250 million of savings realized in 2024, which are to be realized through the year but are back-end weighted. So where are we on the productivity and cost benefit journey? We are seeing momentum building on these efforts, and I believe we are on track to achieve our 2024 targets. We have detailed action plans, a governance process, and are in full execution mode. During March, we saw progress on these cost items, and our DOE per day showed sequential monthly improvement. Our March DOE per day was $35, 5% lower than the quarterly result and 2.5% lower than Q1 of 2023. I foresee the run rates on the actions initiated so far will account for more than half of our annual target, but we are far from done and expect accelerating momentum into the second half. To share some examples of progress across the business. We have taken headcount actions and reduced third-party spending with line of sight to $100 million year-over-year improvement. In Q1, we closed 125 underperforming locations. We are in the final stages of contract negotiations for providers of our major commodity categories and anticipate productivity as we consolidate the spending. We continue to reduce the size of our EV fleet, resulting in lower operating costs, specifically with a reduction of transportation costs associated with remote charging. We rolled out enhanced workforce management tools to our top airports, tightening our third party and overtime by nearly 400 FTEs in North America. While damage and collision are showing inflationary headwinds, we are mitigating the full impacts through digital vehicle incident reports and counter collections, and we expect to start seeing benefits from the EV defleet and overall fleet rotation as we head into the second half. All cost areas are being assessed and new opportunities are being added to the pipeline, with March productivity exit rates providing a good baseline to build from. The entire organization is mobilized on both revenue and productivity to deliver improved profitability. Now let me turn it over to Alex.

Thank you, Justin, and good morning, everyone. Revenue for the quarter was $2.1 billion, slightly up year-over-year, driven by an increase in volume. We recorded an adjusted corporate EBITDA loss of $567 million, which is disappointing and unacceptable. Although we continue to be impacted by elevated costs, which Justin covered, the key driver of the loss is the increased vehicle depreciation, which has increased $588 million year-over-year. For the first quarter, direct per unit was $592, of which $119 was due to incremental vehicle depreciation expense related to the EVs held for sale. We recorded a charge of $195 million to recognize a fair value adjustment for EVs remaining in our inventory at quarter-end, and to recognize losses on those units sold. Direct per unit, excluding the EV charge, was $473 and is elevated due to declining forward residual estimates. Taking a closer look at revenue, revenue per day of $56.68 followed typical sequential seasonal trends. The year-over-year decline narrowed as we moved through the quarter. January RPD was down 10%, while March was down only 3% year-over-year. We see the March trend continuing through April. We believe this rate performance to be the consequence of intra-quarter seasonality and the tightening of supply. Volume for the quarter increased by 9% compared to 2023, driven by higher volumes in leisure and rideshare. Exiting the quarter, our rental car fleet was up 2% compared to the prior year, which demonstrates the deliberate actions we took to adjust our fleet level. Fleet tightness improved month-over-month as we systematically disposed of excess vehicles that we carried into the quarter. As a result of early over-fleeting in the quarter, utilization was down 120 basis points year-over-year. Overall, for the quarter, our adjusted corporate EBITDA reflected elevated vehicle depreciation, further burdened by the nonrecurring EV charges and an elevated cost structure that does not yet include the benefit of our various cost initiatives. In particular, the natural rotation of our fleet expected to occur fully over the next 18 to 24 months will allow us to materially reduce vehicle capital costs and better match vehicle types to demand. This rotation will drive a decrease in direct per unit to the low 300s and a corresponding reduction in collision and damage expenses as well as maintenance expenses, both of which burden direct operating expense. Turning to our capital structure and liquidity. With respect to our balance sheet, net corporate debt at the end of the first quarter was $3.25 billion. While this places us above our long-term leverage ambition, we intend to deleverage over time as our operational initiatives yield improved profitability. I would remind you that our net corporate leverage ratio is not comparable with our first-lien covenant ratio, which only applies to our first lien debt. In terms of the first-lien debt, earlier this week, we announced an amendment to the financial maintenance covenant in our credit agreement for the first-lien revolving credit facility to temporarily increase the consolidated first-lien leverage ratios. We took the opportunity to create additional operating flexibility for the company as we work through the fleet rotation and improved profitability initiatives. Our available liquidity at March 31 was $1.3 billion, comprised of $465 million of unrestricted cash and the balance available under the first-lien revolving credit facility. At March 31, we had $2.7 billion of capacity under our vehicle debt facilities globally, with a portfolio that was approximately 70% fixed rate. We maintained sufficient equity cushion in our global ABS facilities. Earlier this month, we extended the maturity on our $3.8 billion U.S. ABS variable funding note facility from June 2025 to April 2026. We believe we have sufficient liquidity to execute the fleet refresh discussed earlier. Turning to our cash flow. Adjusted free cash flow for the quarter was an outflow of $729 million. Although the first quarter is seasonally a negative cash flow quarter, the size of the outflow was driven by the quarterly results. Despite the challenging quarter behind us, I believe we are pointed in the right direction, and we have credible plans to achieve success. We're operating in a constructive travel environment with demand showing continued year-over-year growth. We will not add vehicles to the fleet simply because they are less expensive. Instead, we strive to stay inside projected demand. We know that the value of the business is enhanced by a disciplined approach to fleet management. A final comment. We have outlined the meaningful initiatives that are in place to improve the financial results of the company. As we work through the implementation of those initiatives, we will hold off on formal quarterly guidance. I'm going to hand back to Gil for closing remarks before we go to Q&A.

Thanks, Alex. Yes, before we go to questions, I'd like to leave you with a view of what a transition year means for us. It's about setting ourselves up for long-term success in 2025 and beyond. It's about being great at the basics. So operational excellence, customer service, and using that as a springboard for productivity and revenue growth. We're setting up the fleet to move direct per unit from being a headwind to a tailwind by rotating the fleet, lowering vehicle capital costs, optimizing fleet mix, and increasing retail sales and mitigating residual value risk. This is also the year of growing premium revenue, getting Dollar Thrifty on RPD and NPS parity with the marketplace, and creating a unit cost advantage. Lastly, it's about using technology and leveraging it as an enabler for all the things I've just mentioned. Staying focused and executing on these things throughout the year positions Hertz for success going forward. I'm energized to be leading Hertz. We know we have big opportunities, and we're attacking them in order to drive the unit economic improvements for RPD, DOE per day, and direct per unit. As an operator, I'm going to be obsessed with execution as we move forward. So with that, let's open up the call for Q&A.

Our first question will come from Chris Woronka from Deutsche Bank.

Gil, welcome to the company. I guess, look, I know it was a rough quarter and, Gil, you're very new to the seat, you've been there, I guess, a little over a month. But I wanted to start off with just kind of maybe you can give us a general overview of kind of where you see this business going. And if you want to draw parallels to the airline business or something else. But just your higher-level views on where this business could get to. And then I have a follow-up.

Yes. First, thanks for the welcome, Chris, and the question. So yes, first, I see a lot of potential for Hertz. I think we've got to stay focused on unit economics for the business. There are many inputs, of course, but the combination of the vehicle depreciation rate, unit costs and unit revenues are the most influential on our earnings. As we're sitting here, our direct per unit is over $400, our direct operating expense per day is at $37, and our revenue per day at $57, which is not where we want to be for our business. We're highly focused on our operations and our customer experience and products along with our go-to-market approach and our fleet management to achieve a more sustainable combination of the inputs. We want to create a business that's resilient and can be successful in a wide range of macro and other economic scenarios. The best way to do that is to optimize our unit economics. RPD and DOE per day have the ability to improve faster than direct per unit. So even though the residual values and new vehicle prices can normalize quickly as we've been seeing recently, direct per unit ultimately requires a fleet rotation, which is a function of our hold period. Timing is just naturally going to lag. From everything I've seen so far, as I think about the business longer term, we need to work towards some North Stars. We need to be able to pass through inflation and other cost pressures in revenue. So pushing RPD into the low 60s. As our fleet plan changes start to land, as discussed, direct per unit reduces to the low 300s. The product initiatives that Justin updated us on should enable DOE per day to reach the low 30s. These are attractive unit economics that produce financial outcomes significantly better than where we sit today. However, we've got to pull all the levers to achieve these metrics over time, and we've got to be disciplined around fleet and prioritize rate. We also need to run leaner and continue to improve utilization while growing retail vehicle sales through our partnerships. Beyond that, I see additional growth opportunities beyond our core rental car business. But we've got to stay focused on the basics first. Thank you.

Okay, very helpful. I have a follow-up question that might be more suited for Justin or Darren, as it relates to fleet details. I'm trying to understand your comments about exiting March with a 2% increase in fleet. As you aim to grow the fleet at a rate slower than demand, how should we interpret that for the remainder of the year at a high level? Does it suggest that demand will grow at less than 2%? I’m also curious about how you manage your fleet. If you are selling EVs, how many additional ICE cars are you planning to sell? Is it a one-for-one replacement? Any insight on that would help clarify how you expect utilization to trend for the rest of the year.

Sure. Thanks, Chris. So you've got it right on the fleet. We exited the quarter with our core fleet up only 2%, which we feel like we made really good progress throughout the quarter to get that fleet under control. You can expect that we will keep that tight and underneath the indications of where travel is. We see travel indicators, including data from the airlines and ticketing data on advance that are up in the mid-single-digit range. You can expect that our fleet plans right now have a similar gap in terms of our growth relative to that as we go through the peak here. We believe it's critical to keep the fleet well underneath where the demand is at, to give us the best chance to work our mix optimally and secure good yielding opportunities. What I'd say on the fleet is that as we rotate out of EVs, we realized lower utilization than we really want to maintain for the EV fleet we have. Hence, as we continue the rotation of EVs out of the fleet and replace them with an ICE car, we do not need to replace them on a one-to-one basis. We also benefit from lower cap costs by transitioning from EVs, which tend to be higher than what we'd have on replacement ICE vehicles.

Gil, I have a similar question since you have been with the company for a long time. As the new CEO, what will you prioritize for investors and analysts? Should we expect any major changes or shifts in strategy? There was some mention in the prepared comments about a premium, and I'm curious about what that means, how you plan to achieve that, and what it involves. I also have a follow-up question.

Yes. Thanks, Ian. You were breaking up a bit, but as I understood the question, it was really around priorities and strategies as I come in. I'll touch on that a bit. The focus I'm driving really starts with what I would call great at the basics. It's about operational excellence and customer experience. These two areas will unlock the unit cost and premium revenue opportunities. We will have a renewed focus on rebuilding our foundation, which is an ongoing process of continuous improvement. I want to reiterate the three pieces we touched on: fleet, which we see moving from being a headwind to becoming a competitive advantage. We need to rotate out of our inflated vehicle capital costs and do that in an orderly fashion as the market normalizes, rationalizing our EV fleet, while also enhancing demand and product market fit. So we're optimizing our EV allocations, especially in the rideshare business. We've also got to improve our fleet mix in line with core customer demand as we rotate out the fleet. Additionally, big opportunities exist to keep driving our retail sales channels and mitigating our residual value risk. Revenue also needs to be improved; we need to enhance our revenue management and boost premium revenues starting with the customer experience to create a differentiated sticky experience. We need to elevate our revenue management tools and talent as needed. In particular, we need to elevate the Dollar Thrifty brands, their experience and net promoter score, bringing them to RPD parity with the marketplace. Our focus on profitable growth in rideshare continues. We also see growth opportunities in international markets, especially in the EU under Elias' leadership, and we’ll keep expanding our value-added services. Lastly, regarding cost, we have an extensive and growing list of initiatives, and with fresh eyes, I see many opportunities we can add to the list. We need to leverage technology as an enabler for all these aspects. The fleet rotation will provide a tailwind on direct operating costs that we must capitalize on. Exploiting supply chain management, where we have about $3 billion of spend, presents another significant opportunity. Overall, my priority is to execute strongly.

This is Alex. I'll start with the question on ICE versus EV residuals, and then hand it over to Justin. We observed that EV residuals decreased at a faster rate than those of ICE vehicles during the quarter. This was reflected in the adjustments we made to the EVs available for sale. We incurred a loss on the EVs that were sold during the quarter compared to their value at the end of the previous year. Additionally, we had to acknowledge a mark-to-market loss on the EVs we were holding in inventory. Together, these losses amounted to about $81 million, which was recorded in depreciation expense for the quarter. Now, I’ll pass it over to Justin for further details on the movement of the 10,000 vehicles.

Yes. Thanks, Alex. We're about providing our customers with choice, and we do see attractive demand for EVs. Rideshare markets, which continue to grow, are up over 50% year-over-year from a quarterly basis. We also see demand for both EVs and ICE vehicles at off-airport and airport locations. Our mantra is our return on assets mindset and keeping our supply inside of demand. We're proceeding with rightsizing for the incremental 10,000, bringing the total number of EVs earmarked for sale to 30,000. We sold about 10,000 in Q1, putting us on track to meet the 12-month hold-for-sale sale period while continuing this momentum. If we successfully right-size our EV fleet, it will better align with demand, which we expect to improve both utilization and revenue per day as they are matched with customers who seek out EVs. Additionally, it will reduce potential collision incidents with renters unfamiliar with operating new EVs that might otherwise have chosen to rent an ICE vehicle. With the reduction of fleet carrying costs and lower operating costs in maintenance associated with remote EV charging, we expect a combination of benefits from further reducing the 10,000 vehicles to rightsize supply with demand.

I guess, my first question is just on the liquidity front. I mean we've received a lot of inquiries from investors on this. And I was wondering if you could just talk about what tools you have to boost liquidity. That would be useful. And then also just how you're thinking about it, particularly in line with refreshing the fleet and how you'll execute on that and whether that potentially entails reducing the fleet. You did mention keeping supply below demand, so maybe that's the answer, but could you speak about that broader?

Yes, John, this is Alex. Thanks for the question. I said it in my prepared remarks, but it's worth repeating: we have sufficient liquidity to complete the refresh as we've planned for it. In terms of managing liquidity, you're correct to point out that fleet management is a major tool we utilize. Our plan for fleet rotation includes offloading some of our higher capital cost vehicles, allowing us to purchase new cars at a lower cap cost. This will improve our liquidity since the debt from new purchases will be less than the debt currently held on the higher cost vehicles. We have visibility into our needs for the end of this year and we anticipate maintaining adequate liquidity.

Got you. And then next question, I know you're not providing any sort of quarterly guidance, but can you provide some qualitative guidance on how we should think about fleet costs over the year because it's unpredictable from quarter to quarter, especially given the decline in used prices?

Yes. I believe Darren's comments regarding fleet size relative to overall demand and how we are maintaining a tight fleet should provide insight on expectations for fleet costs. Taking into account fleet size and the upcoming rotation of higher capital cost vehicles for lower capital cost vehicles, we expect fleet expenditure to remain relatively stable through the end of the year.

Alex, I wanted to ask a question about fleet cost, maybe dig in a little bit deeper on the Americas side of things. I think you reported $876 million of expense there. I know you've called out the $81 million and the $195 million, which gives us around a $600 million number of expenses on the 450,000 cars, suggesting kind of a fleet cost number of around $440 per vehicle per month. Can you help us understand what else is in that number and maybe what the base level of depreciation is without the adjustments you're running through for the EVs? Also help us understand the ICE rate versus the EVs that are left in the fleet rate?

Sure. Let me unpack that a bit for you. We had $969 million of depreciation expense for the quarter, of which $195 million was tied to the EV held-for-sale charge. On a per unit basis, that brings us to $592 all in—$119 was related to the EV charge. Therefore, the net depreciation per unit, excluding EV charges, was $473 per unit. The increase in net depreciation is driven by expected residual values at the time of disposition, as well as increased losses from vehicles sold in the quarter. To give you a better picture, gross depreciation per unit for Q4 2023 was about $315 per unit, increasing to about $423 per unit this quarter, reflecting an approximate $100 quarter-over-quarter increase. Regarding your question about ICE versus EV vehicles, we've found that EVs continue to depreciate more severely than ICE vehicles. We're continuing to defleet vehicles while recognizing that both ICE and EVs are experiencing residual value declines.

Just one follow-up question on fleet rotation. Understand there are challenges there and it takes time to rotate the fleet. So I was hoping to ask you, do you think it takes 9 months to rotate the fleet before it's ideal? Or is this more like an 18- to 24-month dynamic that we'll have to consider to optimize the fleet for Hertz?

So John, this is Darren. For the fleet rotation, based on our holding periods, we anticipate it will take us into 2025. We are looking at more of an 18- to 24-month rotation of our fleet to achieve a comprehensive refresh. However, we're making progress each month and quarter. The pre-owned cars we've bought at peak values will be mostly gone by early 2025. Some new cars purchased at peak values will take longer to cycle through. We're seeing rotation as our ability to integrate better, lower capital cost vehicles into the fleet, which will improve rapidly as we reduce the number of older vehicles.

I wanted to revisit the liquidity point. The cash burn was much higher than expected this quarter, and there’s focus on the equity cushion in the ABS and potential injection of cash there. Did you take a debt holiday over COVID, which now you have to pay back? Could you walk me through the moving pieces in terms of understanding cash flow this year and the liquidity piece?

Yes, Lizzie. Regarding ABS, we have a sufficient equity cushion. We are comfortable with our standing today and at quarter-end. As a reminder, ABS depreciation works at 1.67% per month, and we’re exceeding our historical depreciation rates by calculated advances. In a stable residual environment, we expect to build up additional cushion. Concerning cash flow, we're attentive to the cash outflow from the first quarter. Some of that relates to vehicles with advanced balances, making ABS repayments higher than normal. The EVs we sold had declining residuals, which contributed to higher debt balances, affecting cash flow during the quarter.

Yes, I would add that as Darren describes the fleet rotation concerning ABS and liquidity, deals we're seeing now have a lower capital cost and are related to program vehicles. This will lower our costs going in.

We have sufficient liquidity to refresh our fleet, and we don't anticipate a necessary ABS funding event.

I think you mentioned on revenue per day that the exit rate for March was down 3%. Was that a global or a U.S. number? And what is driving that? It seems like there's no issue with demand; it's held up really nicely. I'm curious about what is driving that improvement?

So Lizzie, that's a global number for exit rates, and the trends we see in April are similar. First and foremost, as we tightened our fleet by the end of March, we noticed a compelling improvement in our revenue per day numbers throughout the month of March. This tightening allows us to choose segments that were unavailable when fleet levels were looser. Furthermore, Q1 was the hardest compare we faced for RPD last year. We're past the most challenging period for revenue per unit, and we expect to yield good opportunities moving forward.

On higher repair and collision costs, could you delve into what you're doing to mitigate those costs? What other items under your leadership are you planning to drive down savings through tech to enhance customer performance and ultimately drive that revenue per unit?

Thanks, Harold. On maintenance costs, we're seeing nearly 250 basis points improvement in and out-of-service vehicles, which from a year-over-year perspective is a positive sign. We've focused on driving down the out-of-service numbers, although we’ve encountered some higher safety recalls. Without recalls, improvement would have been even better. Also, we have a top 10 list for our highest spend categories that includes items like body shops, glass, and tires. We are consolidating our spending and are finalizing those contracts, which we expect will yield benefits. Further, our field operations are assessing body shop rates and repair times, tightening our negotiations, which we expect to finalize in Q2, yielding benefits in the second half. As we rotate the fleet and older vehicles exit the fleet, we anticipate ongoing maintenance will reduce as newer cars come in. Across the board, we’re scrutinizing all costs, including SG&A, to drive substantial cost reductions of over $100 million for 2024.

Gil, I want to revisit your prepared remarks, where you outlined four objectives. I realize it’s still early days here, but could you explore the opportunity to leverage customer brand strength? Is it about enhancing customer engagement or enabling a more frictionless rental process? Given your time in the airline industry, are there any opportunities particularly regarding changes in post-pandemic demand?

Thank you for the question. Regarding customer experience, we see a strong connection between net promoter score and revenue per day, which suggests a direct correlation between better user experiences and pricing elasticity. We have various initiatives underway that focus on our team's efforts in customer service and improving the customer experience. A key takeaway in this area is the value of time; our customers certainly value their time. As we are positioned at the tail-end of the travel journey, we need to minimize wait times and deliver a seamless digital experience. This strategy aims at improving customer interactions and encouraging repeat business. At the same time, we recognize that some customers will require agent support, so we can further equip our personnel with the tools they need to optimize every customer interaction, whether digitally or person-to-person. We’re focusing our efforts here to drive improvements in net promoter scores, while elevating the performance of our Dollar Thrifty brands.

Thank you. This concludes today's Q&A session. This also concludes the Hertz Global Holdings' First Quarter 2024 Earnings Conference Call. Thank you for your participation. You may now disconnect. Everyone, have a great day.