Good morning and welcome to the United Rental's Second Quarter 2017 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 risks 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 Company’s earnings release. For a 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, 2016, as well as 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 no 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 the Company’s earnings release, investor presentation in today’s call include references to free cash flow, adjusted EPS, EBITDA, and adjusted EBITDA, each of which is a non-GAAP term. Please refer to the back of the Company’s earnings release and Investor Presentation, to see the reconciliation from each non-GAAP financial measure to the most comparable GAAP financial measure. Speaking today for United Rentals is Michael Kneeland, Chief Executive Officer; William Plummer, Chief Financial Officer; and Matt Flannery, Chief Operating Officer. I would now turn the call over to Mr. Kneeland. Mr. Kneeland, you may begin.

Thanks, operator, and good morning, everyone and thanks for joining us on today's call. We would like to cover today starting with a strong second quarter. Our results reflects some of the best fundamentals we’ve seen in the years. Some of that external but a lot of it comes from executing well at the Company. I also want to talk about market demand, which has been stable at the high level. And we have some thoughts on how 2017 and 2018 will play out and then as the guidance that we gave an update last night. So let's start where we are today. Now I want to mention four metrics that are especially meaningful and then Bill will discuss them in detail for the quarter. Now, our metric is our volume, pro forma for NES volume in the second quarter was up 6.6% and we have a similar increase in the first quarter which points to a healthy marketplace. Rates another good story, we achieved positive rates trend across our business in the quarter with sequential improvements each month, and we're close to being positive on our rates year-over-year, but don't expect us to rest. rates will continue to be a major area of focus for us. Our employees understand how critical it is at this part of our strategy. Importantly, the gains around RATES, we also increased time utilization to a new record of 69.4%. This is the highest time utilization of any second quarter in our history. In fact, each month set a new record. And finally, our free cash flow. Through June stands at a robust $614 million, which is right on-track and that's after $968 million of growth CapEx spend. These are excellent metrics that show how effectively we are running the Company. Our people look…

Thanks Mike. And good morning to everyone. As Mike said, we got a lot of information this morning on the second quarter, a lot going on in the quarter. I'll try to give you normal color on the information that we usually report. We have also had lot of questions about NES and the impact there, so we will try and carve-out where we can information there that would give you sense of how NES is going for us. Let me start though as usual with rental revenue in the quarter $1,367 million was up and $163 million or 13.5% over last year. The components driving that were I will start with the ancillary revenue had a good quarter there with ancillaries adding $21 million over last year really driven by volume partly from NES, but just the raw volume of the more fleet on rent as well as the higher revenue from delivery and fuel associated with rentals. Re-rent was a positive too year-over-year, basically volume related there as well, but the bulk of that $163 million was the owned equipment revenue growth, within that $140 million from OER growth, $181 million contribution from volume, so really strong quarter in getting mostly on rent. RATES cost is about $13 million of decline year-over-year that from the 1.2% reported decline in rental rates versus last year. Our replacement CapEx inflation was $16 million in the quarter and then at left $12 million of unfavorability from mix and all other and there is a lot going on within the mix and other column this quarter, you will see that when we get through the bridge for EBITDA year-over-year, the addition of NES as well as other mixed factors like class and period mix. So those are all the key components to…

[Operator Instructions] Our first question comes from the line of Ross Gilardi from Merrill Lynch. Your question please.

Thanks good morning guys. This time last year you guys got a little bit of pricing for a couple of months and then it just sort of attracts seasonality for a while. What if anything is different this time and why?

Hey Ross this is Matt, it’s a fair question and one that we've asked ourselves to make sure that we maintain the momentum. I would say what is different is a couple of things. Number one and most important the demand environment and not just for us the work we're seeing in the industry, information that we're looking at looks like absorption continues to drive positive in the industry which is a good indicator. The other things is the record time utilization that we’re experiencing and then thirdly we have growth this year and we didn’t have this kind of growth and whether you want to use the stand alone or the pro forma number that that was not really the same story last year. So there is a lot of indicators as well as a strong end market macro environment that we feel should be very, very helpful to maintain momentum that we had versus last year.

Ross, I would only add that last year we were going through really still adjusting to the fleet and balance and we're in a much better place in the industry today.

Got it thanks guys and then just a follow-up, you guys have acquired NES and there seems to be a lot of midsize M&A happening, I mean does it feel like we're on the cost of a more substantial wave of consolidation in this space.

Ross you know I've already said that the consolidation would continue to play out inside of our industry it's very fragmented. I think it speaks more to people have strategies as we do and they all do as well. The market cycle, I think it speak volume that their belief the market cycle is still there. And I also sit back and say from a strategy point and from an industry point of view, having increased professional management, I think will overall be a benefit to the industry collectively.

Thanks Guys.

Thank you. Our next question comes from the line of David Raso from Evercore ISI. Your question please.

Good morning. It's been probably 2.5 to three years since you had at the same time year-over-year growth and utilization rate and CapEx, it looks like we're about to - we are on the cuts of getting back to that. Given done that since like 2013, 2014 and you're doing 60% incremental EBITDA margin. So as much as I appreciate pull this out pull that out, you say we're kind doing that right now. But still it is what it is, incremental right now or 30% to 40%, 50% that want to pull out the bonus accrual, but still the power of having those three things going the same direction into 2018, can you try to handicap for us how we should think about incremental EBITDA margins and why they want to be materially stronger?

Sure Ross, I think materially stronger obviously would be the result of all of those things going together throughout 2018 as you said and rate will be an important driver there, how much of the a rate improvement could we see in 2018 as that would be the critical question about how the flow through might transfer out. Look I mean the analysis that we did, there a lot of assumptions to it, so I don’t want to go too far with the specific about 50% statements that I made. But at the same time if we get rate to be mildly positive, if we continue to improve utilization, although that's big given the record nature of what we are doing now, but daily improve it just marginally and we are putting more growth capital into the business again that's an assumption not saying we are there yet. But all those things are lining up, 50% is I wouldn't say a given, but it's certainly the starting point of the discussion about where flow through could go next year. All of that of course need a market that will support all the assumptions that I just went through.

Yes I’m just trying to set up a base case, I mean to push back could be well back then you were getting a lot of rates in some utilizations that mix next year is probably hard to assume the same kind of rate growth that you had back then, but that said you also have some farther for cost improvement with NES and so forth. So not to ask you to give 2018 CapEx guidance right now, but can you help at least sort of frame how we should be thinking about growth CapEx or total CapEx however you want to describe it for 2018 just for base case.

Yes, David, it's still early for us to be thinking about that, we are talking about that, we are certainly thinking about it as we speak, but I would say that the momentum this year continues into late into the year, I think it's very reasonable to say that 1600 is the starting point for the discussion, all right and then we'll see where we go from there.

One last quick one then Bill, in the month of June alone, we're talking pro forma on rental rates, were there any regions or how many regions, what percent of the regions actually already positive on rates year-over-year, for just the month of June pro forma?

For the month of June pro forma year-over-year, I can quote the sequential, but the year-over-year in the month of June, looks like it's five of regions that were positive and four of the ones that were not positive, another three or four were reasonably close to the breakeven.

And remind us, you run the Company with how many regions exactly?

13

13

13

13, so, basically five out of 13 up a few more kind of flattish and other ones are still the drag. Okay, I appreciate it. thank you very much.

Next question comes in the line of Tim Thein of Citigroup.

Great, thank you. Just to follow on that last point, can you quantify within the sort of what the two drags as you called out there, I guess not a region comments per say, but just energy and I guess you find that the braches that are in those heavy oil and gas regions and then I don’t know if you can extend that to upstream. But if you kind a bucket energies as a broad kind of segment, and then just Canada as a whole. Just given the movement in the currency, I'm guessing, we shouldn't just use the difference between the 73 and 88 that you outlined. So maybe just help us in terms of those two drag that you called out. In terms of what they detracted from rates in the quarter?

Sure thanks and this is Matt. I'll answer the upstream conversation first. So as you can imagine, as we’ve seen land rig count continue to decline, our upstream businesses climb. So we were up 68% year-over-year in Q2. That brings us to just under 5% of our total portfolio. So to answer your other questions if you want to look at our total energy exposure, we have about 5% of our business in upstream. About a little less than 2% midstream and about 7% in the downstream business. So that that nets to a little under 12, technically 11.5% of what you would call energy exposure. And we're very, very comfortable at that level and we're encouraged to see the upstream and we've seen a lot of pickup in our pump business specifically in that sector as well as other verticals within the pump business. As far as Canada, our Canadian business is kind of tailored to cities, but all of the provinces actually had some growth. We're little bit more challenged in Alberta, when you look at the country as a whole, our rental revenue was up 7.3% and that’s almost 9% just under 9% volume, but still over 3% rate drag year-over-year on that business. But we feel really good about Eastern Canada and we feel that the other provinces in the Western Canada have bottomed out and some of the regions would follow a little bit. So we're encouraged by that.

Okay. And Matt, just can you remind us how quickly you would expect to re-price the NES book. And I'm guessing that a little shorter contract duration than maybe legacy URI. But can you just update us there in terms of the re-pricing opportunities with NES.

Yes, we're not really looking at it as just re-pricing NES. We look at our pricing, it makes us a little bit unique as far as in customer buckets geographies and products. And so we're not really parsing out the NES, there are some key accounts with NES that we will treat probably a little more gradually just as we would our key accounts business at United Rentals. But overall, we're looking at these customers blended, we're emerging our rate zones, we're harmonizing our pricing and we're merging a customer accounts. So it won't be long before we only and really be able to identify that and NES and United Rates. We have a rate strategy as a Company that stays from the segments we talked about and we're going to deploy that across the board.

I appreciated it. Thank you.

Thank you. Our next question come from the line of Joe O'Dea from Vertical Research. Your question please. Joe O’Dea: Hi good morning. First question just on the specialty side, and I appreciate that we're right on the heels of NES. But as you see in the headlines a little bit step up activity on the M&A front. Just what you are seeing on the landscape there in the 2018 plans. You had talked about back in December and that included some inorganic growth in specialty. And so maybe just kind of where you're seeing that environment right now?

Well first and foremost, we don't talk about the acquisition other than the fact that we do have a robust backlog things that we're looking at. With regards to specialty as a whole as you can see going from 2013 to Today in second quarter from 10% to 19% and the growth capital that we're putting in there along with the cold start. We have a very firm strategy of growing that business and we’re going to continue to fund it. I think it differentiates us in a different way and our customer is obviously are very open to it. But we're always looking both for market opportunity, we're looking at potential acquisitions and we’re also looking at different product mix that we could do within the specialty group. So it's all the above, but it's going to continue to grow. Joe O’Dea: Thanks. And then the in terms of just tone of the industry it looks like the survey results may be step down a little bit not sure if that’s just tying run up and then come back down. But and may be just kind of adjustment what we're seeing in a reported survey results and then in general kind of what you are hearing from customers and some other confidence that’s contributing to 2018 positively.

I would say we continue, whether it’s the customer index, whether it's any of macro data we looked at or whether its intelligence we gain on absorption of fleet and rate improvement in the industry, everything is pointing to a strong environment for the balance of the year and we see that playing into 2018. that’s the framework in which we’re making our business decisions and we really haven’t seen much to challenge that. There may be a pocket here and there by sector by vertical, but overall we’re very encouraged with the demand outlook for the future.

Yes, just to be clear, our customer index if you are referring to that it is strong, March was unusually strong and therefore it may look like it was dropping but fact that it is very strong. Joe O’Dea: Perfect. Thanks very much.

Thank you. Our next question comes from the line of Nicole DeBlase from Deutsche Bank. Your question please.

Good morning. So my first question is just around the revenue outlook and I know you guys are refraining from providing explicit rate guidance, totally understand that but is there any way you can kind of frame the way the back half plays out according to the low end and high end of your guidance with respect to like normal rate seasonality like this is a normal seasonal outcome, is it better, is it worst.

Nicole as you can imagine challenging when we don’t want to be explicit about rate and time guidance. What I would say is that we’re not making heroic assumptions about where rates goes in the back half of the year in that revenue guidance. Its well within the range of sequential that assume as well within what we've done historically and so we feel like we got a comfortable set of assumptions there, that’s about as far as I think we should go.

Okay no doubt that’s really helpful actually and then secondly just around the CapEx, the increase in the full-year guidance. And can you just talk a little bit about like equipment categories or you know priorities of spending for that new incremental bit of CapEx.

Yes Nicole this is Matt. I would say that it's going to be fairly consistent with what our fleet profile is, we’ll continue to put about 20% of that incremental capital into our specialty business and specialty will continue to grow a little bit faster than our Gen Ren, if you look at Q2 we think that will continue. When you look at the rest of the mix whether you’re trying to model whether it will more aerial or more dirt or more of the other, it will be across the board very similar to our fleet profile as a company.

Okay. Thanks, I’ll pass it on.

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

Good morning guys. Just going back to Tim's question first, is there any way to frame kind of what the starting point is here for the delta between URI's pricing and the NES pricing just so we understand kind of where you are starting yet and where NES prices could come up to? And also I would kind of tack on if there is an average length of NES contract.

Yes, Seth, it's challenging to think about of how to frame the impact beyond what we gave already, right. I think I recommended to somebody last night that if you sit down with a simple spread sheet and make some reasonable assumptions about what the share of business that NES contributes both this year and last year, you can frame out sort of in broad terms how to get to that four tens pro forma number and how that compares to the 1.2 as reported number. The actual assumptions that go into your spread sheet about sort of the relative rates of NES versus us, we’ve characterize broadly in the past as being double digits the difference, so that’s the starting point. Obviously with United Rentals being the premium and that gives you a sense of overtime how much of gap there is to bridge. How much that the gap we actually bridge and how quickly we actually bridge it, time will tell but that’s the feel that you are playing on sort of double digits kind of number that we are working to make sense for our customer base as you go forward.

Okay. That's helpful Bill, thanks. And then there has been a lot of discussion around the industry about mix, right and big industrial contracts and what not can you talk about the competitive rate environment specifically going after these larger, bigger and longer term industrial contracts what that looks like today?

Sure Seth, this is Matt, I mean it's depending on what markets you are in and what customer you are going after and the volume, these are always competitive. The good news is they don’t go out for bid regularly and we have been incumbent in many of these and that's gives us a lot of credibility. So we are comfortable with our positioning, it doesn’t mean that we should never take any of it for granted, and this business will always have somebody wanting it and that's part of being leader in the industry. There is always someone that wants what you have that's something new for us, it’s something that we very comfortable with and I wouldn’t call it out any more or less competitive in whether this is a national account sector or whether you are fighting to get more share in an MSA. So we feel comfortable with the level of competitiveness, we're encouraged by the level of responsibility from an absorption and rate improvement that we see in the industry as well.

Yes, the only thing I would add to that is the harness is on us to make sure a value proposition is such that we meet or exceed our customer expectations and that's why when you talk about our specialty, you talk about the capital that we’re spending, you talk about the digital and things that we're doing for total control, finding ways to assist our customer to be more of a partner and finding ways to drive productivity and safety. That's what we need to do and that's what we need to keep focused on and we're very good at that and our team is really focused on it.

Okay, all right. Thank you very much guys. Appreciate it.

Thank you. Our next question comes from the line of Jerry Revich from Goldman Sachs. Your question please.

Hi good morning everyone. I wondered if you folks can talked about how you are thinking about adding capital into the oil and gas impacted regions obviously big swings in the town and how is your risk appetite and capital deployment in those areas, can you just as we are clearly ramping up short-term here.

So Jerry, much of our growth has really come from absorption. As we had talked about in the past and probably the biggest example of it is our pump business. We made the decision a couple of years ago to hold on to some assets that we knew had a lot of life left in it. We mothball them, and we we're really getting the benefit of that decision today, when you see the type of growth that we're getting in that pump business. And those are types of decisions we made overall. We didn't expect to run 80% time use in the oil and gas markets. So when anymore accurate terms, so if we were willing to leave our footprint there, these feet enough to keep some capacity there, it gave us the opportunity to respond for this growth. And I think that's where we are today. We aren't having to dump a lot of fleet in there to drive that growth. And it feels good a little bit self congratulations here admittedly, but it feels good to have put in that faith and commitments and to be able to benefit from it.

So that said, we learned lesson last time right and so we want to be mindful of how much of the business that oil and gas upstream activity represents and make sure that we're making a more balanced decision and more conscious decision this time around then last time it was just hey it's go, let's go. Nobody says that out loud but that was sort of the mindset. This time around we're saying okay, let's make sure that when we're putting fleet in it make sense both for right here now and what it means for this longer term.

Okay, thank you. And on that note I'm wondering if you could just frame the CapEx growth that you folks are laying out here over the balance of the year. Can you just give us a regional flavor which regions are getting an outside share of fleet growth. In other words where you folks seeing the strong growth?

It's very broad. I know we say that a lot, but that's because it's factual. When you look at it where maybe it's been a little more gated to the coast, but because they have been so hot. But it is very dry, its across the board. The folks in western Canada are probably getting the least of it for obvious reasons, because they has some fleet absorb. But everybody else is running real strong utilizations and really improvement throughout P&L and have earned that growth. And that's how we look at it. But you have to earn the growth and then we allocate it. the team has done good job very broadly.

Okay. Thank you.

Thank you. Our next question comes from the line of Nick Coppola from Thompson Research Group. Your question please.

Good morning. So I wanted to follow-up on the NES integration. Now you are three months in, it sounds like it's going well and you are on-track your synergy targets. Has there been any surprises to the positive or negative, any color you would add surrounding the integration?

Well I would say the positive is we had tendency to link towards speed when it comes integration it's our firm belief that you move that way and you get the benefit of it, I would say this is even faster than we expected. And that's what makes it difficult while Bill had to go through so many assumptions to give you NES standalone information, we view that as a very positive story operating as one company. Another is the timing improvement, if you looked at the slide - you saw that the right panel of that slide, you saw that NES came in a little bit heavy on fleet a little bit lower time utilization. Part of our improvement is that we’ve really ramped up that time utilization by absorbing that fleet quickly as a combined entity and it just go to approve that if you get everybody working together quickly, you can take advantage of all the capital that you have as a new combined team and that was probably even ahead of schedule of what we thought.

Yes, that’s certainly a strong chart there and then I guess just another question, I wanted to ask about there is another slide about Project XL moving more to infrastructure and can you just may be add some detail around how you are moving forward with that goal or the new equipment types or mix shift that we should be expecting or is it really just more of a sales initiative of reaching out to new contractor types, may be just kind explain on that.

Sure Nick, it really is a focus on that key customer segment that project type and making sure that we're well positioned to identify the opportunities and that we’ve got the fleet to support those opportunities when we win them. So it's more of an adjusting new sales initiatives, but there is very much a focus that we're bringing to infrastructure projects now that we hadn’t in the past. You can see in that XL slide, the impact when you it compare to sort of overall aggregate infrastructure spending in the economy, we're out performing. So that’s the good news and we want to make sure that we continue to drive that focus because it’s a vertical where we think we line up very well with those kind of projects, those kind of customers. And don’t believe we were getting our fair share in the infrastructure space previously and we're driving hard to address that.

Okay. Perfect, thanks for taking the questions.

Thank you. Our next question comes from the line of Steven Fisher from UBS. Your question please.

Thanks, good morning. As you guys step back and think about the market today, how would you characterize the supply demand balance within rental and where do you see that balance headed in the next few quarters as you think about the demand trends versus industry CapEx addition. I mean would you say that it is actually kind of tight today in some of these markets, where you are getting pricing or is it just more kind of your own initiatives or are we headed toward a position of kind of a tight market per say.

Steve its Matt, there are certainly initiatives right and coming out of the first quarter just like we did last year it's your time to take advantages of what the market can give you as far as your focus on time and rate. So the demand has to be there, but with that being said, we feel that this is it's not just broad base for us, we expect the industry is doing a better job of being very rigorous on capital management and returns and I think that we're seeing that play through. And there is no sign that we would expect that to diminish and everybody that we talk to whether it's OEM, whether its customers, everybody is feeling better about the industry demand and the industry behavior. I think that’s the most fair way to categorize that.

Okay I guess a related question just thinking about the strong time utilization, really just trying to gauge how much structural change you have made in driving efficiency and fleet utilization. I’m just curious how many points of time utilization do you think you have maybe added over the last year that are results of better processes and less OEC not available for rent you know that time utilization that may be sticky overtime.

Yes, I think it's great point and its one of the reasons why we felt good about the NES acquisition because that density of fleet in the market gives you the opportunity to drive higher time utilization and we do think we are enjoying that and when you think about where that midst of our fleet has come and you look at our year-over-year time utilization, we continue to mix in assets specifically in specialty that run usually lower time, in some instance significantly lower time, yet we keep climbing. So, you have to look at it by category to truly break down the advantage, but we're pleased about the time utilization a trend that we've created on a year-over-year basis and how that comps to the industry. We feel strongly that's due to our density, allows us to do things that may be a regional or a local player can't do from time utilization prospect.

But thanks for recognizing the fact that we are putting an effort and changing our processes, there is a chart on our investor deck on page eight that shows the NES during the time of acquisition where it is today, and speaks volumes about our team stepping up and making sure that we leverage our capabilities to drive better time. The question we have to ask ourselves is, is there more for us to pull and we do believe that as Mat mentioned earlier, our team has earned it and we want to continue to make sure that we meet that demand, but there is lot of things that we're working on and as you pointed out our processes and lean management is paying some dividend.

Would that be as much as maybe a couple of points of utilization?

It's hard to quantify exactly, because there are so many things that we were doing inside the organization.

Okay. Thanks a lot.

Thank you.

Thank you and this does conclude the question-and-answer session of today's program. I would like to hand the program back to Mr. Michael Kneeland for any further remarks.

Well thanks operator and I want to thank everybody for joining us on the call this morning. As always, we're available to continue the dialogue, we'll have more insights for you in 90 days, so in the meantime please feel free to reach out to Ted Grace, our Head of IR anytime. So I think this wraps it up for the day and we will see you at the end of the quarter. Have a great day. Thank you.

Thank you ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.