United Rentals, Inc.

Good morning and welcome to the United Rentals Investor Conference call. Please be advised that this call is being recorded. Before we begin, please note that the company's press release, comments made on today's call, and responses to your questions contain forward-looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control and consequently Actual results may differ materially from those projected. A summary of these uncertainties is included in the Safe Harbor Statement contained in the company's press release. For a more complete description of these and other possible risks, please refer to the company's annual report on Form 10-K for the year ended December 31, 2023, as well as to subsequent filings with the SEC. You can access these filings on the company's website at www.unitedrentals.com. Please note that United Rentals has no obligation and makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances, or changes in expectations. You should also note that the company's press release and today's call include references to non-GAAP terms such as free cash flow, adjusted EPS, EBITDA, and adjusted EBITDA. Please refer to the back of the company's recent investor presentations to see the reconciliation from each non-GAAP financial measure to the most comparable GAAP financial measure. Speaking today for United Rentals is Matt Flannery, President and Chief Executive Officer and Ted Grace, Chief Financial Officer. I will now turn the call over to Mr. Flannery.

Mr. Flannery, you may begin. Thank you, operator, and good morning, everyone. Thanks for joining our call.

As you saw yesterday afternoon, 2024 is off to a strong start and playing out as expected. And I'm pleased with our results across growth, margins, and fleet productivity. all executed through the lens of putting the customer first and with an unwavering focus on safety. Coming into the year, we knew the key to success would be doubling down on being the best partner for our customers, and that's just what we're doing. And we're meeting their needs and finding opportunities to deepen our relationships with them. For example, we broadened our product offering to include matting solutions, and we continue to invest in technology to improve the customer experience. Additionally, we're executing on our plan to open more cold starts. And just as critically, we're doing all of this while maintaining our focus on operational efficiency. The team continues to demonstrate its commitment to our strategy, and we remain confident this will be another year of profitable growth. Today, I'll start with a recap of our first quarter results, and then discuss our recent acquisition of YAC, followed by what's driving our optimism for the year. And finally, I'll give a very recent example of our 1UR culture at work, which in my mind is a true differentiator. So let's start with some of the highlights from the first quarter. Our total revenue grew by 6% year over year to $3.5 billion, a first quarter record. And within this, rental revenue grew by 7%. Relief productivity increased by a healthy 4%. And adjusted EBITDA increased to a first quarter record of $1.6 billion, translating to a margin of 45.5%. And finally, adjusted EPS grew by 15% to $9.15, another first quarter record. Now, let's turn to customer activity. We continue to see growth across both our GenRent and specialty businesses. And within specialty, we delivered double-digit growth across all lines of business, by vertical, we saw growth across both construction led by non-res and our industrial end markets with particular strength in manufacturing, utilities, and downstream. And we continue to see numerous new projects across many of the same areas we've discussed the last several quarters, including power generation, data centers, automotive, and infrastructure. Additionally, the used market remains strong allowing us to sell a first quarter record amount of OEC. In turn, we spent $595 million in the quarter on rental CapEx, and this is consistent with our expectations. As a result, free cash flow was $860 million in the quarter. Our ability to generate strong free cash flow throughout a cycle while simultaneously funding growth is a critical differentiator. The combination of our profitability and capital efficiency, coupled with the flexibility we've engineered into our operations, enables us to consistently generate strong free cash flow and create long-term value. Now, turning to capital allocation, our number one goal is supporting growth while also maintaining a strong balance sheet. And after funding organic growth, including 15 cold starts and completing the ACT acquisitions, We also returned $485 million to shareholders in the quarter via share buybacks and our dividend, all while remaining comfortably within our targeted leverage range. Speaking of YAC, I want to share some initial thoughts now that we've started the integration process. This acquisition is a textbook example of our M&A strategy at work. Through YAC, we've added more capabilities for our one-stop shop platform, enabling us to be even more responsive to our customers while also generating attractive returns for our shareholders. And for those of you not familiar, YACC provides temporary access roadways and surface protection to any site with uneven or soft surfaces where you need to safely move and operate heavy equipment. And similar to our purchase of General Finance in 2021, YACC is a leader in its market yet still has plenty of room for growth as we bring this capability into our network. Since we've closed the deal, we've spent a lot of time with their team, and we're even more excited with the potential here. Turning to our updated outlook, as we look to the rest of 2024, we remain optimistic about the opportunities for growth. Thus far, the year is playing out as expected. Our updated guidance reflects the addition of YACC, with our underlying expectations unchanged. Customer confidence remains strong while our team in the field is focused on the opportunities ahead. And while these indicators are tangible examples of what gives us confidence in our ability to deliver on our guidance, it's the team's daily actions which further bolster our belief that we will continue to deliver strong shareholder value while supporting our customers in their normal operations and times of emergency. A good example of this was our response to the devastating news of the Key Bridge collapse in Baltimore back on March 26. In true United Rentals fashion, we were all hands on deck, helping with the immediate emergency response and ongoing work. This support included a broad range of assets, including mobile storage, power, light towers, portable sanitation and fencing, as well as both our aerial and dirt equipment. And what's more, through the acquisition of YAC, which had just been completed, we were also able to provide the mats needed at the site for the operations. This is a perfect example of our differentiated business model, where we provide unmatched support through our one-stop shop offering to our customers and ensure they can safely and efficiently focus on their own operations. It's also a true testament to our culture and the people that work for United Rentals. So, in summary, We're excited by both the immediate opportunities, particularly on large projects, and the longer-term outlook we see. We've built a resilient company with a well-proven strategy that positions us to continue to drive profitable growth, strong free cash flow, and compelling shareholder value. And with that, I'll hand the call over to Ted, and then we'll take your questions. Ted, over to you.