United Rentals, Inc. · NYSE:URI

United Rentals — Q3 2020 Earnings Presentation

53 slides from United Rentals's earnings presentation, Oct 28, 2020

1. Slide 1: Third Quarter 2020 Investor Presentation

   Third Quarter 2020 Investor Presentation Managing Key Value Drivers to Maximize Full Cycle Returns United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2020 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 October 29, 2020. 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. © 2018 United Rentals, Inc. All rights reserved. 3

4. Slide 4: Introduction

   1 Introduction United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 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 Market Share(1) • 2019 total revenue $9.35 billion (+16.2% Y/Y) • 2019 adjusted EBITDA(2) $4.36 billion (+12.7% Y/Y; 46.6% margin) 1,170 locations across North America(3) United • 1,032 branches in the U.S.; locations in 49 of 50 states Rentals 13% • 138 branches in Canada; locat

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 • Control expenses and inventory • Multi-Family • The right equipment for any job • 24/7 customer care / support 5% Industrial • No need for maintenance • Downstream • Save o

8. Slide 8: Branch locations

   Branch locations North American branch count 1,170(1) • General Rentals: 812 locations • Specialty: 358 locations(2) Largest U.S. states by number of locations(1) • Texas: 155 • California: 115 • Florida: 64 • Louisiana: 48 • Georgia: 43 Largest and broadest footprint in North America (1) As of Sept

9. Slide 9: Diverse end-market exposure

   Diverse end-market exposure Infrastructure Non-Res Construction Residential Downstream O&G Upstream O&G 2019 Revenue Mid-stream O&G by Vertical Chemical Processing Consumer-related Industrial Manufacturing Metals & Minerals Power Pulp, Paper & Wood All Other Broad customer base helps reduce full-cyc

10. Slide 10: A decade of continued financial improvement

    A decade of continued financial improvement… Total Revenue Adjusted EBITDA(1) Adjusted EPS(1) $10,000M $5,000M $25 $9,000M CAGR $4,500M CAGR CAGR (2) $8,000M 14.8% $4,000M 21.4% $20 18.7% $7,000M $3,500M $6,000M $3,000M $15 $5,000M $2,500M $4,000M $2,000M $10 $3,000M $1,500M $2,000M $1,000M $5 $1,00

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

    …that has ultimately been reflected in free cash flow Free Cash 2011-2019 Free Cash Flow Conversion: 107%(2) Flow ($M) $1,800 FCF/EBITDA(1) 27.9% $1,300 $800 FCF/EBITDA(1) 20.4% $300 -$200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Durable Free Cash Flo

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. © 2018 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 400% Indexed Growth: US Equipment Rental Market $55B Indexed Grow

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 $6,000 $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 1983 1

16. Slide 16: Company overview

    3 Company overview United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 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 Customers & Shareholders Management Team Focus on driving and extending o

21. Slide 21: Online digital strategy and results: 2019

    Online digital strategy and results: 2019 Customer Acquisition and Customer Retention and Engagement + Growth + Extend Service offerings • Awareness and interest • Enhance the customer experience • Drive customer productivity via Telematics and data • New customer acquisition • Streamline transactio

22. Slide 22: Total Control: Adoption Continues to Grow and Deepen

    Total Control®: Adoption Continues to Grow and Deepen TC Feature Highlights Customer Growth 2019 User Adoption 2019 • Rental Fleet Management TC CUSTOMERS “Calls for Pick Up” • Find My Fleet Revenue $2.3 billion via TC and +4% YoY Digital Solutions • Invoices and bill pay Total Accounts 13,000 • Rep

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 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

25. Slide 25: Specialty provides strong growth opportunities

    (1) Specialty provides strong growth opportunities $2,168M $1,719M $1,254M $1,021M $931M $823M $471M $297M 2012 2013 2014 2015 2016 2017 2018 2019 Specialty as a % Total Revenues 7.2% 9.5% 14.5% 16.0% 17.7% 18.9% 21.4% 23.2% Specialty represented ~23% of total revenue in 2019 with over $2 billion in

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 • $500 million repurchase program the cycle of 2.0x–3.0x. Organic M&A commenced in the first quarter of • Net leverage(1,2): 2.4x 2020. $257 million purchased • Continu

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 (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

29. 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

30. 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

31. Slide 31: ESG Highlights: Corporate Governance

    ESG Highlights: Corporate Governance Corporate Governance Highlights Board of Directors Overview The strength of our Board is highlighted by our directors' collective skills and expertise, as illustrated Board Independence Board Performance by the following list of aggregate prioritized director com

32. Slide 32: Summary of key financial data

    4 Summary of key financial data United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 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) 2019 5-Year CAGR: +10.5% 2019 5-Year CAGR: +9.9% 2019 5-Year CAGR: +23.1% $10,000 $5,000 $20 $9,000 $4,500 $8,000 $4,000 $15 $7,000 $3,500 $6,000 $3,000 $5,000 $2,500 $10 $4,000 $2,000 $3

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 margins + 1,200 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% • O

35. Slide 35: Consistent free cash flow generation

    Consistent free cash flow generation $2,300 $2,250 $1,800 $1,592 $1,334 $1,195 $1,300 $983 $924 $800 $574 $421 $335 $367 $300 $227 $23 -$200 ($73) (3) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F $6.0B of free cash flow generated over last 5 years(2) Notes: (1) Free cash flow is

36. Slide 36: 3Q Results

    3Q Results Total Revenue • $2.187 billion (-12.1% Y/Y, as reported) Net Income* • $208 million (9.5% margin; -620 bps Y/Y) Adjusted EBITDA** • $1.081 billion (49.4% margin; +90 bps Y/Y) • $202 million, after gross purchases of $785 Net Rental Capital Expenditures (YTD) million Net Cash Provided by O

37. Slide 37: 2020 Financial Outlook

    2020 Financial Outlook Total Revenue • $8.35 billion to $8.45 billion Adjusted EBITDA* • $3.825 billion to $3.875 billion • $100 million to $150 million, after gross Net Rental Capital Expenditures purchases of $900 million to $950 million Net Cash Provided by Operating Activities • $2.45 billion to

38. Slide 38: COVID-19 Update: URI Strategy & Developments

    COVID-19 Update: URI Strategy & Developments Work stream Specific Actions - Implementing COVID-19 safety measures including social distancing Ensuring employee safety & wellbeing - Ensuring sufficient and adequate personal protection equipment (PPE) - Increased cleaning and disinfecting of facilitie

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 Fleet Contribution from Reported YoY Change Average OEC OEC Inflation on Rent Rev Productivity(2) Ancillary and Re-Rent in Rental Revenue 1Q 2016 2.8% (1.5%) (2.3%) 0.3% (0.7%) 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 2012 2013 2014 2015 2016 2017 2018 2019 3Q 2020 2.0x – 3.0x targeted leverage range across the cycle (1) Leverage Ratio calculated as net debt divided by adjusted EBITDA. In 1Q20, the Compa

42. Slide 42: No long-term note maturities until 2026

    No long-term note maturities until 2026 Millions Total Liquidity of $3.430B(1) $5,000 $4,500 Fixed vs. Floating Ratio: 78%/22% $4,000 $3,750 $3,500 $3,000 $2,500 $3,091 Unused ABL $2,000 Facility $1,730 $1,750 $1,673 $750 $1,500 $1,500 $980 3.875% $750 Term $1,000 Secured 4.875% 4.00% $1,100 Notes $

43. Slide 43: Appendix

    5 Appendix United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 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

    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. Nine Months Three Months Ended Ended September 30, September 30, $ Millions 2020 2019

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. The equipment purchases and proceeds are included in cash flows from investing activities. Management believes that free cash flow provides

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 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 impact our operations. The acqu

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: Reconciliations ($M) (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 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 $ 2,288 Adjustments for items included

52. Slide 52: 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 plus excess tax benefits from share-based payment arrangements. The equipment purchases and proceeds are included in ca

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