The paragraph is an introduction to United Rentals' investor conference call. It informs listeners that the call is being recorded and contains forward-looking statements, noting that actual results may vary due to risks and uncertainties. The company refers participants to its SEC filings for more details on these risks. The call will discuss non-GAAP financial terms, and participants can find reconciliations to GAAP measures in recent presentations. Finally, the call features remarks from Matt Flannery, President and CEO, and Ted Grace, CFO, with Matt Flannery beginning the discussion on the company's 2024 projections meeting expectations.

The paragraph highlights the company's successful third-quarter results, showing continued growth in construction and industrial markets. It notes a revenue increase of 6% year-over-year to nearly $4 billion, with rental revenue rising over 7% to $3.5 billion—both record figures. Fleet productivity improved by 3.5%, reflecting capital efficiency and industry discipline. Adjusted EBITDA reached a third-quarter record of $1.9 billion, with a margin of nearly 48%, and adjusted EPS grew to $11.80. The company experienced growth in general rental and specialty businesses, with specialty rental revenue up 24% year-over-year, or 15% excluding benefits from the Yak acquisition. The focus on customer service and innovation supports their goals in safety, productivity, and sustainability, creating strong shareholder value.

In the third quarter, the company experienced growth driven by cross-selling efforts and added 15 cold starts, bringing the total to 57 for the year. Growth was notable in construction, especially non-residential, and industrial sectors, with strong manufacturing activity. The company initiated various new projects in diverse industries. The used market stayed robust with record third-quarter OEC sales. Capital expenditures reached $1.3 billion to replenish and expand the fleet. Year-to-date free cash flow surpassed $1.2 billion, aligning with the full-year goal of a mid-teen free cash flow margin. With a strong balance sheet, the company returned nearly $500 million to shareholders in the quarter and plans to return nearly $2 billion by year-end. The focus remains on achieving record revenue, adjusted EBITDA, and earnings for 2024, with guidance maintaining midpoints for key metrics.

The paragraph highlights the company's positive outlook for 2025, driven by strong momentum and growth opportunities. They're investing in operations and innovative technology, such as next-generation telematics and the ProBox OnDemand tool tracking system, to enhance customer operations and reduce worksite loss. Their culture values innovation, continuous improvement, and community support, as demonstrated by their swift response to hurricanes. The company remains committed to strong customer partnerships and will discuss 2025 growth plans in January.

The company has achieved record third-quarter results in terms of total revenue, rental revenue, EBITDA, and EPS, surpassing expectations. They continue to show confidence in their growth and profitability, with strong free cash flow and a focus on smart capital allocation to maximize shareholder value. Rental revenue grew by 7.4% year-on-year due to large projects and key verticals, with improvements in fleet size and productivity. Ancillary and re-rent revenues increased by 15%, driven by the specialty businesses. The company also set a record in fleet sales, generating $321 million, with high adjusted margins and recovery rates despite the normalization of used pricing. The average age of the fleet sold increased to 95 months, which affected recovery rates.

In the third quarter, adjusted EBITDA reached a record $1.9 billion, a 2.9% increase, despite a $43 million negative impact from used sales due to market normalization. Rental contributed $132 million, while SG&A grew by $49 million due to business expansion and discrete items. Adjusted EBITDA margin was 47.7%, with margin impact due to investments and cost variability. Excluding used sales, margin decline was a percentage point and incrementals improved significantly. Adjusted earnings per share hit a record $11.80. Gross rental capex was $1.3 billion as expected, and year-to-date free cash flow exceeded $1.2 billion. The balance sheet remains robust with a net leverage of 1.8x and $2.9 billion in liquidity, despite returning over $1.4 billion to shareholders through dividends and share repurchases, reducing share count by 1.7 million.

The paragraph discusses the company's updated financial guidance, reflecting confidence in a strong year of results. They are maintaining midpoint estimates for all metrics and narrowing the ranges for total revenue ($15.1 to $15.3 billion), adjusted EBITDA ($7.115 to $7.215 billion), gross capex ($3.55 to $3.75 billion), and net capex ($2.05 to $2.25 billion). Used sale revenue remains roughly $1.5 billion, with expected proceeds of around $2.6 billion. The company plans to return a record $1.9 billion to shareholders, equating to about $30 per share with a capital yield of 3.6%. The section concludes with a shift to a Q&A session, where David Raso from Evercore ISI asks about growth expectations for 2025 in terms of specialty versus general rent growth and fleet productivity. Matthew Flannery responds that they are still in the planning phase and cannot provide specific growth figures yet.

The paragraph discusses the company's strategy for managing its fleet and driving growth. There is confidence in the demand pipeline for large projects, although local market conditions remain uncertain. The company is optimistic about interest rates stabilizing, which could boost customer confidence. The focus is on achieving higher revenue growth compared to fleet growth by enhancing fleet productivity. Specialty segments have shown consistent growth over the years, and this trend is expected to continue, driven by large infrastructure projects. The company plans to discuss growth and capital expenditure strategies in January, after completing their planning process. The strength of the balance sheet and cash flow is also highlighted.

In the paragraph, Matthew Flannery discusses the company's satisfaction with their acquisition of General Finance and their progress in expanding their mobile modular business. He emphasizes that their focus is on being the biggest provider to their customers rather than being the largest in the overall market. He also addresses their approach to mergers and acquisitions (M&A), highlighting their strategy of integrating and cross-selling with high standards for strategic, cultural, and financial fit. Flannery mentions their ongoing evaluation of M&A opportunities and promises to share relevant news when available. The discussion then transitions to a question from Michael Feniger of Bank of America about the company's outlook for 2025.

In the paragraph, Matthew Flannery discusses the ability to maintain price rates even if equipment pricing softens in a deflationary environment, emphasizing the importance of providing value to customers and offsetting inflation. Despite potential stagnation or decrease in equipment prices, the need to drive rates persists due to past inflation impacts and ongoing cost increases, including employee raises. Flannery expresses confidence in the industry's discipline and value creation for customers, which supports the ability to raise prices. Additionally, he highlights that their fleet's average age is around 50 months, the lowest since pre-COVID, and he feels confident about the fleet's readiness for growth, considering recent acquisitions and changes in asset mix.

The paragraph discusses a conversation between Tim Thein from Raymond James and Matthew Flannery about fleet productivity expectations for the year. Matthew Flannery expresses satisfaction with the company's current time utilization levels, which have returned to better than pre-COVID levels, similar to 2019. He highlights the positive impact of rates on fleet productivity and notes that time utilization is stable, which is an achievement. The mix component is described as variable due to numerous monthly transactions, and it includes inflation costs for fleet purchases. Despite higher inflation costs of 2.5 to 3%, compared to an expected 1.5%, the team has managed to maintain productivity levels, which pleases Flannery. Tim Thein inquires about future fleet inflation dynamics, suggesting it will remain a headwind in 2025.

In this segment of a discussion, Matthew Flannery and Tim Thein talk about future capital expenditures and fleet management. Flannery suggests that while they haven't completed their budgeting for 2025, he anticipates maintaining a similar pace of fleet integration as in previous years. He notes that the supply chain is nearly fully restored, which should allow for a return to normal operations. Tim Thein acknowledges this, and the conversation shifts to an unknown analyst from Goldman Sachs, who inquires about managing soft demand in local markets, although part of their question is inaudible.

In the paragraph, an unknown analyst inquires about the geographic movement of fleet due to soft demand in certain local markets, to which Matthew Flannery responds by explaining that their dense network in the U.S. and Canada allows them to optimize productivity without incurring high costs, as they only need to move assets within districts rather than across the country. The analyst also asks about specialty growth areas, and Flannery notes that power is a strong region, with growth seen across all segments of specialty. He explains that growth rates vary because some segments are less mature and building from smaller bases. Robert Wertheimer from Melius Research is introduced for the next question.

The paragraph discusses the company's ongoing investments in technology, particularly in areas like AI and advanced telematics, to enhance efficiency and customer experience. Ted Grace highlights that these investments are more prominent this year, despite slower revenue growth in single digits compared to previous years. The focus on technology aligns with the company's strategy to improve operational efficiency and margins, although specific dimensions of these investments are not detailed. The context includes current market conditions affecting the flow-through and margin performance expected in 2024. Additionally, there are exciting developments in fleet management with promising returns on investment.

The paragraph discusses the process of implementing new technologies and initiatives within a business, including proof of concepts, pilots, and change management. It mentions the need to clean and restructure data to effectively use new models, which has been a focus over the past year. The discussion highlights the variability in returns from different projects and the decision not to pursue less promising ones. Matthew Flannery emphasizes that the company is not focused solely on immediate financial metrics but is committed to long-term investments despite slower growth. Robert Wertheimer and Jamie Cook pose questions about potential improvements in profit and margins, indicating ongoing interest in financial outcomes.

The paragraph features a discussion between Ted Grace and Jamie Cook regarding the company's financial outlook and strategic investments. Ted Grace emphasizes the uncertainty of achieving the targeted 50% incremental margin by 2025 until more guidance is shared in January. He acknowledges growth, technology investments, and cost management as key factors. Cold starts present a challenge due to initial costs without immediate revenue, with 57 cold starts surpassing 2023 numbers. Overall, the company is satisfied with 2024's performance. Following this, Ken Newman inquires about demand stabilization in local accounts, noting Matt Flannery's more optimistic tone.

In the paragraph, Matthew Flannery discusses the outlook for demand stability between the third and fourth quarters, expressing optimism based on customer confidence and the stabilization of interest rates. Although there is uncertainty about when sentiment will translate into actionable projects, he highlights the company's flexible business model that allows for quick adaptation to market conditions. He emphasizes that while they can't quantitatively predict revenue impacts from interest rate cuts, positive feedback from customers fuels their optimism. Ken Newman then asks Ted Grace about the impact of disaster recovery and hurricanes on margin improvements for the fourth quarter. Ted Grace responds by stating that there have been no changes to their financial guidance due to these events.

In the paragraph, Matthew Flannery discusses the minimal impact of recent storms on their business, emphasizing that while they are committed to helping affected communities, the overall financial impact is not significant. He anticipates that any major rebuilding would be more of a 2025 event. Additionally, Flannery addresses industrial end markets, noting strong manufacturing performance but challenges in the petrochemical sector, particularly with upstream investment linked to the U.S. land rig count. He also mentions declines in refining and chemical processing this year, attributing these to timing issues despite strong demand for gasoline, diesel, and jet fuel. Kyle Menges inquires about potential improvements in industrial markets, particularly in areas like industrial maintenance, repair, and operations (MRO), which have been weak this year.

The paragraph discusses the current state and future outlook of refinery and chemical processing work, which appears to be postponed to maximize current profit margins. Meanwhile, the industrial manufacturing sector remains strong. In a conversation between Kyle Menges and Matthew Flannery, they discuss the positive impact of revenue from ancillary services and re-rents, largely driven by specialty services, noting a 15% increase in a recent quarter. While this growth is partly due to Yak's contribution, future growth will depend on the growth in specialty services. Angel Castillo from Morgan Stanley seeks more details on discrete investments being made, particularly in sourcing.

The paragraph discusses the company's approach to managing their equipment fleet and sourcing. Ted Grace explains that they use technology and data analytics to optimize fleet movement, improve customer experience, and reduce costs, emphasizing predictive analytics to forecast fleet needs. Internally, they focus on efficient fleet management rather than just acquisition. Matthew Flannery adds that their business model relies on asset fungibility, avoiding niche equipment for specific projects, and therefore, they don't foresee major changes in their equipment needs based on project size.

The paragraph discusses the flexibility of moving assets between different verticals to maintain resiliency across various markets, such as oil and gas versus infrastructure. It touches on new equipment prices and supply, with satisfaction expressed towards vendors for stabilizing disrupted supply chains. Although specific pricing details aren't shared publicly, the speaker is confident in the vendor relationships and the acknowledgment of past price increases. The industry has matured in maintaining discipline with rental rates, adjusting for inflation rather than continuously absorbing increased costs.

The paragraph is a conversation between Angel Castillo, Neil Tyler, and Matthew Flannery during a conference call. Castillo finds the commentary about the value and reliability of rental channels helpful. Tyler then inquires about the strategy and planning for "cold starts" or the opening of new branches, specifically in the specialty segment, and their long-term growth outlook. Flannery responds by explaining that they don't set multi-year goals for these openings. Instead, they engage in annual planning to decide where to allocate resources for new openings and organic growth, with communications about these plans typically made in January.

The paragraph discusses the company's ongoing opportunities for growth, particularly in specialty products and power. It mentions the potential for deeper geographic penetration and new product lines, including Reliable onsite business, the Yak acquisition, and mobile storage under the General Finance team. The company sees significant growth potential, especially in more mature areas like power, driven by increased market penetration rather than new market entry. They have built a strong value proposition for large projects and customers across the U.S. and Canada. Matthew Flannery highlights the growth potential in the power HVAC sector and notes the addition of new products contributing to this expansion. Neil Tyler raises a question about the impact on margins, and Flannery explains that the power sector, as a whole, is experiencing growth, benefiting both the company and the industry.

The paragraph features a conversation during a business call, highlighting the company's strategic focus on expanding its product offerings both to existing customers and new market verticals, particularly in the HVAC sector. Neil Tyler thanks Matthew Flannery for his update, but the call faces a brief interruption as Stephen Volkmann from Jefferies seems to have connectivity issues. Scott Schneeberger from Oppenheimer then asks about the company's merger and acquisition (M&A) strategy, specifically regarding the mix between general and specialty rental acquisitions. He seeks clarification on how these decisions are influenced by factors such as cultural and financial fit, and asks for elaboration on a previous comment about not prioritizing being number one in the specialty category.

The paragraph discusses the company's approach to mergers and acquisitions (M&A) prioritization, emphasizing the importance of adding customer value through new product offerings, particularly in specialty and general rental (gen rent) areas. Matthew Flannery highlights their strategy to integrate new platforms into their strong network, similar to past integrations like Yak and General Finance. He mentions the goal of increasing capacity and market presence, aiming to be number one with their customers, but not necessarily dominating in every niche market. An example is given with Reliable Onsite Services, focusing on comprehensive support for major projects rather than ubiquitous market presence.

The speaker emphasizes their aim to be the leader in providing specific products like modular buildings and storage containers, rather than dominating every product category. Ted Grace mentions that Yak contributed significantly to new sales figures, which increased by 48%, though it would be around 15% without Yak's influence. Scott Schneeberger expresses appreciation for this insight. The call concludes with Matthew Flannery thanking participants and directing them to their Q3 investor deck for updates, and noting that Elizabeth is available for questions. They anticipate speaking again in January, wishing everyone a safe holiday season.

This summary was generated with AI and may contain some inaccuracies.