United Rentals, Inc. · NYSE:URI

United Rentals — Q4 2021 Earnings Presentation

53 slides from United Rentals's earnings presentation, Jan 27, 2022

1. Slide 1: Fourth Quarter and Full Year 2021 Investor Presentation

   Fourth Quarter and Full Year 2021 Investor Presentation Managing Key Value Drivers to Maximize Full Cycle Returns United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

2. Slide 2: Introductory Information

   Introductory Information Unless otherwise specified, the information in this presentation, including forward-looking statements, is as of our most recent earnings call held on January 27, 2022. We make no commitment to update any such information contained in this presentation. Certain statements in

3. Slide 3: Contents

   Contents 1. Introduction 2. End-Market Overview 3. Company Overview 4. Summary of Key Financial Data 5. Appendix United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved. 3

4. Slide 4: Introduction

   1 Introduction United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

5. Slide 5: Maximizing value creation across the cycle by balancing growth, margins and free cash flow

   Maximizing value creation across the cycle by balancing growth, margins and free cash flow to drive returns Aggressive management of key value drivers within our control 5

6. Slide 6: Company overview

   Company overview (1) #1 Market Share • 2021 total revenue $9.72 billion (+13.9% Y/Y) • 2021 adjusted EBITDA(2) $4.41 billion (+12.3% Y/Y; 45.4% margin) 1,288 locations across North America(3) • 1,149 branches in the U.S.; locations in 49 of 50 states United Rentals • 139 branches in Canada; location

7. Slide 7: Our customers and the benefits of renting vs. owning

   Our customers and the benefits of renting vs. owning Customer Mix* Why Customers Rent Instead of Buy Residential construction • Conserve capital / focus on core business • Multi-Family Industrial • The right equipment for any job/availability & Other 4% • Reliability/reduce downtime • Power / Utilit

8. Slide 8: Branch locations

   Branch locations North American branch count 1,288(1) • General Rentals: 841 locations • Specialty: 447 locations(2) Largest U.S. states by number of locations(1) • Texas: 164 • California: 114 • Florida: 73 • Louisiana: 51 • Georgia: 47 Largest and broadest footprint in North America (1) As of Dece

9. Slide 9: Diverse end-market exposure

   Diverse end-market exposure Infrastructure Non-Res Construction Residential Downstream O&G Midstream O&G 2021 Revenue by Vertical Upstream O&G Chemicals Industrial Manufacturing Metals & Minerals Consumer Related Broad customer base helps reduce full-cycle volatility *Note: Based on 2021 rental reve

10. Slide 10: A decade of continued financial improvement

    A decade of continued financial improvement… Total Revenue Adjusted EBITDA(1) Adjusted EPS(1) $11,000M $5,000M $25 $10,000M CAGR $4,500M CAGR CAGR $9,000M 14.0% $4,000M 16.9% $20 28.0% $8,000M $3,500M $7,000M $3,000M $15 $6,000M $2,500M $5,000M $4,000M $2,000M $10 $3,000M $1,500M $2,000M $1,000M $5

11. Slide 11: …that has ultimately been reflected in free cash flow

    …that has ultimately been reflected in free cash flow 2011-2021 Average Free Cash Flow Conversion: 118%(2) Free Cash Flow ($M) $2,600 $2,400 $2,200 Average FCF as % of $2,000 EBITDA(1): 31.1% $1,800 $1,600 $1,400 $1,200 Average FCF as % of $1,000 EBITDA(1): 20.4% $800 $600 $400 $200 $0 ($200) 2002 2

12. Slide 12: Driving and extending our competitive advantages

    Driving and extending our competitive advantages • Company transformed to be considerably more profitable and efficient • Operations, technology and culture differentiate us, and make us far more agile Maximize revenue potential with • Diversified end-market exposure across customers, current & new

13. Slide 13: End-market overview

    2 End-market overview United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

14. Slide 14: U.S. equipment rental industry overview

    U.S. equipment rental industry overview Combined U.S. General Rental and Construction & Industrial Equipment The U.S. equipment rental market has outgrown its Rental Market Size ($bn) underlying market by over 50% in the last 20 years $60 Indexed Growth: US Equipment Rental Market 400% $55 23-year 1

15. Slide 15: Real total U.S. construction spending per capita

    Real total U.S. construction spending per capita Real total U.S. construction spend per capita 10-year avg 20-year avg 30-year avg 40-year avg $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

16. Slide 16: Company overview

    3 Company overview United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

17. Slide 17: Core values provide the foundation of our culture

    Core values provide the foundation of our culture Visible Leadership Lead by example in every A Passion for People business decision and action, Customer-Driven Build a diverse workplace that with a sense of humility and Support the best interests of our challenges all employees to responsibility. c

18. Slide 18: Strategic evolution over 20+ years

    Strategic evolution over 20+ years 1997–2008 2009–2013 2014–present Become a market leader Optimize scale, diversify, Building on and transforming and drive profitable growth the Core 2009: Increased focus on customer service and Continued build-up of 1997: Founded / IPO improving returns through Ge

19. Slide 19: Long-term growth and margin opportunities

    Long-term growth and margin opportunities Revenue Related Cost and Margin Related • Capitalize on ongoing secular shift • Further leveraging of LEAN towards rental over ownership • Optimization of operating costs • Leverage cross-selling to capture more • Continual improvement of labor productivity

20. Slide 20: Competitive positioning aided by structural advantages

    Competitive positioning aided by structural advantages Size, Breadth and Benefits of Scale, Investments in Diversity of Fleet Scope & Diversification Technology Strong Balance Strong Culture Focused Proven Sheet + Cash Flow on Employees, Customers & Management Team Shareholders Focus on driving and

21. Slide 21: Online digital strategy and results: 2021

    Online digital strategy and results: 2021 Increase Demand Through Enhance the Customer Digital Marketplace + Experience + Extend Service offerings • Generate awareness and interest • Access real-time account and • Conduct Safety training through equipment GPS information United Academy (UA) • Acquir

22. Slide 22: Enhance customer experience: Digital Tools

    Enhance customer experience: Digital Tools Rental Fleet Management platform which enables: • Open and close rental contracts • View invoices and pay bills Total Control® • Locate GPS enabled equipment • Customize alerts to proactively manage utilization • Customize reports and KPIs On the go functio

23. Slide 23: Telematics & FAST

    Telematics & FAST Field Automation Telematics & Related Technologies Systems & Technologies (FAST)  Internal Benefits:  Internal Benefits: – Performance monitoring and service alerts – Increased driver and dispatcher productivity – More efficient location and pick-up capabilities – Improved fleet

24. Slide 24: Investing in Specialty solutions to complement GenRent

    Investing in Specialty solutions to complement GenRent Trench Safety Power & HVAC Fluid Solutions Tool Solutions Onsite Services Portable Storage & Modular Space • Excavation • Complete • Full range of • Tool trailers • Plastic port-a- • Portable storage, support solutions for equipment to stocked w

25. Slide 25: Specialty provides strong growth opportunities

    (1) Specialty provides strong growth opportunities millions Specialty Revenue $2,692 $2,750 $2,500 $2,250 2012-2021 CAGR: 27.8% $2,165 $2,089 $2,000 $1,720 $1,750 $1,500 $1,254 $1,250 $1,021 $1,000 $931 $823 $750 $471 $500 $297 $250 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Specialty as %

26. Slide 26: Long-term capital allocation strategy

    Long-term capital allocation strategy Manage Return Excess Leverage Invest in Growth Cash to Investors • Target leverage range over • In January 2022, our Board of the cycle of 2.0x–3.0x. Organic M&A Directors authorized a new $1 • Net leverage(1,2): 2.2x billion share repurchase program, • Continue

27. Slide 27: M&A strategy: Disciplined and opportunistic

    M&A strategy: Disciplined and opportunistic Strategic Financial Cultural • Proactively supports growth in • Invest capital at attractive returns • Safety attractive markets over cycle • Talent • Difficult to replicate organically • Revenue growth • Margin opportunities • Ethics and integrity • Acces

28. Slide 28: Record of value creation through M&A

    Record of value creation through M&A RSC National Pump NES Neff Rentals BakerCorp BlueLine General Finance (2012) (2014) (2017) (2017) (2018) (2018) (2021) • Size: $4.2B • Size: $780M • Size: $965M • Size: $1.3B • Size: $720M • Size: $2.1B • Size: $1.0B transaction value transaction value transactio

29. Slide 29: ESG Highlights: Environmental

    ESG Highlights: Environmental Our Impacts Along the Value Chain Energy Intensity (MWh/$M revenue)1 200 184.42 180 175.2 170.9 160.1 161.6 160 External impacts 140 External impacts Internal impacts 120 Internal impacts 100 2017 2018 2019 2020 9/30/21 YTD 1 Results for 2018 and 2019 have been restated

30. Slide 30: ESG Highlights: Social & Employee Related

    ESG Highlights: Social & Employee Related TRIR (Safety Measurement) 1.00 0.95 Selected Highlights 0.80 0.79 0.78 0.79  Total Recordable Incident Rate (TRIR) of 0.79 for 2021 0.60  High levels of employee engagement and retention 0.40  Issued all employees shares of United Rentals stock in 2020 to

31. Slide 31: ESG Highlights: Corporate Governance

    ESG Highlights: Corporate Governance Corporate Governance Highlights Board of Directors Overview Board Independence Board Performance The strength of our Board is highlighted by our directors' collective skills and expertise, as illustrated • 9 of 11 Directors are independent • Risk oversight by the

32. Slide 32: Summary of key financial data

    4 Summary of key financial data United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

33. Slide 33: Key financial results snapshot

    Key financial results snapshot Adjusted Earnings per Share Total Revenue ($M) Adjusted EBITDA(1) ($M) (EPS)(1,2,3) 2021 5-Year CAGR: 2022 Implied Growth: 2021 5-Year CAGR: 2022 Implied Growth: 2021 5-Year CAGR: +20.6% +11.0% +11.7% +9.9% +14.4% $11,000 $6,000 $25 $10,000 $9,000 $5,000 $20 $8,000 $7,

34. Slide 34: Structural changes are key to increased margins

    Structural changes are key to increased margins Adjusted EBITDA Margin(1) (%) Key Drivers of Margin Gains Adjusted EBITDA margin ~1,400 bps above prior peak (3) • Strong fixed-cost absorption 60% • Cyclical leverage (e.g., SG&A as % of sales) 50% • M&A cost synergies (e.g., RSC, NES, Neff) 40% • Ope

35. Slide 35: Consistent free cash flow generation

    Consistent free cash flow generation Free Cash Flow ($M) (1) 10-Yr Average (2) 5-Yr Average (3) $2,500 $2,454 $2,100 $1,600 $1,700 $1,592 $1,527 $1,334 $1,300 $1,195 $983 $924 $900 $574 $500 $421 $335 $367 $227 $100 $23 ($73) -$300 (4) (4) (5) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2

36. Slide 36: Q4 2021 Results

    Q4 2021 Results Total Revenue • $2.776 billion (+21.8% Y/Y) Net Income • $481 million (17.3% margin; +430 bps Y/Y) Adjusted EBITDA* • $1.309 billion (47.2% margin; +170 bps Y/Y) * Adjusted EBITDA is a non-GAAP measure. See the tables provided elsewhere in this presentation for reconciliations to the

37. Slide 37: FY 2021 Results

    FY 2021 Results Total Revenue • $9.716 billion (+13.9% Y/Y) Net Income • $1.386 billion (14.3% margin; +390 bps Y/Y) Adjusted EBITDA* • $4.414 billion (45.4% margin; -70 bps Y/Y) • $2.030 billion, after gross purchases of $2.998 Net Rental Capital Expenditures billion Net Cash Provided by Operating

38. Slide 38: 2022 Financial Outlook

    2022 Financial Outlook Total Revenue • $10.65 billion to $11.05 billion Adjusted EBITDA* • $4.95 billion to $5.15 billion • $1.85 billion to $2.05 billion, after gross Net Rental Capital Expenditures purchases of $2.9 billion to $3.1 billion Net Cash Provided by Operating Activities • $3.5 billion t

39. Slide 39: Fleet productivity: overview

    Fleet productivity: overview • Fleet Productivity provides greater insight into the interplay and combined impact of key decisions made by managers every day across (a) rental rates, (b) time utilization, and (c) changes in mix on our Owned Equipment Rental Revenue (i.e., the revenue we generate wit

40. Slide 40: Fleet productivity: historical results

    Fleet productivity: historical results (1) As Reported Historical Results Actual YoY Change in Assumed YoY Impact of OEC Fleet Contribution from Reported YoY Change Average OEC Inflation on Rent Rev Productivity(2) Ancillary and Re-Rent in Rental Revenue 1Q 2019 23.7% (1.5%) (1.3%) 2.1% 23.0% 2Q 201

41. Slide 41: Balance sheet strength has improved

    Balance sheet strength has improved Leverage Ratio(1) 3.6x (2) 3.0x 3.0x (4) 2.9x 2.8x 2.9x (3) 2.7x 2.6x 2.4x 2.2x(5) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2.0x – 3.0x targeted leverage range across the cycle (1) Leverage Ratio calculated as net debt divided by LTM adjusted EBITDA. (2)

42. Slide 42: No long-term note maturities until 2027

    No long-term note maturities until 2027 Millions Total Liquidity of $2.851B(1) $5,000 $4,500 Fixed vs. Floating Ratio: 71%/29% $4,000 $3,750 $3,500 $3,000 $2,500 $2,650 Unused ABL Facility $2,000 $1,750 $1,673 $750 $1,500 $1,500 3.875% $750 $900 $968 Secured 4.00% $1,100 Notes Senior Unsecured $1,00

43. Slide 43: Appendix

    5 Appendix United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2022 United Rentals, Inc. All rights reserved.

44. Slide 44: Adjusted Earnings Per Share GAAP Reconciliation

    Adjusted Earnings Per Share GAAP Reconciliation We define “earnings per share – adjusted” as the sum of earnings per share – GAAP, as reported plus the impact of the following special items: merger related costs, merger related intangible asset amortization, impact on depreciation related to acquire

45. Slide 45: EBITDA and Adjusted EBITDA GAAP Reconciliations

    EBITDA and Adjusted EBITDA GAAP Reconciliations EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment, and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the merger related costs, rest

46. Slide 46: Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Adjusted EBITDA

    Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Adjusted EBITDA The table below provides a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA. Three Months Ended Year Ended December 31, December 31, $ Millions 2021 2020 2021 2020

47. Slide 47: Free Cash Flow GAAP Reconciliation

    Free Cash Flow GAAP Reconciliation We define “free cash flow” as net cash provided by operating activities less purchases of, and plus proceeds from, equipment and intangible assets. The equipment and intangible asset purchases and proceeds are included in cash flows from investing activities. Manag

48. Slide 48: Historical Adjusted Earnings Per Share GAAP Reconciliation

    Historical Adjusted Earnings Per Share GAAP Reconciliation Adjusted EPS (earnings per share) is a non-GAAP measure that reflects diluted earnings (loss) per share from continuing operations excluding the impact of the special items described below. Management believes that adjusted EPS provides usef

49. Slide 49: Historical Adjusted Earnings Per Share GAAP Reconciliation (cont'd)

    Historical Adjusted Earnings Per Share GAAP Reconciliation (cont’d) (1) We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impacted our operations (the "m

50. Slide 50: Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M)

    Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) EBITDA represents the sum of net income (loss), loss on discontinued operations, net of tax, provision (benefit) for income taxes, interest expense, subordinated convertible debentures, net, depreciation of rental equipment, and non-ren

51. Slide 51: Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont'd)

    Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net cash provided by operating activities (9) $ 438 $ 452 $ 612 $ 721 $ 1,551 $ 1,801 $1,987 $ 1,941 $ 2,209 $ 2,853 $ 3,024 $ 2,658 $ 3,689 Adjustments for items

52. Slide 52: Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont'd)

    Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) (1) In 2013, we retired all outstanding subordinated convertible debentures. (2) We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs ass

53. Slide 53: Historical Free Cash Flow GAAP Reconciliation ($M)

    Historical Free Cash Flow GAAP Reconciliation ($M) We define “free cash flow” as net cash provided by operating activities less purchases of, and plus proceeds from, equipment and intangible assets, and plus excess tax benefits from share-based payment arrangements. The equipment and intangible asse

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