Good morning, and welcome to the United Rentals’ Second Quarter 2014 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 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, 2013 as well as to 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 and today’s call include references to free cash flow, adjusted EPS, EBITDA and adjusted EBITDA, each of which is a 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 begin.

Well, thanks operator and good morning everyone and welcome. And I want to thank everybody for joining us on today’s call. In January, we laid out our plan for a year of profitable growth and a steady market recovery. We spoke about a balanced capital allocation program that supported both organic growth and acquisitions, the diversification of our services and our focus on return on capital. We set full year goalposts and anticipated well over $5 billion of revenue and more than $2.5 billion of adjusted EBITDA and significant cash flow generation. Last night, we confirmed that we expect to meet or exceed every one of our goalpost by year end. Halfway to the year, our plan has become a profitable reality for the second straight quarter. We deployed over $1 billion of rental CapEx to-date and realized double-digit revenue growth on our fleet. We added an important new component to our specialty range with our acquisition of National Pump and we are well into our plan on cold start openings. And we are executing a market strategy that leverages our broader service offering as well as our scale. As a result we reported another quarter of significant higher volume on a much larger fleet with no erosion of time utilization. And more importantly better rates. Our adjusted EBITDA was the second quarter record for our company. And we revised our EBITDA guidance upward to a range of $2.65 billion to $2.7 billion for the full year. Another one of our key metrics return on invested capital, showed real progress in the quarter, ROIC increased over 8% for the first time in our history and this has positive implications for our free cash flow. And last night you saw us raise our full year guidance for this range. These are…

Thanks, Mike and good morning to everyone. I will center my comments around bridging our rental revenue performance for the quarter, our EBITDA performance for the quarter and then updating the outlook and along the way we will throw in hopefully some useful information about couple of other items. So, starting with our look at revenue performance, rental revenue in the quarter was up 16.8%, so very robust performance. Obviously, that was aided by the addition of the acquisitions in the quarter, but still when you exclude the acquisitions, pretty robust rental revenue result for us in the quarter. So, 16.8% rental revenue growth, that’s $170 million of year-over-year rental revenue growth. Within rent revenue, re-rent and ancillary items accounted for 0.7% of that 16.8% growth. Ancillary in particular had a robust quarter for us. Ancillary revenue was up $24 million year-over-year within that 0.7%. Re-rent was up about $5 million, so $29 million improvement year-over-year from those two items. When you look at the owned equipment revenue growth that 16.1% that remains, it was driven by rental rate performance and that was up 4.9% in the quarter that was worth about $43 million of the year-over-year increase. Volume growth was very robust at 10.3% volume growth. This year, that’s worth about $90 million of the year-over-year revenue and again that includes the acquisition of the acquired entities this quarter, but even if you strip out the National Pump acquisition, that volume growth was still pretty impressive at 7.6% ex-pump. So a nice volume quarter for us. We have been breaking out fleet inflation and the impact of that year-over-year on revenue and that this year was about 1.7 percentage points negative headwind, which resulted in about $15 million deduct from year-over-year rental revenue and probably the best way to…

Thank you, sir. (Operator Instructions) And our first question comes from Seth Weber from RBC Capital Markets. Your line is open. Please go ahead, sir.

Hey, good morning everybody.

Good morning, Seth

Good morning

Wanted to focus a little bit on the specialty business if we could, in the press release where you are talking about the National Pump deal, you cite that purchase price of $853 versus the $780 at the time of the announcement. So, I assume that reflects confidence or line of sight to the earn-outs. Can you talk about, I mean, you said you are running ahead of plan, so should we assume that you are going to hit that first earn-out in 12 months?

Seth, it’s in the Q if you look at it, the $853 is comprised of $777 I think it is of cash consideration. It excludes the stock component of the purchase. And then the remainder is the contingent consideration, it’s the earn-out. It’s the way that we have to account for the earn-out. So, that $76 million is an expected weighted average of the earn-out that we expect to pay discounted back to present value. Did that help?

Yes, thank you. Okay. And is it possible to parse out how much of the upside on the rate increase goes to the 4.9 in the quarter? How much did the pump acquisition contribute to the strength in rate in the quarter? Is it possible to split that out? You kind of qualified it for their ROIC, I am wondering, if you could do that for rate?

There is no impact of rate from pump. Remember, the ARA standard calculation you used the prior year weighting for the various classes and we didn’t have pump last year, so its weighting was zero in the rate calculation.

Okay. And then just sticking on the specialty business, last quarter you talked about specialty getting about $240 million of the growth CapEx, I think it was a $560 million number, has that – has your thoughts around how much capital you are committing to the specialty business changed at all, you obviously didn’t change your full CapEx number this year, but I am just wondering if you are committing more capital to the specialty business than you previously thought?

Yes, this is Matt. We are absolutely continuing to fund that business. And we were even exclusive of the pump acquisition, but we will continue to fund that business and we feel we can do that without having to raise our overall capital anymore than the guidance that we changed earlier in the year when we announced the acquisition.

But is it still in that $240 millionish range or is it going to – I am trying to understand what percentage of the pie it’s getting?

So, it’s still in that range this year, because we don’t have to fund as many cold starts in the power business that we did last year. If you recall we started a lot of power cold starts last year and not as many this year. So, it will still be in that range, but we expect as we go forward, we will – that range could increase. We are hoping it will increase actually.

Okay. And with the increased free cash flow guidance for this year, does that I must truly assume that your M&A could pickup or how do you envision spending that extra capital?

Well, this is Mike, Seth. I think that we are always going to be on the horizon looking as I stated in my opening comments, specialty is the cornerstone for our strategy right now. We will look and we just did the Blue-Stream, but just as I said this more than once that the bar is pretty high to get over the hurdle for us to think about it. We pass on more than we go deep in. That being said, I think our cash flow will be used right here now as to kind of pay down our debt at this point.

Okay, thank you very much guys.

Yes, thank you.

Thanks.

Thank you. (Operator Instructions) And our next question comes from David Raso from ISI Group. Your line is open. Please go ahead.

Good morning. The free cash flow target we used to speak of the $1.5 billion from 2013 and 2015, is that still a number we should think about as a target for the three years?

Yes. Hey, David. Yes, we continue to think about that same number. Obviously, we are enhancing our chances of getting there as we raise our outlook for free cash flow this year and we will continue to work hard to hit that number and do even better if we can.

It implies then free cash flow for ‘15 as north of $650 million and even if you do payout the earn-out to the full $125 million, you have finished the last $50 million for repo. It’s going to leave your net debt at the end of ‘15 probably at or below the low end of your leverage ratio to 2.5 to 3.5 that you target. So, I was just curious if you can maybe give us some insight on where are you targeting ending ‘15 leverage? Is that math right there really tells you unless EBITDA is wildly off from when you think it would be, you are going to be below the low end of your leverage?

So, all we have said so far, David is that we will be toward the low end of that range without giving out any new guidance for 2015 I think I will stick to that. But I would just add we feel very comfortable about all of the comments that we have made about ‘15, including the contribution ‘15 makes to the $1.5 billion three-year cash flow, including the leverage being in the area of that the low end of that range. And so I won’t go any further there right now. As the year plays out and as we get ourselves prepped for our Investor Day, maybe we can say more as we get later in the year.

Well, I guess that’s the related question then. Is there anything we should start thinking about the message for the December 4 meeting? There is a couple of milestones people are trying to think about, obviously at this level is there a stock split thought process, is the entry into the S&P 500 isn’t really up to you, but you would think that’s something that could be out there that’s obviously potentially could happen, obviously some of the leverage numbers I was talking about for next year. I mean, there are some things we should be thinking about already as a framework for the message on December 4?

Okay. Five months in advance, he wants the message already. I would say stay tuned. We’ll develop those thoughts as we go. Mike, I am sorry.

Yes. So, David, we are still concentrating on this year and we will frame up our discussion points for the September meeting. You raised one there is other investors who are asking other questions as well. So, we will try to make sure that we can – we will try to answer as many as we possibly can as long as we get closer. As you know in December, we will have our understanding of what the 2015 will look from the roll up of our budget, so it will be an appropriate time in early December to have that discussion.

Okay, I appreciate it. Thank you.

Well, thank you.

Thanks, David.

Thank you. And our next question comes from Scott Schneeberger from Oppenheimer. Your line is open. Please go ahead sir.

Hey, Scott.

Thanks Good morning guys. Hey, one question but a couple of parts in it, I will ask it all upfront. Can you address how rental rate growth will flow over second half just a bridge the 4.5% rate guidance for the year and then the follow-ons to that are how you are thinking about rental rates long-term just with a strong year again this year with specialty. National Pump mix team and more specialty to come, what’s the long-term view on that? And then lastly just kind of still on the rate theme, what the competitive environment feels like out there. It sounds like you guys are being good leaders, but just any anecdote there. Thanks. I will cut it there. Thank you very much.

Thanks, Scott. So, I will start with the near-term and what gave us the confidence to set a target 4.5 for ourselves for the balance of the year. If you think about that sequentially and what we would have to do, we will have to do 0.5 sequentially for the base – for the balance of our peak season, so July through October, 0.5 and then flatten out to down in November and December, that delivers a 4.5 result for the year. So, it’s not a slam dunk so to speak, but we feel confident that’s why we raised that guidance. As far as long-term, we hadn’t put a long-term target out there yet. I will let Bill speak to it some.

Sure. But just add on to the short-term statement, so if we did that 0.5 through October Scott that would put our year-over-year third quarter rental rate performance in the high-4s and not quite 5% but in the high-4s. And that would put the fourth quarter year-over-year in the lower half of the 4s. So hopefully that gives you a little bit better sense as the second half gains year-over-year rate. For the longer term I think we have talked for a little while now that we continue to see rates over the long-term trending down from the year-over-year growth rates that they have been achieving recently, down to something that looks like 3% a year sort of a steady state. That’s the way we think about our long-term forecasting. I am not saying that we will get that 3% next year, if we finish this year at 4.5 say that will be pretty good momentum carrying into next year and maybe do a little bit better than 3% next year everything else holding – the macro holding in the kind of growth rate that we are experiencing right now. But as we think about ’16, ’17, ’18 something like 3% we think makes a lot of sense as a modeling assumption. And obviously the macro can swamp that for the better or for the worst, but that’s how we think about the long-term.

I would only add Scott that as far as the competition, I think everyone is being good stewards and marching forward. When you take a look at the Rouse report we have a bandwidth in which are leading the charge. What that band seems to be consistent by all of the report month to months which tells you that as we are growing our rate, the industry is growing our rate as well. And then I think everyone else who is public has been reporting positive number. So I think from our perspective that’s how the industry has been reacting. I will also say that it’s necessary because inflation kicks in prices go up and we have to earn over our cost of capital as an industry. So I think it will continue that trend. And to Bill’s point the macro environment will be one of the ones that we will be able to monitor and judge the rate improvement. But I am also pointing out one last point that is we are always as a company strive to maximize our return and also on our rates. Scott Schneeberger – Oppenheimer: Great. Thanks guys.

Thanks Scott.

Thank you. And our next question comes from Steven Fisher from UBS. Your line is open. Please go ahead.

Hi, good morning. I am wondering Bill you talked a little bit about return on invested capital, I am wondering if you are still targeting double digits by the end of 2015 and how you see the trajectory of getting to that metric, is it sort of a steady 100 basis points a quarter or now you tend to be more of a hockey stick at that end and why and I guess related to that this National Pump is the interesting in that, you are taking a local high margin product service and leveraging it across your network is part of a key element to the plan on getting to that return on invested capital you need to do more of the these things that’s sort of a new business model for acquisition for you?

So, on the ROIC, just to be clear I think what we said about ROIC is that certainly we are targeting double digit 10% is our internal hurdle rate. And we have talked about achieving that in the material that we put in our investor deck achieving that over a 3 to 5 year period. So 2015 is a little more sudden than what we would say, we would expect to achieve double digit ROIC. Not impossible but that’s not what we have talked about historically. I do believe that growing in the specialty areas is going to be an important component of us achieving that high level of ROIC. Again in the material we put in our investor deck there is a contribution that we have there from business mix and other and part of that business mix is from growth in the specialty areas either organic growth or indeed if we do any further acquisitions. The material we put out does not assume acquisitions, that’s purely organic growth but acquisitions certainly could help accelerate that process if we found the right ones. So, I think that’s the way we talk about specialty and its contribution. Specialty certainly will be an important driver, but it’s not the only driver of us getting to the levels of return that we want to get to. There are things that we can continue to do in our base business and we are working very hard at those everyday.

And just to follow-up, what was the starting point for that three to five years, is that back from our Investor Day in 2012 or is that sort of just been ongoing?

Yes. So, that’s something that we have put out in our investor material, I don’t know, quarter, two quarters ago. It’s based on 2013 ROIC. So, 2013 and we have targeted a three to five-year horizon of getting above 10% and we have talked about the components that we think will drive us there.

Okay, great. Thank you very much.

Thank you.

Thank you.

Thank you. And our next question comes from Jerry Revich from Goldman Sachs. Your line is open. Please go ahead.

Hey, Jerry.

Thank you. Good morning. Michael, can you talk about out of the lean initiative that you mentioned what would the impact be on fleet available for rent, though it looks like in your long-term bridge you are looking for 100 basis points of utilization improvement per year? Is that the driver, I know you spoke about the cost benefit, but maybe you can touch on the utilization opportunity of the results?

Well, I think what you are referring to is as we go to the lean process we are talking about the shop flow and turnaround time, which will be a component of not available for rent. And we – if we were to take down 2 points, that would be a substantial amount of freed up cash to deploy to put on rent. That’s part of the strategy around the lean. As I mentioned, we have had 141 branches. We are seeing nice improvements in efficiencies there. And we are going to continue to focus on that. So, that’s part – that would be part of our plan. I think the other part of our plan around the not available for rent is really just about discipline and fleet management. And when we took a look at the best of both worlds between United Rentals and RSC, we merged the two together. We have a gentleman who came over from RSC who is managing our fleet with the field and is doing a very good job of implying and putting that process to work. So, our processes have changed as well in the way in which we deploy capital and move our fleet, but those will be the two dynamics that we are focusing on. And if you take a look at our size of our fleet, 2 points is real money.

Okay, thank you. And can you just talk about on the capital allocation side, which regions you are seeing outsized capital allocation, still where you are seeing the most of maybe still in the top two or three regions within your company?

Yes. Matt?

Yes, sure, Jerry. So, regionally, you could imagine where the hotspots are. And although we have had broad-based growth as a matter of fact we had 12 of our 15 regions show double-digit growth and that’s exclusive of pump will also obviously have robust growth. So, we are spreading the capital, but there are couple of hot pockets, where you could imagine the energy sector and not just upstream gets a lot of talk, but we are seeing capital projects at a high level in the energy sector overall, whether it’s power plants or LNG plants. So, those hot pockets along the Gulf Coast and then some spots up in the Northern Midwest are certainly getting their fair share of capital, but I wouldn’t point to just one or two spots where we are seeing robust growth in many of our end markets.

Yes. I would only add that the only other thing that we are doing differently on a capital allocation is around contribution margin, not only by asset, but by customer. And that is probably one of the key takeaways of the changes in the way in which we are putting our fleet to work. So, under the gentlemen I mentioned earlier, that is being implemented through the field. They understand it. And it’s a different way in which we look at the world. And therefore the monies that we talk about that the capital allocation that’s one of the reasons why we will continue to make sure that the specialty businesses are well-financed and well funded for their growth. And doing it both organically as well as through cold starts and we have done two acquisitions. So that’s kind of how we think about it.

Thank you very much.

Yes. Thank you.

Thank you. And our next question comes from George Tong from Piper Jaffray. Your line is open. Please go ahead.

Good morning.

How are you?

Thank you for taking my question. I just want to drill a little bit deeper on rates, you mentioned that your pump business was not reflected in rate growth this quarter since it was not in the business a year ago, once National Pump does lap next year can you quantify the impact you will have on the rate growth?

George I don’t think it will be a significant impact one way or another the rate growth is not dramatically different than what we are seeing in other areas. The pump story is more about getting more fleet on that, it’s a volume story for us more like here now. And that’s the real opportunity if I can get out there find the customers who need pumps and get those pumps in their hand. And so that’s what we are chasing at. I don’t think you are going to see it moving our rate performance dramatically once it does start being included.

Very helpful. Thanks very much.

Thanks George.

Thank you. And our next question comes from Nick Coppola from Thompson Research. Your line is open. Please go ahead.

Good morning.

Good morning.

So I wanted to ask the one question on weather here and kind of in your conversations with customers how much volume in Q2 do you think could have potentially been from work pushed out from winter weather and really just some catch up activity occurring?

Hi Nick, this is Matt. We are not really seeing that as something that we are hearing from our customers, it’s really when you think about the cycle of a project you can ramp it up some and maybe condense the front end of it if you have a delivery date towards the end of the year and maybe you can condense some but you still got to go through the normal phases of construction. And I don’t know that you condense it enough, but it would have a real impact on Q2 revenue maybe some small projects that had a very short window of needs, but that’s not a monstrous spot of our portfolio. So I don’t think it’s a material and which we don’t think it’s a material impact.

That makes sense. And then just my second question can you give us any color on what’s been going on through the first few weeks of July here and our utilization rate kind of trending in line with your expectations and any kind of incremental color on that would be helpful?

Sure, Nick, it’s Bill. Yes, the first quarter – excuse me the first parts of the third quarter early part of July things are trending nicely for us. So and very much in line with the outlook that we have given and what we expect. On the rate front, on the utilization front, volume front it’s trending well. And then Matt or Michael if you guys want to add anything.

No, I think you said it.

Alright. Thanks for taking my questions.

Thank you.

Thank you. And our next question comes from Joe O'Dea from Vertical Research.

Good morning. First question I think is on the EBITDA incrementals into back half of the year, you had sort of expressed that there would be a little bit of a step down into 2Q and understand the National Pump impact, but as you go into the back half and sort of implying an additional step down, could you just walk through some of the components driving that?

So, in the back half I think the key things to remember are the impact that we will see on the year-over-year rental rates. I think I mentioned that before with the fourth quarter in particular being a little bit less of a year-over-year improvement than what we have seen in the first few quarters of the year in the lower half of 4s instead of in the upper half of 4s where we have been. We have got the year-over-year impact of items like our bonus accrual I mentioned that in our bridge of EBITDA. Compared to last year our bonus and the compensation expenses are going to be up a little bit. Used sales is a significant impact in the second half versus the first. Remember, if you go back to that first quarter our used sales were actually down year-over-year and used sales bring a lower margin than the rest of the company. So as they go down they actually help the flow-through. That was a pretty significant impact in the first quarter. And so that impacted the first half flow-through positively and therefore the second half should be a little bit less. What else, the pump acquisition obviously will be a significant impact I called that out already 4% to 5% impact, depressing the second half and therefore pushing it down versus the first half. I think the important thing to focus on is the full year flow-through that we expect is still about 60% and that’s including the impact of pump. If you excluded pump the full year would be a little higher. And therefore the second half would be a little higher than what maybe you are calculating just based on the outlook that we have given. And truth told if you have put a gun to my head I said this last night to a couple of folks. If I had best weather it would be little higher or little lower than that 60%. I bet right now maybe a little higher. So I think that flow-through is shaping up nicely for the year.

That was really helpful. Thank you. And then just components of growth obviously the National Pump impact on mix in the quarter, I think from the Q it says that the mix effect is still a headwind on the general rental side, but just how to think about mix into the back half of the year and sort of net effective of inflation and mix to growth?

But I think if you think about the back half as comparable to the second quarter from a mix impact perspective that will be a good start on how to model it. So as I said earlier about 3.5 percentage points of the 16.8 rental revenue growth that we had came from mix, I think if you did that again for third and fourth quarter that will be a good starting point.

Great, thanks very much.

Thank you.

Thank you. And our next question comes from Tim Robinson from Susquehanna. Your line is open. Please go ahead.

Hi guys, good morning. Thanks for taking my call.

You’re welcome.

I just want to ask real quick about SG&A and it (picked) up, it sounds like it was mostly incentive comp and I am assuming acquisition out of the costs as well, I was just wondering if there is anything else and that we should be aware of and how you would encourage us to think about the 187 as a run rate going forward?

Nothing else major to call out Tim in SG&A, the incentive comp was the big driver. As you go forward again there is nothing major that I would call after the second half. So I think you can safely use the run rate obviously we will have the impacts of the selling cost based on your revenue estimates, we will have puts and takes incentive line items. But nothing major that we point out. Tim Robinson – Susquehanna: Got it. And then real quick if you would hit your rate guidance for the year, what would that imply for a carry over the pricing heading into 2015?

Give me second Tim here and we will dig that up. Its normally in the 2% area maybe a touch higher but we will dig it up real quick and through it out before the call end. Tim Robinson – Susquehanna: Perfect. Well, thanks a lot. That’s all I have.

Thank you. And our next question comes from Nicole DeBlase from Morgan Stanley. Your line is open. Please go ahead.

Yes. Good morning guys. So just a question on CapEx I know we talked a little about the potential for our additional M&A with your free cash flow for the rest of the year, but I am just curious what would cause you guys to take up your CapEx plans from the $1.7 billion for 2017, is there anything or is that pretty much you would say like locked and loaded for the year?

This is Mike and I will ask Matt to join in and Bill too as well. But for me I would like to see both rate and time utilization grow and particularly as it applies to our contribution margin in areas that we can really get nice returns on. But those are probably the two dynamics. That being said it’s also I want to make sure with the management team that we are not just buying for today. We are buying for multiple years. So but they can put that equipment to use longer term and but rate and time utilization that combination may give me the opportunity to think differently.

And I think so, this is Matt, Nicole. I somewhat passed earlier about what kind of impact lean could have on OEC NA and OEC not available. So, as we continue to drive our lean initiative throughout the organization we are about 20% to 25% of our stores impacted already. We actually hope will create more capacity for growth within the capital that we have. So, we really have gotten our team away from the thinking that I need $2 of capital to drive $1 of growth revenue and that’s really part of our goal and part of the reason why we want to stay disciplined on our capital spend.

And the only thing I would add, Nicole, is that all of those factors we would mix in along with the impact on cash flow. We take cash flow pretty seriously. And as long as we don’t feel that we are doing significant damage to our cash flow and in the long run we are enhancing our cash flow as a company that would be a factor in deciding to spend more capital as well. Just to go back to Tim’s question about carryover rate if we did 4.5 this year, I think 2% is probably a good number to use right here now. So, just Tim, I wanted to follow up on that.

Okay, thanks for the color on the CapEx guys. And just one more for me, I mean, Mike’s comments about commercial construction were pretty bullish, I am just curious are you guys actually seeing real tangible signs of that recovery or is that more a reflection of just customer confidence and their recovery getting better?

Hi, Nicole, it’s Matt again. I would say it’s both. So, you see in our deck that our customer confidence is the best results in our survey that we have seen all year, including last year. And we also have seen a robust pipeline of large projects and that’s a core competency, not just of ours, but of our key accounts. So, we expect to get our fair share plus of participation in those projects. And I had mentioned earlier all the jobs in the power sector and the LNG probably the most renowned one is the (indiscernible) project down in the Gulf Coast, but we have got stadiums popping up in different markets. We have got large retail popping up in different markets and really a robust pipeline of major projects throughout the country.

Okay, great. Thank you guys so much.

Thank you.

Thank you.

Thank you. I am showing no further questions at this time. I would like to hand the conference back over to Mr. Michael Kneeland for closing remarks.

Well, thanks operator. I want to remind everyone that our annual Investor Day in New York has been scheduled for December 4. So, I hope you all attend and join us on our webcast, but more information will come forward as we get closer to that date. In the meantime, please download our current investor update or our updated investor presentation that we have. And as always, you can contact us here in Stanford if there is something you want to discuss. So, operator, you can end the call now. Thank you.

Thank you, sir. And ladies and gentlemen thank you for participating in today’s conference. This concludes our program. You may all disconnect and have a wonderful day.