Good morning, and welcome to United Rentals’ Second Quarter 2015 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, 2014, as well as to subsequent filings with the SEC. You can access these filings on the Company’s Web site 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 thank you and good morning everyone and welcome. I want to thank everybody for joining us on today’s call. I want to focus most of my comments today on the dynamics of our operating environment. I'll discuss how our industry is adjusting to the recovery and I'll talk about the non-residential construction is hitting its stride particularly in the commercial sector. And then Bill will cover the financial results followed by your questions. So, first look at the quarter, we turned in a solid performance with nice gains and profitability, margin and returns. Our EBITDA margin increased over 49% in the quarter and we reported earnings per share of $1.95 on an adjusted basis. And these were both second quarter records for us. Free cash flow was very strong at $432 million through June. Now taking in an entirety these numbers reflect the fundamental strength of our operating environment. There is clear evidence of demand for our equipment and demand is growing. However, taking individually to the underlying metrics reflection challenges in our environment. The rate and time utilization, rate came in softer than expected at 1.5% higher year-over-year and time utilization was down 150 basis points to 66.6%. Now it's important to understand what these numbers do and don’t represent. For one thing, they do not reflect the macro weakness in demand. Now we spend a lot of time analyzing industry behavior, and we believe that rental demand in North America has multiple years of growth ahead. We also think that 2016 will be even stronger than in 2015 for our end-markets and the growth will be led by non-residential construction spending. And that’s what most industry experts believe and we agree. And what the metrics point to are two dynamics that are more like micro cycles within…

Thanks Mike and good morning everyone, I'll try to add a little bit more color to the numbers that most of you've seen in the press release or heard in Mike's remarks. Starting with rental revenue. Rental revenue for the quarter was up 3.5% year-over-year that's $42 million of an increase. Within that increase owned equipment revenue represented a 3.7% year-over-year growth for about 37 million of that 42 million. The remaining rounded 4 million was ancillary and re-rent items which were up nicely over the prior year. Within the OER growth, rental rate the 1.5% year-over-year rental rate that we delivered in the quarter it placed to about $16 million of the 42 million year-over-year growth, the volume growth 2.8% volume growth represents about $29 million worth of rental revenue growth year-over-year. The replacement CapEx we sold replacement the CapEx average age of 86.9 months in the quarter inflating that over the average life of equipment that we sold resulted in about 1.9% or $20 million of rental revenue headwind in the quarter and that leaves about $12 million of mix and other impacts resulting from the strong growth in specialty and other mix effects throughout the business. So those are the key components of the $42 million year-over-year rental revenue growth. The only other point that I would emphasize is that Canadian currency effects are at place without all of those lines with the exceptional rental rate. Canadian dollar is weaker by 11% in the quarter and that result in about $15 million of headwind in the quarter compared to last year. So a significant component to the overall performance that said we still delivered the 3.5% in spite of that particular challenge. Moving to used equipment sales we generated $124 million of proceeds from used sales in…

[Operator Instructions] Our first question comes from the line of Ted Grace from Susquehanna, your question please.

This is Tim Robinson on for Ted, thanks for taking my question. First question I had was I was wondering if you could provide us with a framework for how you see the industry supply situation currently, and how you see that unfolding over the next three, six, nine, months.

So Tim I will start and please Mike and Matt chime in. I think I hit on it in my comments and Mike did as well. There's the dynamic of oil and gas is a major factor that we continue to work through, but we feel like we are making good progress in working through it. The industry as well as working through it and I think overtime they will. As long as there is not a major down leg on oil and gas drilling activity given what we've seen and we put some more information in our investor deck to share with you the trends that we've seen in oil and gas activity. We think that the impact from oil and gas is stabilizing and even if it goes down a little bit more, it's not going to be a major change from here. The supply dynamic is one that I think we're also very focused on. Some of the mid-sized and smaller players according to data that we've seen from Rouse and elsewhere have been growing their fleets in the early part of this year. What we've seen and heard more recently, let us call it over the last couple of months is that they are much more attuned to the challenges that the oil and gas dynamic have put to the industry and so people are now focused more on making more disciplined decisions we believe around their supply in the current environment. So, that's what frames our thinking that we can work through this supply excess if you will in the relatively near-term, couple that with the demand back drop that we've talked about says that we'll get through this and times should be better going ahead. I don’t know if you guys want to add anything Mike or Matt.

No I think Bill you covered it well when Mike referred to the time utilization in the non oil and gas stores only being down 30 bps and imagine how much that they have to absorb into those end markets that they are participating in from the oil and gas this location. As well as everybody getting a little bit head on their fleet purchases and that’s an encouraging sign that bolsters our opinion.

I would only add one data point that I pointed to in my opening comments was Rouse and they’ve got a wealth of information on this particular subject. And if Gary was here on the phone he would probably say that exactly what Bill mentioned that as we went for the seasonal side it is being absorbed and the utilization and we always see on ramp is increasing.

Can you just give us an update on July trends for rate and time?

Sure, Tim. Just the way we've characterized it is that July rate is very much in line with our expectation for the remainder of the year. The time and fleet on rent growth are a touch ahead of our expectation for the remainder of the year. And maybe I'll offer up a little bit more here. Your natural question is what is your expectation Bill? We're not going to give the exact number for the month of July, but our expectation for rate sequentially over the months remaining in this year, are flat to down slightly on each of the remaining months, so that gives any little bit better frame for the rate expectation.

When you think about that flat to down slightly for rate sequentially how would you compare the rate expectations for the non-oil and gas exposed places as opposed to the oil and gas branches?

I would say they would fare better as they have they’ve been almost over half of point better through the second quarter and we'd expect to see that combination. And flat to down there could be some lumpiness in there but if you do the math that’s needed to happen for us to reach our current guidance. And if there is more to be half out there as Mike stated we will go after and we do think the opportunity will be in the non oil and gas segments.

Thank you. Our next question comes from the line of Seth Weber from RBC Capital Markets.

I want to go back to the CapEx discussion. I appreciate that the Company wants to be positioned for an improving environment, but I'm really struggling with the way that you frame the second half for rental rates and fleet utilization. I'm just struggling with why you can't bring the second half CapEx number down. Do you have line of sight that you really feel like you need the equipment for the start of next year? Given the rate and utilization outlook that we're looking at for the third and fourth quarter, I'm just trying to reconcile why you wouldn't bring the CapEx down further at least for the second half of this year. And as a tie-in to that question, you brought your long-term -- longer-term rate guidance down from 3% to 2%, and I would think that one of the ways that you could ensure that the rate stays higher is with less -- with having upward pressure on fleet utilization, so I'm just trying to tie all this together, if you could?

Yes and Seth this is Mike and it's a great question. And it is one that we've been debating internally here for the last few weeks. Actually I would say the last few months. Well I think we have to start let me breakdown the CapEx for you to begin with of the 1.6 billion of rental CapEx. If you take away the inflation adjusted replacement CapEx of 114 that leaves you with a growth capital of about 460 million. And this is all seen in our investor deck that we have out there. We will spend on that 460 we will spend $70 million of that this year to refurbishments for our rental assets and the investments in our GPS or telematics for the fleet. So this is surrounded and that leaves about $400 million that is split evenly between our specialty business and our gen rent business. Now as I mentioned our specialty is doing quite well and we're funding the 10 cold starts that we started and we've eight more to go this year that’s a high margin business, high return. And it also provides an entanglement with our customer base. So now we're talking about roughly $200 million for the gen rent and we're the growth really goes into our national key account business where we've had some new wins and we're also investing in high time utilize assets. But when we think about the Investments, we don’t think about it just as a point in time. We are investing in what we think is the cycle that has multiple years of growth apparatus. But I want to also point out that, you mentioned that of dropping our CapEx this year. I'll point out in the investor deck that we also dropped it coming in the…

I appreciate that, Mike, but I mean when we used to talk about the business, we would talk about -- so you did almost 69% utilization last year and we used to talk about line of sight or runway to pushing that over 70%, and it just seems like with adding this fleet you're moving away from that objective and in conjunction with that the rate is coming down. So it seems like there is at a minimum an opportunity here for the second half of the year to take CapEx down and just wait and see how things progress because really nobody knows how the oil is going to play out and whatnot. So are you locked into contracts that are --this $200 million of gen rent, are those deals you can't get out of, or you really feel like you have line of sight to things getting better in the early part of next year that you need this -- or is there specific customers that are teed up for this equipment?

I'll start a part of it and I will Matt to chime in, our national account represents about 40% of our total business and it's up 7% in the quarter. These are contractual long-term obligations for us. So line of sight on those is pretty long in comparison to the rest of the industry. I will ask Matt to talk about time utilization and some of the dynamics.

Yes sure Seth so and as Mike said that additional 200 million of the flexibility to take that away without the kind of the risk of long-term relationships and long-term revenues and accretive positive good return revenue, so that’s why we came to that decision but when you parse out the gap year-over-year between was about 130 basis points and if you look at our full year guidance this year versus our full year actually this year. Half of that is a call that we made to continue our path on pump. So we've got a little over $70 million in pump assets that -- with that business being down we could monetize if we thought that was the right long-term decision. But we want a fund the additional cold start growth as well as can't really not fire sell assets that have plenty of trade left on them and will have value for us long-term as we see this other recovery for that business. That’s an investment we made for our longer term gains. So that’s half of that, 130 bps of year-over-year decline. Bill as pointed out that we moved a 125 million of assets at the oil and gas. That’s only two-third to what we have to do. We have about another 60 million that we have to move out in the balance of this quarter and we have action plans, individual assets identified. When we tie those two components together, those are the best to drag that’s the 1.3 year-over-year drag that we're dealing with and it's not unfortunately as simple as us saying we are not going to buy the remaining 200 million of high time assets in general business and replace some with those assets that are dragging the time down. And that’s why it looks a little dislocated from afar when you dig into the detail which we've obviously done. We're comfortable with our plan.

Our next question comes from the line of Steven Fisher from UBS, your question please.

Just wondering how you approach the guidance on rates for the second half compared to how you approached it in April. Was there any more caution or conservatism this time, or different analytical work? Just looking for your confidence that it won't be any worse than this barring a real fall-off in oil prices?

So, Steve it is Bill we're human beings so to the question that is their more cautioned probably. Look, we had a view of rates starting the year. We had a view of rates at April and both were wrong. So we thought very deep and hard about what we expect from the remainder of this year. And that's influenced by our experience. So, how much it is harder to put a number on it, but we feel like this is a realistic view and look I mean we've set about 0.5%, could it be 0.4 or 0.3, yes, could it be 0.6 or 0.7, yes, so I think it's fair to say that our thinking was influenced by the experience and we don't want to be in a position of missing this time to be brutally honest about it.

And then in terms of the non-oil related business, can you parse out the 30 basis-points of lower time utilization as a function of just the reallocated oil equipment, or is it other trends within the non-res construction market, and what is your confidence that you'll start to see that utilization improving in the second half?

I think we certainly expect that the non-oil and gas parts of our business as the oil and gas dislocation continues to be absorbed should see less of a headwind going forward. How to quantify that is a tough one to respond to. Matt or Mike, would you add anything?

No I would just say when you break it down market-by-market and you see that more -- half of our reasons have had sequential rate improvement in Q2 as opposed to the overall company. And nine of our 14 regions have shown year-over-year growth. We see that there are still markets that even absorbing extra capacity in the near term or performing well. And that what's gives us that confidence that we can -- we continue on the path that we re-guided to -- more importantly that '16 and '17 end market still strong for us.

I know you pointed out to it on the investor deck, which by the way we've broken it into two segments, so it's easier for people to go through. One is the financial deck and one is the background information but on Page 6 you'll see a non oil and gas locations. And you'll see greater than 20% upstream exposure the one with less than 20%. And we always see a ramp build is very similar to what the pattern you saw last year. You'll see that in the oil patch, particularly the upstream, you'll see the bifurcation of where it actually pivoted in March, and the drag it's been, but it seems that it is moderated as far as the timing. One thing we will tell you, is according to Rouse is that for the company, for the rentals, we still lead the industry in our peer group on time utilization. That being said, we don't have time, we got more to do as Mike mentioned. We got some more assets to get it clear out of here. We're going to get that done. So, this is a -- this movie hasn't played out yet, but we're focused on it.

Thank you. Our next question comes from the line of Nicole DeBlase from Morgan Stanley, your question please.

I guess my question is kind of on the medium-term rate outlook. So in the slides it was already mentioned that you guys have moved from 3% to 2% and I think that the footnote says 1.8% over the next four years. But I'm just curious when you look at what you are embedding now for free cash flow in '16 and '17, which the targets came down a bit, does your 2016 free cash flow estimate assume that '16 is the year that rates turn positive and when might things wash out from an excess equipment perspective and rates could possibly turn positive year-on-year?

And Nicole it is Bill our '16 forecast does assume rates turn positive year-over-year in '16 and so the note that we've put in the investor deck about it averaging 2% thereafter reflects a positive year-over-year in '16 and then a greater positive in '17. So that's the profile that we expect. The fleet absorption issue that we're playing through right now, we've talked about it being a 2015 or perhaps early 2016 phenomena. And that's shaping our thinking about how we approach allocating fleet capital and so forth.

And my second question just shifting to EBITDA drops, so you guys talked about some of the puts and takes there but you still had 70% EBITDA drop-through minus all of the one-time-ish items this quarter, so I'm curious, I'm calculating implied drop-through of about 48% in the second half. Could this possibly be conservative? Is there something to think about there, maybe incentive comp, just curious about your thoughts there?

There is nothing major and specific that we have baked in or our forecast for the second half. And so if you want to interrogate that has been conservative, I guess you could reasonably do it that way, but we don't want to get too far down the road of forecasting higher flow through unless and until we've got a better sense of where that’s going to come from. And we put the best foot forward on flow through and our comments year to date and we're going to work really hard on it in the second half.

Our next question comes from the line of Scott Schneeberger from Oppenheimer, your question please.

First one, Bill, for you, just following up on talking about the outlook for price going forward, could you speak -- thanks for the cadence of what you're going to see sequentially over the months of the back half, how is that going to flow into 2016? You mentioned a little lighter in '16 and better in '17 and beyond. Just curious at the transition at the end of the year and into the next year the rate flow-through? Thanks.

So if you're looking for statement about how the sequential in '16 will shape up we certainly have looked at that differently then we might have done have we not have the oil and gas location that we have right. So we tempered our view of how the sequentials in '16 will play out versus where we were before oil and gas. Hopefully that responsive to your question, if you got another question ask it a different way Scott.

Kind of a follow up, trying to figure out the right way to ask it, maybe I'll come back to that. In the meantime, I'm curious, maybe Matt this might be for you. Rental rate trends by asset class. Can you give us a little bit of color of what you're seeing with regard to the equipment itself? I think it's probably intuitive with regard to pumps perhaps, but maybe stabilization and then some other things that anecdotally might be helpful to us. Thanks.

Sure Scott so when we look at two major cats some of our larger products are similar to what you'd imagine the overall company is and maybe hair better. So the aerial products the reach fork products are similar a hair better than what we're seeing is the overall company. Some of the higher return assets that are in the oil and gas whether it's some dirt product or light towers they're seeing a little pressure because of the extra capacity moving into different and moving them into different markets. So I guess the way I'd answer is the more fungible the asset the more it seems to act like the overall business and those are less fungible life comp like some of these high hour assets that have been in the oil and gas for a while where we're seeing a little more rate pressure. And these aren’t huge swings but there is some delineation between the two.

Bill, if I could circle back just really quick, historically you've talked about, hey, we're ending this year, we have been running at 3%. Now hypothetical, and that's going to trickle 2% into the coming year. That is essentially what I was asking, and then what we should think about in comps this year-over-year comps in the first half, with that in mind, just to get us a -- leading into '16 and where that may start?

I do this without going through a quarter by quarter breakdown in 2016. Maybe I'll approach it this way if we finish the year the way we have in our forecast for the second half of 2015. Our carry over into 2016 will be about a quarter over point negative. So that’s where we would start the year and if we got any reasonable sequential progression from that and that will start digging us out of that negative carry over position. Is that helps.

Our next question comes from the line of Jerry Revich from Goldman Sachs.

This is Bernan Jack on behalf of Jerry. Can you give us a sense for time utilization performance for national pump in the quarter, maybe quantify the headwinds of total business?

We haven't broken out national pump utilization sort of separately. You know, as you might imagine, it is on a year-over-year basis it is down materially. But that is about as far as, you know, as we have broken it out. Matt, do you want to.

Yes, if you look in the industry background deck on Slide 32, you will see that we have acknowledged there has been 11% year-over-year decline in revenue in the pump business and to Bill's point we haven't pointed out time utilization but we showed that in the slide, in the deck, and that's the best that we talked about earlier, right? About our longer-term view of this business and holding those assets that have a lot of tread left on them for the longer-term gain.

And then second, both the dollar and time utilization increased for aerial platforms, can you provide any color on what drove that improvement or what you're seeing in that market?

Sure. That is the aggregate of the improvement that we have been building so a little bit of that is the momentum that we've had over, you know, the last couple of years, candidly. So that when is I had stated earlier in answer to Scott's question, that they're a hair better than what we're seeing overall in the company and when you pull out the oil and gas participation of those assets, that hair turns to be a little more significant, right? So that when is we're talking about the positive sequential rates in more than half of our regions and you have to imagine it is big a part of our fleet as aerial and reach fork are, they have to participate in that. So hopefully that answers your question.

Our next question comes from the line of George Tong from Piper Jaffray, your question please.

When you take a step back and look at the key metrics, rental rate growth slowdown/decline, time utilization reduction, CapEx reduction, those are typically classic signs of a peak in the cycle. What gives you confidence we're not at or near peak in the cycle and potentially a peak that is induced by overfleeting or oversupply?

That is a great question and so let me step back and say, if you recall, that used margins continue to be very strong. But more importantly we took a look at and if you take a look at just the U.S. economy forecasted growth in '15, '16 and '17 on real GDP it is supposed to improve. When you look at residential investment, business investment, and even the state and local investment, it is supposed to improve. Forward take a look at what Dodge has put out and we have this all broken down in our investor deck. Construction, excluding utility and gas plants, is going to be up in '15 by 9%. Projected 12% and 15% and 14% in '17, and then we even break it down by NHS where they see real construction growth by sector over the outlying years. Again all public information, all independent, and all of the primary goals, or I would say the primary business of non-res construction, which is a big catalyst for our industry, remains positive. So overtime we see that to continue to play out. With regards to the fleet, and I've talked about this, you know, the -- I understand the re-fleeting, I get it from all of the independents, they have been somewhat blocked out for some period of time. They won't have a endless supply of capital available to them. And I also think that with the rouse information, at least 55 participants, aside from the United Rentals, participate in this. So they have real data. They have real information by which they can help judge their business better today than ever before. And I believe that they sign up for this so that they can understand how they can drive better returns, how they can drive better cash flow, so that they don't get themselves into situations when the cycle does turn. So I don't see the cycle turning yet. I think there are still multiple years ahead of us, and we tend to agree with the experts that are out there.

Thank you. Our next question comes from the line of Nic Coppola from Thompson Research Group.

So I don't believe you guys talked about wet weather much. Clearly places like Texas, Oklahoma, and Colorado, saw a lot of rain in Q2, and so to what extent was that a drag in the quarter, any way to quantify that or speak anecdotally about it?

As we obviously saw in our largest year-over-year sequential time utilization gap, so it have a drag on the overall business we have since rebounded from that, so it certainly has some impact on the first half results. But candidly we don’t think that was the major reason it wasn’t a specific period of time. But I think the overall dislocation of the fleet that was brought in then and faster than expected decline in a big end market of oil gas is probably have more to do with it. But May weather was certainly no helping and we did see our largest dislocation we were over 170 bits down year-over-year in the month of May and then rebound it up to 130 bits in the month of June.

And then last question here. Wondering if you could just talk a bit about the acquisition landscape right now and whether or not the current environment is giving you any pause.

Look we're in a very good position right now we're giving billion dollars of share repurchases in back stock holders, so this point of flexibility to do acquisitions. But I will tell you that we have a high bar and we look at these things we've cashed on a lot and some that we have been intrigued by but it's ongoing. I would just say that the rigor is out there is not going to dissipate. I think that’s important for everyone to understand that this company has not change its view or its goals of where we are and where we intend to go on the returns whether it be capital whether the acquisition they all go in the same bucket acquisitions have to be on their own merit as to strategically, financially and culturally why we would do it.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

Well, thanks operator. And I do want to thank everybody for taking the time to spend with us. If you have any additional questions, please reach out to Fred, but as I stated just a moment ago, this company is going to be remain focused on executing on its plan and making sure that we focus on returns and that our goals have not changed. We are better equipped today than we’ve ever have in our past. And we'll pull that leverage we need to accomplish our goal. So thank you very much and have a great day.

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