URI - Earnings call 3 2023 | United Rentals, Inc.

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Operator

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.

XX, description the and Form the company's the ended complete please possible XX-K SEC. more as year to well refer annual December a of filings other these risks, for to For subsequent as with XXXX, report on

You filings www.unitedrentals.com. these access the company's can at website on

subsequent publicly changes has to to revisions forward-looking expectations. in order Please Rentals and no any no note that or commitment release makes new events, information or reflect obligation in United to circumstances update or statements

You such company's call should EBITDA press release include references note that also the cash EPS, and to as adjusted EBITDA. today's non-GAAP flow, adjusted terms, and free

most the to of from financial reconciliation comparable refer company's recent measure. the non-GAAP back GAAP see to financial the investor presentations each Please to the measure

Flannery, Mr. Rentals now you for Mr. Chief Financial President Speaking Grace, Officer; to and will may Officer. I Matt over today Flannery. and call United is Chief Ted begin. Flannery, turn the Executive

Matthew Flannery

and and morning, operator, Thank everyone, joining thanks our this you, good call morning. for

results, the revenue, in raise evidenced as As you we bar the returns. third by to continues the high and EBITDA across our this team adjusted set watermarks quarter's new saw quarter

team. say team our again not As safety to take customer, valuable recordable delivered safely this a our rate but but we our critical many employees without heard key for is our our to in value only also our care that company-wide generating me the you've our a customers the most below most And of it's X. I'm results. differentiator that assets, saying of eyes thankful the are goes on focus paramount Their times, supporting is shareholders. And

later, field reflects in we've competitive is drive as we've the year, driven rest last both on for created guidance we outlook to strategy to our as goals. what and tailwinds industry by more I'll we're long-term generally, confident our the us the our the of of in well our from reaffirmed The we towards see developed. And we decade business. hear on Looking this confidence touch position the towards the the advantages that continue over the horizon. More outpace XXXX the

Adjusted dig let's productivity this, by year-over-year revenue XX% a record. to revenue EBITDA increased billion, invested EPS XX%, with $X.XX increased of record was And to on to a XX.X%. XX% record. $X.X to quarter results. basis. quarter quarter to over billion adjusted XX% rose a a third a Total our of third while X.X% third into customer rental finally, return record verticals, of XX% new over and across by broad-based Now Fleet third margin segments. the Within pro a expanded forma on quarter up regions, translating grew growth capital

Used doubled these of out fleet into So results. let's more behind year-over-year details normalized a after dive million sales in $XXX forward the should back XXXX. cadence. spend us. more than and was as Rental a chain our just rotated be older holding we to bit equipment $X in quarterly reflecting line behind the more normal is over need to recovered, supply expectations at And with billion, as CapEx volumes pull

Ahern. to now And

bring way as components sheet As both serve position we leveraging enter to shareholders. our one Ahern with Rentals. them capacity, and we to CapEx continues as our forward, we my is well our another of when integrate be highlight chains, companies And the into the supply anniversary benefit XXXX. track on we are in the and to customers this a as our strength great board example us deal, team. added and the and comments balance the on key combined approach of the United of customers on integration should have the remains first And quality know, looking of add you we People

Now Non-res across by power. new year-over-year. led solar infrastructure mining, centers, grew industrial let's activity including semiconductor-related numerous metal And and X% manufacturing, turn the Key customer facilities, board, and and growth off customers demand. care. construction projects kicked broad-based jobs, EV and and saw projects, within power verticals to data this, our health

XX Geographically, we regions. double-digit regions. year-on-year growth gen this revenue see continue location business year. starts the specialty XX across And Within new rent during in delivered cold rental up opened quarter with openings XX% resulting most we all another excellent quarter, Specialty, to and our organic in specialty gains

Turning to capital allocation.

In to and growth, buybacks quarter and investments addition over returned share this on to through billion we've cash made to in the $X.X year. to shareholders track return remain shareholders this dividends we $XXX of million

solid. As in in customer September. confidence by our Furthermore, And ABC's nonres outlook. our remains Contractor as advanced across is And optimism. did reflect we backlog supported Dodge which ahead, indicator. the which own look Index, The importantly, index both continues spending Momentum third employment sequentially remain this we its nonres to Confidence most quarter Index, construction feel and strong confident construction

While early on field expectations also 'XX are our encouraging. their indications from team for

for XXXX Best acknowledge Companies, the U.S. and their company's Magazine's earning recent TIME like our efforts selection World our team in I'd Finally, to to the

see and employees' like hard work out. day field News the Work day Report's World Recognition For when and Best to this dedication comes no Companies you in as our surprise list. in and

a today, So the to how very strong my QX was with wrap remain We pleased playing quarter. comments is year up out.

on ahead in positioned than we opportunity our and us trillion horizon. in large anything industry is the share win more my fair to of we're of of $X unlike forward, Looking investment uniquely career, see around the rental the the plus projects

partner, open and we only proud We the feel before I'll the Q&A. investors. have and shop We execution line Rentals hand can for over about customers to to with over make ahead we're And to of technology we you. our rest preferred our year solutions good United one-stop but call and Ted, set the rely delivering. a a the us what's we Not Ted for expectations results that, the on. of of to and XXXX, history the do high scale, have I'm

William Grace

good Matt, and morning, Thanks, everyone.

were results on year. that to with continue again we add As quarter you track based very on the and and beyond third extensively. I'll strategy our that record our us expectations strong consistent saw good we've our another release, for feel about prospects XXXX keep in our delivered importantly, our team tailwinds discussed

be say we a say While up year, much year where too premature it remains XXXX shaping little planning given growth. cycle, in to is I that about to our of next another sit will

balance in Certainly, with on today year. the come our and more to our there performance quarter focus the of January third

into before Now one jump I quick reminder the numbers.

of them reported, year. is which I prior the Ahern's be pro call adjusted I'll say forma, usual, last include as stand-alone out As as except the where third figures are to the from is discussing results quarter period

with that into get numbers. let's So all the said,

our revenue by Third or a across diverse million strength at you XX%, say. $XXX markets, rental quarter heard over record $X.X was of Matt supported That's as increase billion. year-over-year end a

pro Within $XX average and X.X%. XX.X% rental that million increase were of a size in up that or look offset continues to growth, good X.X%, our million XX.X%, assumed rate by revenues forma contributed while robust re-rent we which rental An our Also rental, a as-reported be by environment at basis, results, revenue, OER increased industry increased know or by is fleet X.X% fleet reflecting healthy million. by partially revenue a a fleet $XXX to productivity XX.X% fleet how $X higher On ancillary inflation within productivity as supported you discipline. by in XX.X%. declined with decline

Turning to used results.

XX.X% refresh Ahern took continue to margin to of Third the dynamics. normalized to reflecting and to we we fleet volumes required drive third on more channel in our higher used as volumes, cleanup doubled the quarter supply-demand impact some due million, our quarter largely proceeds was $XXX The expanded decline of mix roughly fleet. actions to adjusted normalization

sales volume we robust Importantly, our advantage to at by in strong driving take of attractive market pricing. continue growth used retail a

our also was to XX.X months age the quarter, average note at that end of essentially back which the levels. I'll is pre-pandemic fleet

in dollar $XXX non-rental increase businesses EBITDA, which while to reflecting added used million $X million of Moving rental, within $XX $XXX of from a added billion, million contributed million. sales contributed and an $X.XX million, another includes $XX XX%. other a adjusted $XX million declined was the record Adjusted Outside EBITDA OER to change rental The increase quarter $XXX or re-rent of million while lines year-on-year. EBITDA. ancillary about

year-on-year, cost While million SG&A $XX it quarter of basis points as did percentage of revenue, a XXX very in of X.X% reflecting another total increase efficiency. declined sales, the to quarter good

Looking quarter profitability. at third

XX line on as-reported translates an the adjusted impact with quarter, decreased better increased pro forma XX%. than but pro points and excluded used and was reported basis XX.X%. XX This quarter XX% basis flow-through in flow-through Notably, of of Our results. on core XX% exceeded basis our flow-through of to in to the if a second basis as margin forma we points EBITDA

finally, quarterly year our $X.X quarter almost cadences million. to $XXX has our normalized, supply forward adjusted going levels. of to the largely billion return have expectations At the of used should reflects us rental XX% largely $XX.XX. CapEx our and million of sense demand. levels CapEx. match gross Gross $XXX And XX% more both point, the rental CapEx enable is net a it seasonal plan, historical full to $X.XX Year-to-date, this to that EPS quarter rental about in CapEx deliveries normalized line record decline versus and sales more timing was is CapEx with billion this rental with The CapEx third which year-to-date third typical return representing better a chains in of totaled increased net through to Shifting year. which

free to XX-month of Turning XX-month our remains cash new good while The flow. set to story. flow growth. XX.X% record trailing basis came return at free while XX.X%, cash margin cost in $XXX free of also on ROIC capital fund all quarter above at robust capital, well and million, to and trailing a a continuing on invested translating a remains cash a

Moving the sheet. to balance

the returning shareholders maturities billion via was of long-term including $XXX share totaled until XXXX. at Notably, dividends. to Our million ratio $XXX net leverage repurchases, with and the after of at note flat through billion X.Xx, quarter sequentially year-to-date, this million our no liquidity end $X.X all while $X.XX was

of raised let's for continued we and free shift So cash EBITDA, Within shared ranges older total within by this, to reflecting with record We of total comes a range benefit. we fleet reflecting to last taken to revenue, guidance year. billion, to dispose midpoint of revenue acquired delivering our reaffirmed cleanup night. confidence actions $XX in flow, $XX.X being billion the no our million margin a the $XX.X that some

any at being to sold is balance say at avoid recorded Just values our the confusion, that fleet on they sheet. to the are is

to a billion cash You see than prior a of free maintains to on of $X.X flow $X.XXX which guidance. versus is which an or at finally, $X.XXX equates of expect return price $X.X billion billion. EBITDA through of investors the generate which to of our midpoint, this at share And in at to point $X.X billion, our billion guidance $X.XXX midpoint we million return out our little to $X.X over implied repurchases X% billion, guidance levels. more and billion Adjusted increase sales share current I'll $XX is dividends. This yield capital per $XX around will that

let with turn me please operator. you to that, the the open call line? Operator, over So the could

Operator

first Evercore question Raso David Our Instructions] will from ISI. [Operator come with

David Raso

of start as-reported don't us thinking the should about think you anniversary at we measure, productivity of think to given how about it. can The and sort part mid-December help just you you're guidance, let's constraints peak an items X quarters anniversary give or least it chain comps, about anniversarying. is X and want Ahern know we X the but just basis. to of 'XX elements productivity in time as I ago. you supply soon toughest those How with X with

maybe as productivity's to help be you in -- to you and any also now reported at is to you are loosen back How then thinking go up. noticed chain with all ability you mentioned flat the can about all up supply

or curious growth carryover CapEx year? get some of down X cadence on big into some just replacement pieces. just Or frame for CapEx. are saying next I about can want But going there normal building thinking up. the to about know you're just thinking go fleet I about thinking how blocks next to to year. CapEx you're back 'XX is the an up you some growth. help year. it your those There's How You as

Matthew Flannery

feel forma even and to on anniversaries well. And productivity. healthy try over time of Well, positive comps Sure, talked first basis, about And tough too David. On tough. unusual we didn't Without year, and productivity, first. when the giving just to I'll you think that your at fleet we guidance, a we've still I relationships very are help perspective. We expect you think fleet next just captured out about pro way customer absolutely that year time part a that had much have orders this utilization put from hand-to-mouth risk. was it

really run strong we've time So year. this

As back were 'XX, is I July, over in told in appropriate we and this level. a more what you guys we think

expect being still with needs year. that wouldn't we So the And time headwind be industry rate. next a to said, get to

but normal, positive, certainly, close, year. think And positive XXX% So the if X productivity fleet certainly I about far will be call to then flat next and mix cadence, probably have We expect chain CapEx is XX%. not we to to other as we productivity. back about supply probably will and fleet as think what contributors one largest the fleet be. one mix the We

of we frankly, supply. going can't There's as as assets still load But used I we're front just a time quickly that to able high they're want. don't them to couple think be categories in tough either get because we of

rolling. So give off CapEx fleet. $XX or age, to Ted I we'll keep we pre-pandemic the do fleet what mentioned And And year, the cadence of perspective. right really now, base that about that want to We normalized XX% keep back right, to we're from we're pleased think his about as usually going of comments, to a to got guidance of we XX% more it not in but a fleet want right billion to think capital way and think of our sell a is fresh.

to XX% replacement that XX% those certainly point, to to [ this billion, you we the somewhere think numbers, on And sold ]. about get think between $X.X CapEx about XX%. if roughly, So than talking you're about of higher that if $X.X billion at fleet

on somewhere above ]. that, sell. [ talking use we year to that And CapEx I baseline. And Let's up anything just how you're of and $X.X next And round -- depending obviously XX% billion billion about over between we'll $X communicate a year. a as growth the we to be some but through growth do haven't in will give you And we We'll our expect expect in be January, process that be planning growth We there better CapEx. guidance January. CapEx, 'XX will just yet. worked much

David Raso

M&A call perceiving Can X.Xx the asked I with just lastly, into the said to you're give flow us about sheet the net going that to down I thinking some versus framework too, how Just how leverage you're continue cash of 'XX, trying all the that it. a other uses but of stay expected All at EBITDA leverage debt to you get and right. in to how world sense next of you're know And this end down is last go the balance at year? about thinking year. the or

Matthew Flannery

going our let a Ted Certainly, and capital the answer I'll of it, about is business. use of bit jump talk be always to we here. I'll little in growth

that then we of find and be customers to the to meet. we If And we where frankly, pretty organic certainly a secondly, us business, that. M&A. feed history demand expect So a we're meet of can growth the And good our have it. better at a first owner foremost, shown opportunities

for a So why balance robust, but sheet that. threshold. not the have remains high That we utilize pipeline

couple we're that we'll products always but new a a including specialty, in to add past add not did like the lean can Ahern's to have deals, to specific any then we I'm this looking. pointing imminent than of also capacity fact anything or other So And year. with we

I'll take after that. as capital for used Ted As growth, let far we've

William Grace

question, for Thanks the David. Yes.

of at at have the implied end would are So as the us X.Xx we leverage quarter and guidance of about saw, year-end. around X.Xx at this everybody

has allocate we that So the we absolute we which so a was absolute has well little and our that a We below been of what and free relative was think we us bit XXXX to accomplished in in intended when to look when primarily relative cash of measure do bottom reduce kind too. delivering our multiples, we overall lot quite equity accomplish, think threshold flow wanted. have introduced very at what and strategy to the and it's valuation excess it improve beta, successful served volatility

what's certainly, about working of talked terms we've we're on. something that's next, still In that

update as We would programs Street expect that we guidance be to the have the introduce all and allocation capital for plan. an our 'XX by that will related underpinned

So come in more there January. to

Operator

Research. from next Melius our with question We'll take Rob Wertheimer

Robert Wertheimer

gross seemed a didn't activity just margin. any think you Ahern I'm margin, related is And wondering or fleet, So think gross depressing have on driver rental probably if it but you guess, guess, which have I I Ted my the And that I weaker Ahern still I to drove cleanup, Ahern depreciation, incremental may mentioned some XQ. And on question extra specialty. be than other have this sequentially that? little there's to that

could the well. wonder I So as you gross if margin address

William Grace

Yes.

So while if that with quarter. as versus I'd margin minor last when say, points see you convert gen into rental basis look reported our dollars. margin, expectations, did line Pretty XXX in you gross we at the XXX that down

You'd basis of on $XX million to about revenue points the being of be about cost $X.X just talking base equivalent billion. a XX about

puts was Depreciation as part that. everybody cost always knows. and takes of There's structures, within

in scheme costs pretty captured XX more the -- I the about of really I hitting think to quarter-on-quarter through, noise. on think walked think made in points, question been ask characterize you quarter would cost go otherwise, always one just it's would have onetime that as Ahern, the through it. very was or numbers a points And we The you incremental don't purchase we that. there's basis those the things, that if So basis as We XX you. depreciation, is of may be probably recognized dynamics in that of be accounting other to final much we fair given have

guess, a XX.X%. specialty, year-on-year Within you at record I flat saw margins, off

There again, strong pieces much good if about we did really have some specialty feel have performance wasn't But shifts within and can mix headwinds. been out. generate would margins, business that there. very that. really different we of We XX% grow XX% the So to call a at relative

Robert Wertheimer

construction you of have a to allowed, there's there. rise. I kinds if basis, whatever to different declines mix? there's sense LNG mega a If I'm running experience questions a in But with Do some or on a now. semiconductors projects know mega one, And And stop guys a if dollar I'll of to in lot commercial of lose of lot a and other, you projects you office just by whatever. mega airport from different dollar the dollar-for-dollar on that's materially you or gain and have

William Grace

on what? different Materially

Robert Wertheimer

mix. On

you So if gain a a a mix, out for shift that dollar you construction, you? a certain lose you does amount revenue. How gain dollar of a so mega you revenue, certain lose construction of of of you lose amount

Matthew Flannery

I'll Rob Thanks, take that.

thinking So if perspective, rental bigger a duration customer, more if project, transactional longer a larger there's about variance mix you're that you're just we're does about thinking larger thinking what probably about from business.

So spend certainly, leverage walking Joe customers us, in store. bit little Plumber their of then our with largest the a of get the out

because serve built you put them of make could and we one the revenues specifically gap those projects big more of one we much customers, could So cater sure work that's to to large at when why large is. where efficiently. biggest plants site, reasons is to you block these But a go-to-market the large

So lower there some of because to to we margin-wise, cater why don't variance, on that's that to that you projects. much between may Thanks. certainly charge. and a this historically transactional serve, see those cost But we've rate built go-to-market the line line, top in business your of the difference be top

Operator

question UBS. Fisher next comes with Our from Steven

Steven Fisher

flow about up Just there's bit curious delays. at within to I little some a mega guess, Obviously, coming I'm on Or could the happening experiencing project about the a market pipeline. are on about in the the of But what's well? if radar Curious discussion. some this population just the point. new your more the to what screen beneath projects you're there follow some it you there. what known on any opportunities like is mega a talk ones seeing extent just headlines surface projects as

Matthew Flannery

to all at none pretty would than headlines X on. Sure, the are on we not strong that coming call the say we're could a the somewhere we've things the think new I pipeline Steve. pretty handful or same it's And projects steady right? related, number new think be And whole of number, been and the a handful, that When fair, robust I that the about ones coming X tracking. are quantity. tracking net basis less hit level. have out I do handful macroeconomic I'd well-known really net projects, remains them relevant about But time. find about these of is We

one There some are delays got Maybe have got there Carolina call that in Chinese work a was are they political, that issues right? a potential that was plants permitting. delayed about. that you'd South because There some the of that was some that through. noise environmental partner dealing to Others with job

So not that things are are up there's for more economic of coming down that slowed It's issues just each issues. these individual projects. because we're seeing really

we and still ground many coming jobs, we're XXXX. of many have which of of There's today of So that out robust pipeline which not on anything know in concerned are fleet a about. the we

Steven Fisher

a the utilization? curious neutral. synergies? have I synergies. it's there if of adding more then going year year, like been next just kind a be it next just to question think about plans actually we you Or sort When bigger from of are lapping from Great. just just Ahern. about the in a kind Ahern actual there some is about And I'm of neutral, Ahern? like And know picture what said about 'XX tailwinds

Matthew Flannery

anniversary. at it some be point well and pretty will cleanup certainly I of more we're is would lap egg doing this the the we year-end than call scrambled by neutral. other The when

synergies and As good that we guided We'll towards to we now. the job. targeted far them We're close the done had had with synergies, year-end. meet by we pretty a as that did

And little more view you will with there. we're in shape reported. cleaner good So as share be nice to have forma bit to pro it a all, no

it's been know cleaned on I will that by all specifically some up the and of metrics confusing be year-end.

Operator

with Jerry comes question from next Sachs. Our Goldman Revich

Clay Williams

of in for Clay -- and the When acquisition with Jerry Revich. line with or A is ability quick we to on the This does to that base X-year you to get strategy one and the your as to business are as hallmarks acquired been Williams there? business -- has the question. on the the post do approach of asset margins typically utilization still base going this anniversary Ahern. work productivity have do comparable margins fleet base businesses

Matthew Flannery

the which say bought be But somewhere some by So to have the when differentiation, we we a asset we around. from year, we have the they you look next remember, right? them, fleet performance get assets about didn't there would productivity, have think look items. expect would like that of assets year, So you be in far But them attributes, ute didn't right, -- the as that own like-for-like we'll usually, that They category. to asset next the more the dollar it as higher to specialty. the

all think it you margin, in to processes of a usually when our takes implemented about longer. little their get Now stores,

fast years XX we on Now you're somewhere how X move. between months, depending talking

the should year. activity, realized next So mostly but from drag operations the implement by productivity, of the there'll little it new fleet new be the of they those bit tools still stores be on all as a

William Grace

its and add, for certainly margin everybody's just might I a each standpoint. thing profile one from unique The has benefit, deal

think have sake, deals structurally. they were clarity's was were to the the do Ahern, say talked clearly this XX% extensively. to we deals returns BlueLine. thing pretty very That's synergized, you same LTM, for But economically. EBITDA doing not they're sub been for they very Just fully be margin margins not tend attractive. we've dilutive That XX. But good about The to about be if going

GFN, doing synergized, certainly, at I synergies, margins EBITDA think LTM true NES with closer. XX%, XX%. they're low XX were look thing they the And was the if have and of fully been Net in you would same they Baker. But is

that do a take that in dynamic. integrate lot we of pride companies great including extract So to job. value, but able been there and we're a the synergies, through We cost has fact these

but Craig, So to appreciate I'm sure want people's I I added just for make sure that, you just other -- that. we benefit,

Clay Williams

And sequentially in slightly a improving on versus looking guidance, guidance Or margins Appreciate midpoint normal up QX better a to XQ is implies normal this be at than seasonality, from we midpoint of versus it. it midpoint? are what's should not seasonality?

William Grace

Yes.

we have in not, you or midpoint, of the range given But we where always but feel kind indicating not consistent which fourth be Just guidance, telling quarter, people that, you we of linker it's that's and should kind a don't direction been give thinking. anchor don't we've beyond quarterly that comfortable as know.

Operator

Citigroup. We'll take Thein our next question with Tim from

Timothy Thein

in XX%. know you replacing you'll positive you're your point, you excess expect mentioned productivity inflation. of positive, of that positive in 'XX. still can you your be is but inflation? believe be expectation confident Do in of replacement, fleet that dollars upward you mentioned the you to that the think to I be that the ability to earlier terms back to that And Matt, comments exceed

bringing as about number to you in more X.X% actual this fleet that from inflation ago, environment. X, close that in out Is today think X just be you're rate should what you is dropping think years that

Matthew Flannery

Tim. Sure,

of outpace So inflation, goal the higher have we will some revenue to productivity always it's We The and outpace feel think productivity. growth. we than we to was And frankly, need whole growth, inflation, fleet that confident And to we'll positive first point generate right? fleet fleet growth that off, fleet make be inflation. we that of will. our sure that

to exceed So it. you got

that As it's bit far out put years a ago, couple higher we points today. as a in the bogey of little X.X reality, there

gets in mix, report. productivity that gets which the Where extra in captured captured inflation fleet

for to bogey still inflation it then X.X We're we sake, simplicity's that right comes mix. in really hire, that it negative left fleet looks we X.X% just better. extra that the and for if change It's we make pocket, a X%, whether that as absorb at just So But add now we consistent. it and productivity pocket. in keeping keeping and back

So we'll the And easier a that the expect you continue think to guys whole exceed we mix headwind. to forward, metric that even inflation going about and extra consistent, talked to still and the do see do it's keep with probably picture. internally, bit and we we little

Timothy Thein

guys that, And including loosening but you number industry good from you data. sources, of kind Okay. up. are Matt, the anyway it lens the supply-demand into balance Understood. the And earlier, seems Rouse supply mentioned a chains in then have a us the to of

And dealers rental data be getting active informing if if that supply-demand to terms some that for just up that's of and all, coming you product curious about or also OEM be 'XX. in plans guys of influencing more at it's availability. you your see in to the seem catching I'm how, seem terms of CapEx through in

Matthew Flannery

Tim. utilization. think certainly run I gotten see normalized of I We you're supply more seeing industry think right? the time better, and Sure, certainly most better, chain gotten So -- you'll

But reliable of OEM the next a Because still that run And year. this be that's to good it I efficiently replaced. can going frankly, was thing, more to your be big leg business the partner growth right? the from customers. seen you is think more You've -- and

in OEMs served CapEx of as to the dragging. system. think been volume, be is of needs replacement especially still don't be a in some and this that all I this that's to that fleet the grow extra areas There's lot their going

of think in next be the We're two. the more characteristic or the curve. year will that So getting ahead I

fleet You trying age much see used on the sales how to get focus to that we're right.

CapEx where about just are So a but industry. of of next good to year, going the replacement the we lot like we're still rest have feel we

Operator

Redburn from Our Instructions] next [Operator Tyler Neil with question Atlantic. comes

Neil Tyler

please. couple there, A questions small of

first going crystallize Matt, back just more Firstly, comments, about Ahern couple a expected probably you've at to thought the the synergies. revenue in come time your synergies and thought I comments quarters through be to to that months. previous wouldn't take the XX the of might bit made

has the at fairly the is if thoughts. So I the understand to us check going But how you the stand can scrambled that help And egg moment. I just where just understand cross-selling and use your just that of wanted to been words, there? sort you and on well

the then proceeds into one, you as on specific the And a just year. more bit move second next used

exited it the if all, up terms First assets. in fleet of older or you've the of of as sort caught broadly sounds shedding of

expecting So will to slightly but presumably, fleet all downwards we're used be guess normalize I younger, the a bit. used prices

the So of if proceeds about so? through OEC months XX will the of next or us those sort think percentage track you of can help perhaps

Matthew Flannery

giving for clarify. Sure, chance Neil. Thanks a to me

will Our cost be realized. synergies

absolutely You right. are

revenue take Our synergies will longer.

even that if knowledgeable way. so I'm heard wasn't asked cost, it it as that So I

schedule, So thanks that. cross-selling usually going bake and for But that fully we're on we're clarity. and is And that for a of well. on track the to couple years takes

portfolio that and sales that full base have to to customer sell. a very teams the pleased the think I come with are

And that's then the as proceeds.... used So working well. far as

William Grace

was and supply. used, who And much a buy couldn't that fades. on Yes. the normalizes, I talked a buy chain certainly, see you now. we've that, buyer mean, these versus relative while demand expectation about new to incremental be dynamics basis, supply not left as for as the It's only would

we've 'XX something expected for. should [ looking a to Now that of and ] and likely people going about be that talked is be that's dynamic

still have the cumulative going to other inflation alluded to hand, kind and Matt you're the of XX%. fleet On

good And for us would for is an in ultimately, That's inflation I that umbrella provides broadly, fleet higher. used a very say pricing. position. more

set are next well those 'XX bar. expect balancing of these have So levels. cross-car an would that above we'll kind year. recovery We be rates to unsustainable certainly historical

understood $X. everybody that not equipment. on to sustained. normal expected think selling that be there mistaken, I getting X-year-old benefit to not led ever I'm that's and some That's something $X.XX anybody there temporary us not was

with normalization that year channel mix. seeing this You're

see year, of us I think normalize again. kind Next you'll

sell. to they more ultimately, but either. -- to mean we So to We've won't back it at recovery back fleet fleet about normalized levels be pre-'XX plenty And I they got rates, those part those of equipment won't we've age. be kind of ages, tremendously Neil, the 'XX levels, other old had then X-year be just won't got different. always still

the we you I know that average we've don't I Neil, you X-year thought think have said X- to if changing don't had will old X that that So X. be been you third that, much. question? or.... range hitting

Neil Tyler

No.

Just the at X the moment.

Operator

with Research Ramsey next will question Thompson Group. from come Our Steven

Steven Ramsey

there projects rates rental the I you're and know it's and on seeing broadly secondary curious I'm in helping that besides early effects tighter is more days mega the itself? getting on if up. utilization those market ramped geographies project the just

Matthew Flannery

take generally, mobilize get tighten but lot be to customers. is of there be larger up yes, supplying part have to that then areas. to retail it. with that care built it go the companies then Yes, are about the especially markets that of the around the But the these schools And that jobs, built rural I fleet the all plants, these residential whether plants, the surrounding feeder more going think will are we'll and that of generally, ones you're the in talking and and in other be whether mostly infrastructure and a you'll

the that are the -- that these booms share whole plus we get from. whole but big area So expect our these overall to for think certainly markets will fair we benefit

Operator

will Weber next Wells from with question come Fargo. Our Jeff

Seth Weber

where help just I equipment Can think to should what you back channel sell the rid sounds whether mix mix discussion we been going less forward couple Just some more the again to talk for have Seth. to channel to your here clarify. what think how to of it's acquired used quarters? wholesale, to will you? used forward your you of mix going auction, be to the it's fleet, about you a tweaked channel relative last like of the It get It's go equipment second, of fleet. just just wanted the older kind for

Matthew Flannery

Sure, Seth.

of our pre-COVID were So trades vendors, just less whatever on little the X/X between replace on. back bit middle about we're and than years if auction. the retail volume fell assets of go X% needed what we based so and on kind you varied a there we to to And what with did negotiations in levels, usually brokers on and

will I it and the get certainly us, from through the of was atmosphere. we older fleet highest past this But That that out expect large we've XX% billion think right? auction had of assets just blowing be of Obviously, that's more saw M&A, acquired normalized $X.X number for quarter. the a to ever some you type that we might done. that

had in X% back their either lot to or that of. XX% get the of to rid you had decide Everybody a to work through

just up. mix you we'll to decided So normalized pre-pandemic. more back to get we saw than what that clean But channel

Operator

with comes Feniger of Michael Bank question next Our from America.

Michael Feniger

for of longer and rental really kind environment. does longer rate a versus to of but how in rent differ own equipment environment impact seen does for from higher rate up that activity kind space? of interest also other periods holds that rental haven't we we trade-off, on the How the higher think weigh Matt, typically project impact this how

Matthew Flannery

XX-plus more So for spend doing it's becomes any of logical capital pay more expensive, my on. people years this, to think capital time what to their attention they that

try when you that think it own, owning or to them to rental. opportunity So another about we're to think then about barrier to customers thought wanted adds the

think better. industry has get the in such flexibility when they to math soft about just don't that reliability, of they a assets the can over you after come They don't turn you works, when -- do, want the when right? when get the other maintaining, of about -- way the fact They deal because I customers. storage, that what rental experience don't don't I our even And the need the those think have I to interest they have once once and we that costs lose environment, them. way go it, long transportation, with need a They flat is much lack all in

who's in our moon. equipment working better of job blue once to a lot mechanics So a heck going on a are usually do than somebody

greater environment just penetration, a those penetration. think another that higher adds So variables and of mean interest all layer I rental higher

would So that's be what expectation. history our us. tell That's what

Michael Feniger

And the moving infrastructure, year, my energy construction cycle versus clearly, follow-up there's next just, offices, downstream. some versus upstream is industrial pieces for commercial

context with years this We saw help in of Just the in downturn. of oil intensity. few us XXXX, fleet 'XX

Just the seeing compared tailwinds. some these service some would these necessary fleet other come weaker pockets are to how markets that out much of of of to

of of help kind could pieces. just us conceptualize those some you If moving

Matthew Flannery

And were seen verticals oil we've areas? QX. Michael, what we and all opening have ironically comments, come in you're the broad-based you think All rig that I than count demand. positive my Because are other pockets to serve, gas, the talking seeing I you -- pretty about, referring we we're heard in -- down, the been think

you're a what a seeing more not little pockets, tell the we're thinking of about. So lot soft

Michael Feniger

and should is Well, market about the next business those the these maybe really worried reacting how to basis. office about guess relative we I pockets that's pockets multiyear services, these do other required markets commercial of private are the year, if some the Matt, that strength verticals model fleet that think of fleet real estate, for soften some or seeing on strong that end a

Matthew Flannery

Okay. Great.

is to a very right? booms. stadiums in you're the of model $X.X to that's vary of $X things need fleet what these construction fungible is bit necessary. great the what our maybe of billion of profile, assets, on, we always one right, little have on we at disposal we somewhere going depending may use reposition fleet The and But type between if going billion, So some bigger have

the there's work on place. margin, because the these other. you of of our opportunity don't our great get certainly for full of some of propensity overly it's mega -- you're going on which model types a breadth it And as fleet of to But some changes, to don't that from different the send can don't that maybe the the fungibility bigger you have And for move higher from replacement to to have fleet allows account one breadth footprints. fleet we really And more they're moving long parts re-profile something that. within as right if to rental that's specialized, projects, we just and -- CapEx, is a you that the dirt

William Grace

add, vertical, Mike, very and will. difficult demand transportation, good, intensity we you et publicly, of this think from get feel if a perspective. by and about sub to the we've things you internally more infrastructure, is verticals might what health about it's manufacturing, we kind look I it like But into And talked certainly, the power, care, way at where if top-down cetera. really just

to, the aspects maybe at which projects look versus markets of it's of the alluding in you're commercial. it's you value office, areas dollar those of If those aspects

be Just seem the to that in areas absolute the greater opportunistic. dollars are much

basis, weighted our see a from year. so where that's next growing And opportunity we

Operator

time, have the Thank will we questions this to for Matt I remarks. you. At queue. back Flannery turn call in closing no further

Matthew Flannery

remind any us And wraps please questions, want call. Elizabeth today. you can and operator. that for free to now And the end all have out joining everyone up you, you reach Operator, to Thank time. to feel thank if for you it any Great. I that

Operator

for conclude participation. today's thank your does call. you We This

You at any may time. disconnect

United Rentals (URI) 26 Oct 232023 Q3 Earnings call transcript