Slide 1: First Quarter 2021 Investor Presentation
First Quarter 2021 Investor Presentation Managing Key Value Drivers to Maximize Full Cycle Returns United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
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 April 29, 2021. We make no commitment to update any such information contained in this presentation. Certain statements in t
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. © 2021 United Rentals, Inc. All rights reserved. 3
Slide 4: Introduction
1 Introduction United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
Slide 5: Maximizing value creation across the cycle
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
Slide 6: Company overview
Company overview #1 Market Share(1) • 2020 total revenue $8.53 billion (-8.8% Y/Y) • 2020 adjusted EBITDA(2) $3.93 billion (-9.7 Y/Y; 46.1% margin) 1,156 locations across North America(3) United • 1,020 branches in the U.S.; locations in 49 of 50 states Rentals 13% • 136 branches in Canada; location
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 • Control expenses and inventory • Multi-Family Industrial • The right equipment for any job & Other 5% • 24/7 customer care / support • Downstream • No need for maintenance
Slide 8: Branch locations
Branch locations North American branch count 1,156(1) • General Rentals: 803 locations • Specialty: 353 locations(2) Largest U.S. states by number of locations(1) • Texas: 151 • California: 111 • Florida: 64 • Louisiana: 48 • Georgia: 42 Largest and broadest footprint in North America (1) As of Marc
Slide 9: Diverse end-market exposure
Diverse end-market exposure Infrastructure Non-Res Construction Residential Downstream O&G Midstream O&G Upstream O&G 2020 Revenue Chemical Processing by Vertical Consumer-related Industrial Manufacturing Metals & Minerals Power Pulp, Paper & Wood All Other Broad customer base helps reduce full-cycl
Slide 10: A decade of continued financial improvement
A decade of continued financial improvement… Total Revenue Adjusted EBITDA(1) Adjusted EPS(1) $9,000M $4,500M $20 $8,000M CAGR $4,000M CAGR $18 CAGR $7,000M 14.3% $3,500M 19.0% $16 48.7% $6,000M $3,000M $14 $12 $5,000M $2,500M $10 $4,000M $2,000M $8 $3,000M $1,500M $6 $2,000M $1,000M $4 $1,000M $500
Slide 11: Reflected in free cash flow
…that has ultimately been reflected in free cash flow 2011-2020 Average Free Cash Flow Conversion: 124%(2) Free Cash Flow ($M) $2,600 $2,400 $2,200 Average FCF as % of $2,000 EBITDA(1): 30.8% $1,800 $1,600 $1,400 $1,200 Average FCF as % of $1,000 EBITDA(1): 20.4% $800 $600 $400 $200 $0 ($200) 2002 2
Slide 12: Driving and extending our competitive advantages
Driving and extending our competitive advantages • Company transformed to be considerably more profitable and efficient • Operations, technology and culture differentiate us, and make us far more agile Maximize revenue potential with • Diversified end-market exposure across customers, current & new
Slide 13: End-market overview
2 End-market overview United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
Slide 14: U.S. equipment rental industry overview
U.S. equipment rental industry overview Combined U.S. General Rental and Construction & Industrial Equipment The U.S. equipment rental market has outgrown its Rental Market Size ($bn) underlying market by over 50% in the last 20 years $60 Indexed Growth: US Equipment Rental Market 400% $55 23-year 1
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
Slide 16: Company overview
3 Company overview United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
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
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
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
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 Customers & Shareholders Management Team Focus on driving and extending o
Slide 21: Online digital strategy and results: 2020
Online digital strategy and results: 2020 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
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
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
Slide 24: Investing in Specialty services
Investing in Specialty services Trench Safety Power & HVAC Fluid Solutions Tool Solutions Onsite Services • Excavation support • Complete solutions for • Full range of equipment • Tool trailers stocked • Plastic port-a-potties, solutions, confined space mobile power and air flow to contain, transfer
Slide 25: Specialty provides strong growth opportunities
(1) Specialty provides strong growth opportunities millions $2,500 2012-2020 CAGR: 27.6% $2,168 $2,090 $2,000 $1,719 $1,500 $1,254 $1,021 $1,000 $931 $823 $471 $500 $297 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Specialty as % of 7.2% 9.5% 14.5% 16.0% 17.7% 18.9% 21.4% 23.2% 24.5% Total Rev: S
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 • $500 million repurchase program the cycle of 2.0x–3.0x. Organic M&A commenced in the first quarter of • Net leverage(1,2): 2.3x 2020. $257 million purchased • Continu
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
Slide 28: Record of value creation through M&A
Record of value creation through M&A RSC National Pump NES Neff Rentals BakerCorp BlueLine (2012) (2014) (2017) (2017) (2018) (2018) • Size: $4.2B • Size: $780M • Size: $965M • Size: $1.3B • Size: $720M • Size: $2.1B transaction value transaction value transaction value transaction value transaction
Slide 29: ESG Highlights: Environmental
ESG Highlights: Environmental Our Impacts Along the Value Chain Energy Intensity (MWh/$M revenue) 200 194.4 177.5 180 173.1 External impacts 162.3 160 Internal impacts 140 120 100 2016 2017 2018 2019 GHG Intensity (MT CO2e/$M revenue) 60 50.6 51.0 47.4 50 42.4 40 30 Integration of LEAN practices t
Slide 30: ESG Highlights: Social & Employee Related
ESG Highlights: Social & Employee Related TRIR Rate (Safety Measurement) 2019 Selected Highlights 1.00 0.83 0.77 0.79 0.78 62% increase in diverse supplier spending to 9% of overall spend in North America 0.80 0.60 137% increase in spending with minority-owned enterprises 0.40 0.20 Adopted a H
Slide 31: ESG Highlights: Corporate Governance
ESG Highlights: Corporate Governance Corporate Governance Highlights Board of Directors Overview Board Independence Board Performance The strength of our Board is highlighted by our directors' collective skills and expertise, as illustrated • Nine of 11 Directors are independent • Risk oversight by
Slide 32: Summary of key financial data
4 Summary of key financial data United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
Slide 33: Key financial results snapshot
Key financial results snapshot Adjusted Earnings per Share Total Revenue ($M) Adjusted EBITDA(1) ($M) (EPS)(1,2,3) 2020 5-Year CAGR: 2021 Implied Growth: 2020 5-Year CAGR: 2021 Implied Growth: 2020 5-Year CAGR: +16.8% +8.0% +8.4% +6.8% +6.8% $10,000 $5,000 $20 $9,000 $4,500 $8,000 $4,000 $15 $7,000
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 ~1,300 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
Slide 35: Consistent free cash flow generation
Consistent free cash flow generation $2,500 $2,454 $2,100 $1,800 $1,700 $1,592 $1,334 $1,300 $1,195 $924 $983 $900 $574 $500 $421 $335 $367 $227 $100 $23 ($73) -$300 (3) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021F ~$7.6B of free cash flow generated over last 5 years(2) Not
Slide 36: 1Q 2021 Results
1Q 2021 Results Total Revenue • $2.057 billion (-3.2% Y/Y) Net Income* • $203 million (9.9% margin; +180 bps Y/Y) Adjusted EBITDA** • $873 million (42.4% margin; -70 bps Y/Y) Net Rental Capital Expenditures • $28 million, after gross purchases of $295 million Net Cash Provided by Operating Activitie
Slide 37: 2021 Financial Outlook
2021 Financial Outlook Total Revenue • $9.05 billion to $9.45 billion Adjusted EBITDA* • $4.1billion to $4.3 billion • $1.25 billion to $1.45 billion, after gross Net Rental Capital Expenditures purchases of $2.2 billion to $2.4 billion Net Cash Provided by Operating Activities • $3.1 billion to $3.
Slide 38: 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
Slide 39: Fleet productivity: historical results
Fleet productivity: historical results (1) As Reported Historical Results Actual YoY Change in Assumed YoY Impact of Fleet Contribution from Reported YoY Change Average OEC OEC Inflation on Rent Rev Productivity(2) Ancillary and Re-Rent in Rental Revenue 1Q 2017 3.9% (1.5%) 1.4% 0.6% 4.4% 2Q 2017(3)
Slide 40: 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 2.3x 2012 2013 2014 2015 2016 2017 2018 2019 2020 1Q 2021 2.0x – 3.0x targeted leverage range across the cycle (1) Leverage Ratio calculated as net debt divided by adjusted EBITDA. (2) Pro
Slide 41: No long-term note maturities until 2026
No long-term note maturities until 2026 Millions Total Liquidity of $3.745B(1) $5,000 $4,500 Fixed vs. Floating Ratio: 78%/22% $4,000 $3,750 $3,500 $3,000 $2,500 $3,191 Unused ABL Facility $2,000 $1,750 $1,673 $1,500 $750 $1,500 3.875% $750 $975 $1,000 Secured Notes 4.00% $1,100 4.875% $1,000 $800 S
Slide 42: Appendix
5 Appendix United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2021 United Rentals, Inc. All rights reserved.
Slide 43: 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 intangible asset amortization, impact on depreciation related to acquired fleet and property a
Slide 44: 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 restructuring charge, stoc
Slide 45: Reconciliation of Net Cash Provided by Operating Activities to 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 March 31, $ Millions 2021 2020 Net cash provided by operating activ
Slide 46: 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. The equipment purchases and proceeds are included in cash flows from investing activities. Management believes that free cash flow provides
Slide 47: 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
Slide 48: Historical Adjusted EPS 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
Slide 49: Historical EBITDA and Adjusted EBITDA GAAP Reconciliations
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) EBITDA represents the sum of net income (loss), loss on discontinued operations, net of tax, provision (benefit) for income taxes, interest expense, subordinated convertible debentures, net, depreciation of rental equipment, and non-ren
Slide 50: Historical EBITDA Reconciliations (cont'd)
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) YTD 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 $ 758 Adjustments for ite
Slide 51: Historical EBITDA Reconciliations (cont'd)
Historical EBITDA and Adjusted EBITDA GAAP Reconciliations ($M) (cont’d) (1) In 2013, we retired all outstanding subordinated convertible debentures. (2) We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs ass
Slide 52: Historical Free Cash Flow GAAP Reconciliation
Historical Free Cash Flow GAAP Reconciliation ($M) We define “free cash flow” as net cash provided by operating activities less purchases of, and plus proceeds from, equipment, and plus excess tax benefits from share-based payment arrangements. The equipment purchases and proceeds are included in ca