Good morning and welcome to the United Rentals second quarter 2012 investor conference call. Please be advised that this call is being recorded. Before we begin, 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 risk 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 release. For more complete description of these and other possible risks, please refer to the company's annual report on Form 10-K for the year ended December 31, 2011 as well as the subsequent filings with the SEC. You can access these filings on the company's website at www.ur.com. Please note that United Rentals has no obligation and makes not commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations. You should also note that today's call includes references to free cash flow, adjusted EPS, EIBTDA and adjusted EBITDA, each of which is non-GAAP term. Speaking today for United Rentals is Michael Kneeland, Chief Executive Officer; William Plummer, Chief Financial Officer; and Matt Flannery, Chief Operating Officer. I will now turn the call over to Mr. Kneeland. Mr. Kneeland, you may be gin.

Thanks, Operator. Good morning, everyone, and welcome. With me today is Bill Plummer, our CFO, and Matt Flanner, who became our Chief Operating Officer in April with other members of our senior management team. We'll take a look at the quarter review and we're going to update you on the RSC integration and give you our thoughts on the balance of the year. And after that, we'll take your questions. The second quarter, as you know, was a transformation for us. It includes one month of our results as a standalone company and two months in combination with RSC. That meant our employees had to manage an incredible amount of change during the quarter and they still turned in some great results despite the attention required by the integration. As we reported last night, we had a 61.3% increase in rental revenue year-over year, a 7.4% increase in rates and a 63.7% increase in rental volume and $418 million of adjusted EBITDA and an adjusted EBITDA margin of 42.1%. That's seven points higher than a year ago and it's a company record for us. Time utilization came in a little softer than we expected in the quarter and it was down by two-tenths of a percentage point year-over-year. That's primarily tied to the deployment of our fleet and we brought $1 billion of fleet into the market and it performed very well for us with the exception of a few regions. We felt it was prudent to adjust our outlook for time utilization while we assess the markets for our new combined footprint. We now expect full year time utilization to be at 68% on a Pro Forma basis and this is the same as last year, which is a record for United Rentals. The other Pro Forma targets we…

Thanks, Mike, and good morning, everyone. I'd like to start with a progress report on our integration efforts and then give you a brief overview of market conditions across our regions. I'm happy to report that our integration efforts got off to a very strong start in May and we've made significant progress since our last call. In early June we integrated the legacy RSC branches onto our technology platform, so the entire network is now operating on a common ERP system. Now, this was a key dependency for the majority of our cost synergies and we hit that mark ahead of schedule. The fact that we achieved that conversion within six weeks of closing the transaction is a credit to the tremendous effort and hard work of our combined IT teams. And most important, from our customers' perspective, it was a smooth transition that resulted in minimal disruption to our base business and it allowed us to launch our branch consolidations ahead of schedule. So as you saw last night, we planned to consolidate 185 branches and we expect to have the majority of those completed by the end of this month. That should give you an idea of how efficiently we're moving through the integration. This has allowed us to achieve $17 million in cost synergies in Q2 versus an original estimate of $6 million. So as a result, we've raised our 2012 realized cost synergy target to $80 million and we're reaffirming our total cost synergy target of $230 million. We're making good progress on the revenue side of the integration as well. We've identified $50 million of incremental EBITDA from approximately $65 million of revenue synergies. And similar to the cost synergies, we expect his to be fully developed and achieved in 2014. Now this is…

Thanks, Matt, and thanks, Mike. Good morning to everyone. As is our usual practice, I'll go through the second quarter numbers in a little bit more detail and hopefully add some color so that everyone can understand a little better how the quarter played out. This quarter is one of the most difficult challenges the company could have in talking about its results, however. With a large acquisition, the reported numbers really look different than what you're used to, so I'll try to add some texture to help you understand that and talk a little bit about our performance on a Pro Forma basis. Apologies if I get a little repetitive on that as reported versus Pro Forma but I think it's really important. We'll start with the P&L, touch on liquidity and cap structure and then finish up with an update on the outlook for the full year. So starting with the report, the results as we reported, Mike hit the highlights already. Revenue, our revenue was up 61.3% in the quarter, strong rate end volume contributions in the quarter's results, so rates were up, as Mike said, 7.4% year-over-year. And if you look at that on a sequential basis compared to the first quarter of this year, rates were up 1.3 percentage points, so a strong rate performance anyway that you look at it and certainly it is a great way to start the first half of the year. In fact, I'll touch on it a little bit later but the momentum that we were experiencing in the first half has given us the confidence to raise our outlook for pricing for the full year. If you look at our volume performance in the quarter, our measure volume, what we see on rent was up 63.7% over the…

(Operator Instructions). Your first question comes from the line of Henry Kirn – UBS.

On a Pro Forma basis, the rental revenue was up 15% in the second quarter. Now, I know you don't give full-year revenue guidance but could you give some color on the level of growth that you might expect for the second half of the year given the comps that you face?

I think the fair thing to say would be that we would expect the level of growth in let's say the third quarter to be down a touch from where it was in the second quarter. So on a Pro Forma basis we were 15%. I would expect that we would come down just a shade from that just given the strength of the third quarter last year. And obviously the interplay of rate and time utilization in the quarter will determine exactly where we ended up. But it's hard to keep repeating against the comps that we know are coming in the third and fourth quarter and so I'd say down a touch.

Your next question comes from the line of Peter Cheng – Credit Suisse.

I guess to build on Henry's question and, again, with the caveat that you don’t give explicit financial guidance, but with the inner play of the growth in your rate guidance compared to the decrease of the utilization, I mean, would you say if you did give explicit financial guidance that this would be a flat raise or lower? I mean, it looks like a flat to me. But the reason why I ask is because I think there's some confusion that utilization is more important than the increase in rental rates, which actually drive higher EBITDA and I just want to get your comment on that.

If – maybe I can simplify. As we think about the full year today compared to the way we thought about the full year back in May when we gave you that outlook, the inner play between rate and time results in a view of profitability that's really not significantly today than it was back in mid May. So even though rates have done a little better, time has done a little worse, when we look at that and blend it with the underlying cost performance that we expect, the synergies that we expect and so on, the profitability looks – the picture looks very much the same today as it did back in mid May.

Your next question comes from the line of Seth Weber – RBC Capital Markets.

Going back to the rate question, I'm just trying to understand the sustainability, your comfort in the sustainability, the rate strength. I mean, is it – do you think it's a function that your smaller customers just don't have product to put out in the market or is it that you're resetting previously lower-priced contracts? And the reason why I'm asking is because one of your bigger competitors reported recently with rates that were more like in the 3% to 4% range.

Yes, I can't speak for my competitors. I don't know where they're coming from or what their (dollar) utilizations or – I mean, all I can tell you is that the way we report rates based on ARA metrics and that' show we go forward. But what we see is what we're doing is – one, our value proposition we think is more attractive. We do think that we're harmonizing our contracts with some of our larger – our contractors but that's not – that's only part of it. I think the other part of it is our broad footprint and having the fleet to satisfy the demand that we see out there. I just – I want to point one thing out that I think gets lots in the shuffle here is – and I've mentioned this in the past – based on my experience of 34 years in the industry, rates, one is very near and dear to me. I've said it several times over the years but typically with rates going up gives you – should give you some comfort that the underlying business is doing well. Overall I've never experienced a downturn where time led it. It was always rates led the downturn. So I look at rates as a lever that we're pulling, something that we think is – we're good stewards of our industry and we're going to continue to drive. We're still not anywhere near where we came off from our peak and we're just driving it to the extent we can.

Maybe if I could shift gears a little bit to the equipment, to the fleet, the fleet age, the age of the booms and the lifts is up to 55 months. I mean, can you talk about what your target is for that category and maybe just help us understand why the utilization in that particular category came down from 1Q?

From the (areal) perspective or are you talking about any other specifics?

I mean, specifically on the (areal) side. The fleet, the age of the fleet is up to 55 months. What's your target for that category and maybe just some explanation why the utilization of that category came down.

So as far as the age, we're very comfortable with that age. Within that you have your scissors, your rough terrain scissors and then your boom lifts. And we can age lifts significantly further than our current age if we needed to. As far as the time utilization, our time utilization is still well into the 70s on almost every category in our (areal) and even our reach forklifts. Part of what we're running up against is we were probably losing business last year. We were running time utilization well into the 80s on many categories and long term that's not healthy. There could be some discussion of overall of whether the denominator versus the numerator drove our time utilization issue here this year because we did have significant growth. But I think we're in good position where we are, and Mike stated it in his opening comments, to take advantage of opportunities in the marketplace, specifically while we're merging the customers from the two organization together. So I'm very comfortable where we are from the age and time utilization from an (areal) perspective and we continue to see that ramp up throughout the – to the peak season in the fall.

Yes, and Seth just real quickly, some of the change that you're seeing in both the age and the time utilization probably comes from the fact that this is presented on a Pro Forma basis now whereas in the prior period they would have been in URI only basis. So I don't know off the top of my head how much of an impact that is but that might be some of the change.

Your next question comes from the line of David Raso – ISI Group.

Real quick, the July rental rate so far, if your Pro Forma year-to-date around (7374) full year at 6.5, obviously it implies the second half, call it 5.5, 5.7, something like that, quoted to date, where are we versus that implied second half average? Are we even above 6.5, six? Where are we?

Well, according to today, it's pretty short right here, David. But right now, we're better.

Better than the 6.5 or better than the five, 5.5, 5.7, back half implied data? Are you above the full year 6.5 still?

We're better than both.

What I’m alluding to is you mentioned the incremental margins in the second quarter were high and obviously the year-to-date, the Pro Forma incremental margins are 76. The second half of the year your comment about the inner play between rates up, utilization down about the same profit and profile as you had, we saw in the second quarter when rate drives the story more than utilization, especially a net positive for the EBITDA that (inaudible), second half we have more synergies as well than we had in the second quarter run rate. So when you look at the incremental EBITDA for the back half of the year – you can answer it any way you want. You can answer it versus the 76 you had in the first half. You can answer it versus the 89 you had in the second quarter, with or without the self insurance reserve. How would you look at the second half incremental EBITDA? The way you're laying the guidance out, it's going to be more of a rental rate driven second half than you even saw in the first half, which is usually a positive for EBITDA. So I'm just trying to get a feel of how you're looking at the profitability.

So you're right. Year-to-date our adjusted EBITDA margin – or excuse me, flow through – is about 76%. As we look at the second half, those are positive forces, better rate and the synergy's kicking in. We expect also that there will be solid underlying cost performance. So we feel very good about our ability to deliver flow through in the second half. When we guided in May, we said 70% plus. We're already on track to do better than that and we are hopeful that we'll do better yet. But without nailing the number too specifically, I'd just say it feels pretty good right now for being able to deliver flow through in the second half.

All right, well, if you won't give us the bogie versus the fixed first half of the 89% 2Q, is the premise accurate that – let's take it at face value that you feel you're raising rates, it's hurting utilization, it's your choice. And we could argue since it's your (AD) marketplace you're not seeing it. But basically if it's as you're saying, rates up, we get a little bit dinged on utilization, but look at what dropped to the bottom line. If you just changed the guidance to be more rate oriented and less utilization oriented, why was the earlier answer that your outlook on profitability is similar to a couple months ago. The premise would be that would be a better profit profile because it's more rate driven in the second half. You didn't change your CapEx because the size of the fleet is not going any differently than you thought.

Yes, no, it is more rate driven. I think the way I'd say it is that our view on profitability in dollar terms is about the same as it was back in May. But our view on flow through is higher.

Your next question comes from the line of Manish Somaiya – City.

Just a follow up on what Matt outlined, I think you mentioned that one of the weak markets that hurt utilization was Eastern Canada with some of the other markets being strong. But Matt, was that the only weakness in the quarter or were there other regions prone to weakness?

Specifically, it was really Ontario in Eastern Canada. There are other parts of Eastern Canada as a region. As Mike had stated earlier, all regions were up year-over-year. But Ontario was down and we probably ran a little bit heavy on assets there as they came out of the seasonality. We probably didn't recognize the softness quick enough, if I was going to be self critical. I would have moved a few million dollars out of there sooner. But as far as the growth over all the rest of the regions, we've seen a little bit of softness in the northeast, but softness is still high single digit to mid single digit growth on a year-over-year basis. It just doesn't keep up with the growth that we had there last year. That was our top geographic region in the whole organization last year. So that's what we're seeing but overall we're still seeing growth in all of our geographic regions. I don't know if that answers your question.

Just looking at Page 19 of the investor presentation, you talk about fleet mix and changes to them. Can you talk about lead times with OEMs as it pertains to earth moving, which his obviously a big focus item for you? And then where does pricing stand as far as buying new equipment?

So lead times in earth moving, Manish, are actually not too bad. We can access earth moving equipment that we might be interested in with pretty short lead times. And in fact, in some CAT classes there's stuff in inventory that we can have right off the bat. So in earth moving, not too bad; in some of the more popular other CAT classes, still some decent lead times. If you're looking for high capacity reach forklifts it's still a decent lead time to get some of those units. So all in all, it's a little better than it was in terms of lead times earlier in the year. But it depends on the CAT class that you're looking. And I'm sorry, I forgot the second part of your question.

Pricing.

Pricing is pretty god for us. As we said back in the May update, we've been rolling through looking at the RSC purchases or the purchases that we would do to support adding RSC to our business and we've been renegotiating the purchase agreements with the vendors for those purchases. And we've been realizing some nice price reductions in the range of 2% to 5% consistent with what we've said previously. So that's going pretty well for the purchases for 2012 and at the same time we're negotiating around our 2013 purchase plans and we feel good about how that has progressed so far. So the price environment still is pretty decent for us and we'll continue to drive a hard bargain as we always do.

Manish, if I could take the opportunity to expound on the answer I gave before, I'll correct what I didn't mention in our opening. As I say, we had 35 states that had double digit growth. I forgot to mention the provinces and Ontario was the only province where we did not have year-over-year growth. So similar to the comments I made earlier, our growth has been really broad-based.

Your next question comes from the line of (Nick Kopla – Thompson). (Nick Kopla: Is there anything you're willing to share with us on how utilization has trended to date in July?

So (Nick), I think the way I'd say it is that the trends that we saw in June continue in July. And I say it that way very specifically because I think in order to understand what's going on in the business you have to disaggregate utilization into the two pieces, right. OAC on rent, we're still seeing nice growth in OAC on rent in the numerator of that calculation here in July year-over-year. Seasonal build, we're getting a seasonal build. So that's continuing. We can come back and talk about some of the factors that are driving that. But we brought a ton of fleet in in the first half of the year. We brought a lot in and we brought it in very quickly. That was a drag on utilization as we got into the May-June timeframe. It continues to be a drag on utilization here in early July.

I would also point out that we are still going through the integration process where we've integrated 50 locations and we're going to ramp that up very quickly and as we go through this quarter most, if not all of them, behind us. (Nick Kopla: Then one follow-up question; the $50 million revenue synergy target, where is that coming from? What are the components there?

It'll be a combination of harmonizing contracts, getting everybody on the core system. There will be some cross selling, as we had mentioned about the trans power HVAC. The mix will be – have a higher flow through and that's why we had stated $50 million of incremental EBITDA somewhere from $60 million to $70 million range and you can guess why the flow through would be higher is because a lot of the synergies don’t have any additional cost related to them.

Your next question comes from the line of Philip Volpicelli – Deutsche Bank.

My question is with regard to debt and I’m just trying to figure out where the debt balance is at the end of the year. And you guys maintained guidance for $90 million to $140 million of free cash flow usage and that does not include the merger cost. Is the merger cost you're referring to the $90 million in the appendix? Or is it more than that?

So the cash portion of our merger-related costs for the year, the cash portion is going to be – bear with me one second here. I want to make sure I've got a useful number. It is those transaction costs that we've already paid, which is banker fees, lawyer fees and consultants but it's also the other transaction-related costs that are in process now such as the lease termination cost, severance cost for employees and so on. And I don't have within my reach right here and now the number that we have excluded but that would be the simplest way to kind of get you to a year-end debt balance.

Maybe I'll follow up with you.

I'll – yes, if you could follow up offline, I'd appreciate that.

And the second part of the question is as you look at the cash structure, clearly you've got high (inaudible) that are, I guess becoming callable and then your future. Is the thought process that you guys will try to keep your balance sheet – in other words, will you try to do smaller refinancing or will there be a larger refinancing at some point in the near future to kind of turn out a lot of the smaller pieces that are (inaudible)?

So we're looking at our alternatives basically every day to see which is the preferred route to go. You're right. Right now we don't have an immediate call available to us that – on any of the really high coupon issues that makes sense to exercise. I think the first call that we have available on our 10 and seven-eights issue comes up sometime like this time next year, if I remember correctly. And so that certainly will be a point at which we will make some kind of a decision. Until then, though, we'll continue to look at not just the high coupon but all of the components that are in debt to see if there's anything that makes sense to do right here and now. So far the answer has been now. But the one thing I would point out is that we will refinance our AR securitization facility over the course of the next couple of months, so that's something that we will get done. But in terms of the longer debt issues, we're going to continue to look at it on an ongoing basis and we'll let you know if we decide to do something.

And presumably the AR securitization can grow now that you've got all of RSC AR also (inaudible).

I'm sorry, say again.

Presumably the AR securitization can grow now that you've got all of RSC AR also (inaudible).

Yes, we'll look at upsizing it a little bit as we go through the refinance process.

Your next question comes from the line of Ted Grace – Susquehanna.

So I was just wondering if we could walk through the cadence of time utilization by month in the quarter and then kind of compare it to the monthly cadence of either CapEX spend or OEC additions and then also the store closures. And kind of what I'm curious to understand is just even if we just look at it optically how those would coincide, especially the store closures. You closed 6% of the fleet. In my mind I just think there's a transient kind of dilutive effect it has on time utilization because if you close a store then for some period of time equipment is in transit being absorbed by new stores. And I'm just trying to understand how that also may have contributed to the commentary you made, Michael, about just the timing of CapEx.

So I'll start it. So the cadence of time utilization through the quarter – I'll just give you the month, Ted – 66.3 in April and that was up four-tenths from the prior year, 67.7 in May, that was up one-tenth, and 68.2 in June, which was down eight-tenths from the prior year. And those are all Pro Forma numbers, Pro Forma numbers. So it's apples to apples in the period. And to compare that, most of the closures that we got done in the second quarter – there were 61 of them – happened in June. So it's always hard to kind of tie direct correlation between those activities but clearly if there was a distraction, June would have been the time that there was a distraction as a result of all the closures and personnel moves.

Yes, I was hoping that that's the trend we would have seen. And in terms of the OEC additions, could you just give a sense for how those kind of layered in across the month – across the quarter?

You mean the purchases and the …

Whatever's the easiest way to express it, whether it's CapEx or OEC addition.

Across the months, don't have it handy here.

We can follow up then.

Yes, they're showing it to me as we speak here. So in April, gross – those are all gross? April gross CapEx was $210 million; May was $179 million; and June was $120 million. Those are all Pro Forma, apples to apples with both companies included.

Then the second part of the utilization question, I was just curious to get your perspective on is it looked like there was a greater shift towards earth moving and trench and safety and other and away from (areals). And as we think about it, (areals) tend to have the highest time utilization, so there is a mix shift that clearly ends up being manifested in your reported time utilization. On Page 20, I know you show the time utilization in the second quarter. Could you either give us the year-ago comp or at least help us think about qualitatively what that impact or how that dynamic might have played out because, again, that would provide, again, optically a lower time utilization when, in fact, the numbers could have been better on an underlying basis.

That's a great question. And it's also a great observation that our fleet mix has changed dramatically and it's more in line with our longer-term objective, which is to expand the horizon on our earth moving and trench and other. And when you take a look at the Pro Forma fleet mix, we're not around 45% versus 49% (areal). And to your point, that will have some bearing on our time utilization.

So let's – I hate to do this on the fly – but maybe one of the things we can do is just to give you a comparable Pro Forma number for some of the figures that are on Slide 20. Let us look at updating the slide to include some comparable information so that you have a sense of where we're coming from on a Pro Forma basis.

This concludes the question-and-answer portion for today. I would now like to turn the call back to Mr. Michael Kneeland, Chief Executive Officer.

Well, thanks, Operator. I want to thank everyone for joining us today and on our next call we'll have a full quarter of combined results to share with you as opposed to as reported. In the meantime, you can always look at – look us up in (Granich) and please download our presentation from our website. If you have any questions that you'd like to put forward, please contact Fred Bratman and/or visit one of our locations. And with that, that concludes our remarks for today and I want to thank everyone.

Ladies and gentlemen, thank you, once again, for participating. This concludes the …