Slide 1: Executing for Growth and Returns
Executing for Growth and Returns Company and Industry Background Fourth Quarter and Full Year 2017
Slide 2: Introductory Information
Introductory Information Unless otherwise specified, the information in this presentation, including forward-looking statements related to our outlook, is as of our most recent earnings call held on January 25, 2018. We make no commitment to update any such information contained in this presentation
Slide 3: Table of Contents
Table of Contents Introduction 2 Market Overview 8 Margin Enhancement 11 Specialty 16 Growth Through Customer Solutions 21 Fleet 25 Capital Structure 30 Appendix 36 3
Slide 4: Introduction
Introduction is the Industry Leader, Creating a New Standard for Operational Execution to Drive Growth and Returns Through the Cycle 4
Slide 5: Equipment Rental Leader
Equipment Rental Leader #1 U.S. Market Share 997 locations across North America United Rentals Diversified mix 12%* HERC – Industrial/Non Construction – 50% Other 3% 78% – Non-Residential Construction – 46% Sunbelt 7% – Residential – 4% Team of approximately 15,000 employees Scale Creates Di
Slide 6: Creating a New Industry Standard
Creating a New Industry Standard Our Vision Deploying the best people, equipment and solutions to enable our customers to safely build a better and Superior stronger future returns to our stockholders by achieving Driven By These Values strong and consistent Safety First financial Leading By Exa
Slide 7: Our Four Pillar Strategy for Success
Our Four Pillar Strategy for Success New Standard Expand Specialty Fill Growth Grow the Core for Operational Businesses Pipeline Execution National Account Customer Grow cross-sell and Invest in related Strategy Service model customer relevancy adjacencies, such as pumps Total Control® M
Slide 8: Market Overview
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Slide 9: North American Rental Industry Growth Expected Ahead
North American Rental Industry Growth Expected Ahead IHS Markit Forecast $Bn 5% 4% 60 5% 4% 4% 50 4% 7% 8% 7% -1% 10% 40 7% 8% 12% 34% -18% 11% 30 9% 6% 5% 0% 6% 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 U. S. Construction E
Slide 10: Why Rent?
Why Rent? Reasons to Rent Manage risk Save disposable costs Control expenses and inventory Cost control The right equipment for the job Equipment tracking 24/7 customer care No licenses Save on storage/warehousing Conserve capital Reduce downtime No need for maintenance Renta
Slide 11: Margin Enhancement
Margin Enhancement Applying Powerful Tools to Deliver Further Margin Expansion
Slide 12: Unique Operating Advantages Support Further Margin Enhancement
Unique Operating Advantages Support Further Margin Enhancement Best Cost Continuous Structure Improvement Lean Scale Initiatives/ Advantage Operational Excellence Business Metro Mix Model Emphasizing Higher Utilization Contribution Margin Potential 12
Slide 13: Project XL
Project XL Eight work streams generating EBITDA Improvement, Regardless of External Environment Value Stream Example • Increase Single Point of Sales Contact for Key Accounts Goal • Improve customer engagement and experience via single point of to increase share of wallet and optimize customer a
Slide 14: Telematics
Telematics Commitment to Customer Benefits Internal Benefits Telematics Targeting over Visibility into run- Performance 270,000 units of time and equipment monitoring and service fleet utilization alerts Locating of off-rent Telematics standard Ability to locate equipment for pick-up on
Slide 15: Stronger Market, Customer & Fleet Mix
Stronger Market, Customer & Fleet Mix Diversified End Market Exposure Larger, More Stable Customers Residential 4% Non- Unassigned Residential 31% 46% Accounts Industrial/ 69% Key Accounts 50% Non-Construction Increasing Specialty Exposure Diversified Account Base(1) Specialty* Accounts % of Revenue
Slide 16: Specialty
Specialty Increases Customer Entanglement While Enhancing Returns
Slide 17: What is Specialty Rental?
What is Specialty Rental? Trench Safety Power & HVAC Pump Solutions Tool Solutions Excavation support Complete solutions for Full range of pumps, Tool trailers stocked with solutions, confined space mobile power and air flow hose, & fittings for fluid hoisting, torqueing, pipe entry equipmen
Slide 18: Strategy by Business
Strategy by Business Trench Safety Power & HVAC Pump Solutions Tool Solutions Strategy Lead in product Expand footprint and Expand footprint. Utilize Gen Rent sales innovation. product offering. force to gain share in Diversify end markets Increase compliance Focus on Industrial, Indus
Slide 19: Why is Specialty Rental an Attractive Business?
Why is Specialty Rental an Attractive Business? Customer Improve relationships with high-value industrial Loyalty and key accounts Competitive Offer customized solutions to customer verticals Advantage requiring deep expertise Grow via expanding markets, cross-selling Growth initiatives High R
Slide 20: Economics of Specialty: High Returns on Initial OEC Investment
Economics of Specialty: High Returns on Initial OEC Investment Multiple of Cash Flows Earned Over Asset Life/OEC 8.8x 4.6x 4.5x 3.9x Trench Tools Pumps Power & HVAC Asset Life: 10-15 yrs ~7 yrs 7-10 yrs ~10 yrs EBITDA/OEC: 62% 56% 48% 35% Specialty is Accretive to Overall ROIC 20
Slide 21: Growth Through Customer Solutions
Growth Through Customer Solutions Achieve Superior Performance by Leveraging Unique Advantages
Slide 22: Customer Solutions Drive Revenue Growth and Capital Efficiency
Customer Solutions Drive Revenue Growth and Capital Efficiency Tailored engagement strategies to meet the specific needs of different customers – from large enterprises Engagement to small, local businesses Strategy Focus dialogue on solutions to increase productive ―wrench time‖ for customers
Slide 23: A Meaningful Competitive Edge
A Meaningful Competitive Edge 7691 7271 6761 6304 5708 4655 4892 3510 3750 3265 2963 2294 1691 1885 1607 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 Total Control® Installations Customers Value Total Control ® 23
Slide 24: Digital Channel Launched
Digital Channel Launched Launched UR One – our consolidated digital platform with a new consistent experience Extending our online catalog, order entry and e-commerce capabilities to simplify transactions Expanding our digital rental and project management capabilities that leverage telematics
Slide 25: Fleet
Fleet ) United Rentals:
Slide 26: Fleet Mix
Fleet Mix Customers Know We Have the Fleet They Need Trucks Welders Trench 1% 5% 1% Power 5% Other 9% Aerial 37% Light $11.5 Billion of Fleet Comprised of 1% Forks - Rough 0.7% 520,000 Units Forks - Reach 18% Compaction 2% Compressors Forks - Industrial 3% 3% Dirt 14% Serves Diverse Customer Base 26
Slide 27: Total Cost of Ownership
Total Cost of Ownership $ Thousands Brand A Brand B Brand C Acquisition cost 93 95 89 Maintenance cost over life (parts) 7.5 9 8 Maintenance cost 9 9 10 over life (labor) Resale value (50) (53) (52) after 7 years (retail) Total Cost of 59.5 60 55 Ownership Gap vs. Best of Best +8% +9% Brand C Has a
Slide 28: Rental Useful Life Evaluation
Rental Useful Life Evaluation Rental Revenue % of Average R&M Cost % of Replacement Cost (est) 120% 2.5% 100% 2.0% 80% 1.5% 60% 1.0% 40% 20% 0.5% 0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Resale Value % of Replacement Cost 140% Rental useful life evaluated to set 120% optimal a
Slide 29: Maintenance and Growth CapEx
Maintenance and Growth CapEx 2011 2012 Combined Combined 2013 2014 2015 2016 2017 Pro-forma Pro-forma OEC Sold** $752 $933 $941 $1,016 $1,007 $917 $1,045 Inflation Factor* 14% 14% 14% 14% 14% 14% 14% Inflation Uplift 104 129 133 142 141 128 146 Total Maintenance $856 $1,062 $1,074 $1,158 $1,148 $1,0
Slide 30: Capital Structure
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Slide 31: Our Principles: Maximizing Financial Flexibility
Our Principles: Maximizing Financial Flexibility Valuable asset base supports reasonable amount of debt – High operating margins generate significant cash flow/dollar of revenue – Asset base can be monetized to support cash flow requirements Debt maturities timed to avoid excessive refinancing n
Slide 32: Ample Liquidity to Fund Business
Ample Liquidity to Fund Business $3,000 $ Millions Total Liquidity of $1.7B*** $1,282 ABL Fixed vs. Floating Ratio: 75%/25% Unused $1,675 $1,000 $1,550 4.625% $750 $750 Senior Secured 4.625% $775 $1,000 Notes Senior $1,000 $1,000 $1,718* Unsecured 4.875%** $80 A/R ABL Used $850 Notes Senior Unused U
Slide 33: Capital Allocation Strategy
Capital Allocation Strategy Invest in Growth Return Cash Managing to Leverage Organic M&A Stockholders Target leverage range Continued organic Balanced strategy Executed $655M of over the cycle of investments to creates flexibility to $1B share repurchase 2.5x–3.5x support growth and pursue
Slide 34: Consistent Free Cash Flow Generation Over Cycle
Consistent Free Cash Flow Generation Over Cycle Cash Flow 2008–2017 ($M)** 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EBITDA ($117) $589 $649 $879 $1,772 $2,181 $2,599 $2,774 $2,665 $2,895 Cash Interest (218) (234) (229) (203) (371) (461) (457) (447) (415) (357) Cash Taxes (Paid) Received (46
Slide 35: Historical Capital Allocation
Historical Capital Allocation 2010–2017 Priorities 21% Organic Investment Share Debt Issuance 21% Repurchases 15% Manage Leverage Cash 33% Targets Acquisitions (2.5x–3.5x) Cash from 79% Operations CapEx 52% Strategic M&A Return to Net Sources Net Uses Stockholders of Capital of Capital 100% Equals $
Slide 36: Appendix
Appendix © United a?
Slide 37: Corporate Governance
Corporate Governance Focus on Best Practices Amended Company charter to eliminate Board classes Roles of Chairman and CEO are separated and the Chairman is an independent director 9 of 10 directors are independent Board and each committee have express authority to retain outside advisors B
Slide 38: Glossary of Terms
Glossary of Terms 1. Capex: Capital expenditures represent the amount reported in our statements of cash flows for the purchase of rental and non-rental equipment. 2. Dollar Utilization: Annualized rental revenue, excluding re-rent and ancillary revenue, divided by the average original equipment cos