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, we built upon our strong start to 2024 with another solid quarter. We're pleased with the growth, profitability, returns, and free cash flow in the second quarter, As the year continues to unfold in line with our expectations, our reiterated guidance is further proof of this. And of course, the key to these results is our team's diligence in providing our full offering across gen rent and specialty, coupled with a steadfast commitment to safety, operational excellence, and innovation. Without the hard work of our 27,000 plus employees, the results we'll be discussing this morning would not have been possible. On our first quarter call, we discussed that we've doubled down on being the best partner for our customers. This unwavering focus on the customer is critical and drives our strategy every day, whether in our go-to-market approach, our value proposition, or in our investment decisions. We've built a diversified business model that enables us to serve our customers with broadened relationships and generate shareholder value. I'm pleased with how far we've come as a company over the last decade. and for the opportunities ahead. Today, I'll discuss our second quarter results, our expectations for 2024, and what gives me confidence that United Rentals will continue to win in the marketplace. And then Ted will discuss the financials in detail before we open up the call for Q&A. So let's start with the second quarter results. Our total revenue grew by 6% year over year to $3.8 billion. And within this, Rental revenue grew 8% to $3.2 billion, both second quarter records. Fleet productivity increased by 4.6%, supported by continued industry discipline. Adjusted EBITDA increased to a second quarter record of almost $1.8 billion, translating to a margin of nearly 47%. And adjusted EPS grew by 8% to $10.70, another second quarter record. Now let's turn to customer activity. We saw growth in both our GenRent and specialty businesses. And within specialty, we continue to see growth across all product offerings. In fact, even excluding the benefit of YACC, specialty rental grew 18% year over year. Additionally, we opened 27 specialty cold starts, which puts us at 42 year to date, and we remain on track to open at least 50 this year. By vertical, We saw growth across both construction, led by non-res, and our industrial end markets, with particular strength in manufacturing. It'll come as no surprise that we saw multiple new projects in the quarter across data centers, utilities, healthcare, battery manufacturing, and infrastructure. And if you're a soccer fan, you'll be excited to know that Freedom Park in Miami kicked off as well. Additionally, the used market remains healthy. allowing us to sell a second quarter record amount of OEC. We believe the demand for used equipment will remain strong and still expect to generate around $1.5 billion of proceeds this year. Turning to CapEx, we spent $1.4 billion in the second quarter, in line with our expectations, as we added fleet to meet the seasonal uptick in customer activity. For the full year, our CapEx guide remains unchanged. Subsequently, Year-to-date, free cash flow is nearly $1.1 billion. We continue to see our strong cash generation as a key differentiator and remain confident in our ability to produce over $2 billion this year. As you've heard me say before, our flexible business model, coupled with our industry-leading profitability, enables us to drive positive free cash flow throughout a cycle and support long-term value creation for our shareholders. Now, turning to capital allocation, we returned $484 million to shareholders in the quarter via share buybacks and our dividend. Our balance sheet is in excellent shape, and we continue to plan to return nearly $2 billion to shareholders this year. The theme you've heard consistently so far today is that 2024 is playing out as we originally expected. As you saw from our updated guidance, we narrowed the range of expectations for revenue and EBITDA with the midpoint unchanged while keeping CapEx and free cash flow intact. But let's step back from the remainder of this year and look at what gives us conviction in our business even further out. First, we remain diligent in leveraging our unique value proposition as we work through the myriad of tailwinds we've discussed many times. In fact, we've been successful in each area, The outlook for large infrastructure projects, chip manufacturing, autos, and energy and power all remain positive. Data center construction has also been an area of focus, and we continue to win in this vertical as well. All of these type of projects play into our one-stop shop offering and are great examples of United Rentals having all business units accounted for as we help solve more of our customers' problems. As an example, Last month, I visited a large data center project we'd recently won. Beyond providing the core gen, rent, and space specialty products that might immediately jump to your mind, whether that be dirt, aerial, power, or trench, we're also supporting their safety and security requirements. We're providing secured access to the site with our advanced turnstiles and access control systems, in addition to educating workers with our United Academy safety training. Our experience and ability to help them solve their logistics from soup to nuts, differentiate us in the marketplace and allow us to further strengthen our customer relationship. Second, we continue to grow with new products. Our acquisition of Yak, which has now been part of the United Rentals family for over four months, is a perfect example of this. The integration is well underway and progressing on track. And this is a textbook example of how we can leverage our existing customer relationships to accelerate growth with a new product. And finally, we work with our customers to ensure we are their partner of choice. This is enabled by our 1UR culture and is augmented by the investments we continue to make in technology. Our size and scale allow us to invest aggressively in both customer-facing technology, such as telematics and total control, as well as internal technology that drives operating efficiencies across logistics, fleet management, and repair and maintenance. And when put to task and working together, these investments allow us to further entangle ourselves with our customers, thus enabling future growth. So to wrap things up, we're happy with how 2024 is playing out, and we're confident that our extensive competitive advantages combined with our flexible and resilient business model, allow us to drive profitable growth, strong free cash flow, and compelling shareholder value. And with that, I'll hand the call over to Ted before we take your questions. Ted, over to you.