Good afternoon, and welcome to the United Rentals Fourth Quarter and Full Year 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, 2017, as well as to subsequent filings with the SEC. You can access these filings on the company's website at www.unitedrentals.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.

Hello, everyone, and thanks for joining us in the call this afternoon. I want to start the dialogue today with one word, deliver. Yesterday you saw us report a fourth quarter that more than delivered on expectations, it was a strong end to a record year. But to us delivering is more about looking forward, it's about delivering again in the months ahead. So today we'll connect a momentum we created over the past twelve months with our positive outlook for 2018. So looking at the fourth quarter, the most prevalent tailwind was market demand; we leveraged this with two significant acquisitions and a flexible CapEx strategy. As a result our revenue growth in the quarter outperformed the market and that's on a pro forma basis which assumes we owned our acquisitions from 2016 forward. Not only did we grow rental revenue by 11.5% in the quarter, we improved all three underlying metrics; volume was up 8.8% year-over-year and rates improved 2%, time utilization was a solid 70%, up 100 basis points for the quarter. This put up for your time utilization to over 69% which is a new record for us. Three months ago I made the observation that the industry background are made to become more constructive and that was clear in December when every one of our regions reported positive year-over-year rates for the first time in years. Our rates are a key driver of growth in returns and are continuing to be a major focus for us in 2018, and it's been a while since we've seen this window of opportunity and I can promise you we won't rest. And here is another point; almost every metric in a fourth quarter performance compares favorably to the full year. Rental revenue for the year was up 7.6%…

Thanks, Mike and good afternoon everybody. We've got a lot of topics to go over in this quarter, so I may send out some of the normal commentary we do but please if I skip over anything of interest raise it in Q&A. Michael gave a lot of the pro forma's for the full year performance, so most of my comments will be focused on as reported data, I'll call out the pro forma's where I think it adds to the understanding. I'll start with the rental revenue as always; a $1.646 billion was the rental revenue in the quarter, that's up 27% or $348 million versus last year. The breakdown started with the ancillary and re-rent, those two combined were up $51 million year-over-year. Ancillary was the big driver and that reflected primarily the volume of delivery fuel and Rental Protection Program revenue that we had from the addition of NES and NAF. Certainly, we continue to drive delivery realization as well in the base business; those were the main drivers of that 51 increase between those two items. OER was the remainder; within OER volume was up $322 million reflecting the nearly 29% growth in OEC on rent that Mike called out our rate was $12 million contributor as well year-over-year as positive rate of 1.1% in the quarter on as reported basis. The pro forma rate realization in the quarter is 2% and that's certainly is encouraging as we go into 2018. Replacement CapEx inflation, we call $17 million reflecting our normal inflation and mix and other was a headwind of about $20 million in the quarter as well; so the net of all of those added together gives you the $348 million change on rental revenue in the quarter. Quickly moving to used equipment sales; another…

[Operator Instructions] Our first question comes from the line of Ross Gilardi. Your line is open.

I just want to kick-off with the free cash question just Bill as you were going through those details; but look at -- your guidance right now, your EBITDA and free cash conversion looks like it's 35% to 40% at least for 2018 but looking further out is there any reason that you can't hold that level of conversion for the next several years because if EBITDA continues to grow you're presumably kicking off $1.5 billion for year on consensus numbers for the foreseeable future. So I just wanted to get your reaction to that thought process? Is there any reason why that cash conversion should really change materially in the next couple of years?

Ross I'd say that there is nothing really unusual other than the impact of tax reform, nothing else unusual driving our free cash realization. So I think that story might be told by the impact of tax reform. Remember that the 100% depreciation under tax reform goes away after five years, so at some point that benefit is going to be reduced. Remember also that they placed caps on the amount -- the percentage of EBITDA that you need to be below in order to still deduct interest expense, we are below that cap currently but that cap changes from a percent of EBITDA to a percent of EBIT at some point in the next few years. And depending on where we are in our profitability and our leverage it may have an impact as well but those are the things that I think over the future years -- the unusual things that might impact the cash conversion outside of just our normal operating performance.

Just on the supply demand balance for rental equipment; if the market was excessively tight after the hurricanes, do you feel like we've come back into balance as you've pulled forward some CapEx and clearly it's the seasonally softer time of the year but do you feel like price momentum has got subside in the first half of '18 -- more when you get into the spring months as you pulled forward some your CapEx?

I wouldn't say that there has been an extraordinary tightness due to the hurricanes, maybe in a few markets but we felt all year demand was -- that the combination of demand and the disciplined supply of the industry really played into the dynamic of great opportunity and better time utilization; and we see that continuing and we're forecasting that to continue throughout 2018. As far as -- we maybe a little bit lighter on the cadence of our 2018 CapEx growth; so we might bring in a little bit less than normal in Q1 just because we brought more in Q4 than we usually would but other than that no real impact on our full year thoughts about CapEx where we get back to more normal cadence.

Our next question comes from Rob Wertheimer. Your line is open.

I had two questions if I may. The first is just on dirt as a relative attractiveness; I mean there is a lot of signs with the used equipment etcetera that the dirt is maybe tight. I don't think there is any structural improvement there and obviously if you've mixed the fleet that direction with the acquisition. And then second, all the stuff from both maybe you can just respond as you choose. I love that total control chart that you've got in the slide deck. I mean can you give anecdotes around this; it would appear that you're steadily, steadily growing that base; I don't know if you're losing anybody who has installed or if there's a really good lock-in on it and what people are seeing in terms of benefits and savings as I guess as well as you guys?

As far as the great observation on the total control value we feel very strongly about it and fortunately the customer response seems to feel strong as well; so that is organic growth and it's as you could see a couple of points higher than what our overall growth is. And I think that's important because although it's not a huge percentage of our customer base they're usually large important strategic customers and we go through that extra effort to add value to them and they do outpace our overall growth. As far as the dirt attractiveness, obviously we like the impact of the Neff acquisition, not just the talent we brought in or the fleet mix but I think the biggest opportunity are the customers that we brought with that. So adding a larger mix of dirt gives an opportunity to serve maybe a broader customer base than we had previously. The net-net impact in dirt fleet, it went from 12% of our overall fleet profile last year to 14% this year and although that is an impact, the bigger impact is the access to those customer bases, especially in key verticals like infrastructure which we're very bullish on.

So can we expect you to continue to invest a little bit in following along with the dirt side?

Absolutely, especially as the demand continues and we already were to be clear set aside from the Neff acquisitions; the Neff acquisition just gave us a real boost specifically in the larger end of the dirt.

Our next question comes from Joe O'Dea. Your line is open.

First question; you referenced the industrial side of the business. Could you talk about what portion of your revenues are really made up of the industrial side and then what you've seen over the past couple of years whether that's more stabilization or whether that's kind of moving off of a bottom and just trying to appreciate what kind of recovery we could see there?

So just the aggregate industrial have to pull a number together but the key areas for us as we think about growth going forward, chemical processing certainly is an attractive growth area for us. The manufacturing might be a little slower this year, metals and mining and minerals we think could be a nice growth area for us as we go forward as well. And then power pulp, paper and wood products will probably contribute as we go forward as well. Oil and gas, if you want to call that industrial has been a growth area for us, upstream activity had a nice growth in 2017 given the impact of oil pricing and drilling activity, the upstream part of that will be a growth area for us. Midstream and downstream will depend on -- quite honestly on the timing of some of the turnarounds in the refinery complex, that timing is always a little bit of a wild card for us but certainly we have reason to be somewhat optimistic that that will be a growth area for us as well. So hopefully that's useful.

I would just add additionally that the capital spending forecast for what is the largest part of our industrial business is petrochem are both positive for 2018 and 2019; so we're encouraged about that as well.

Michael, you're occasionally asked about interest in expanding internationally; I think you usually address that is something down the road but certainly don't eliminate the possibility. And when you think about the kind of cash that you're looking at generating over the next few years, does that in any way influence how you think about the timing of potentially -- expanding some of your growth to overseas?

The fact that we've had the capital available to us, not only coming into this year in 2018 but we've had it for quite some time. It really to me is going to be predicated on our customers, the customer demand and wanting us to go beyond. We talked about total control, there are a lot of Fortune 500 companies that we are engaged with and using our digital front. And that may be the impetus to get us beyond North America but there is no footrace and as Bill mentioned about acquisitions, they will be what they will be and they would be under the same scrutiny that we've always gone through it. But still plenty of opportunity in North America but we never say never and when the time is right or the customer is prepared, we'll be prepared to go what them.

Our next question comes from David Raso. Your line is open.

I'm just trying to think about the commitment you've usually had to 2.5 to 3.5 leverage. I mean, Bill you've been there for 10 years and every single year you've been there the company has never ended the year below two and a half net debt to EBITDA. And if you look at logical thought of where you're EBITDA is at '19 -- I mean your net debt to EBITDA is usually down like one-eight. I mean you're literally talking about $2.5 billion to $3 billion to put to work; are we still committed to where I shouldn't expect to not end below $2.5 billion net to EBITDA either of those two years? I mean at this level you could -- the next 24 months buyback over 15% of the stock. I'm just trying to understand are we still committed to something that you've always done, you've never ended a year since they hired in '08, below 2.5 net debt to EBITDA.

David, I think -- I don't -- I can't get too far out on this discussion because honestly I can't get that far ahead of our board but I think we've made a compelling case in the past that 2.5, 3.5 is a good range; we have always said that we're not afraid to go a little above that for the right deal or a little below that depending on where we are in the cycle. So it's not like gets a religiously set number to say 2.5 is the absolute lowest. That said, if it were Bill Plummer's world, 1.8 is too low, right; I believe we selected that 2.5 to 3.5 range because it represents our view of a good balance between efficiency of the capital structure and management of the risk against the cycle, right. Getting much, much below 2.5 starts to become more inefficient and you don't get much in terms of protection against the downturn. So that would be the argument I would make to the board but the board has their perspective on this issue right, and so going through that and discussing it and coming together on a point of view is what the process is that we're going to go through to decide where we end up in terms of the leverage. And it's going to be live and up by the fact that there may be deals that come along or the market strength may indicate that we need to spend more on capital as we go along. So I'd say stay tuned is the way to think about it but certainly we're very pleased to be in a position where we can think about all these things at very large scale.

So as you said in the Bill Plummer world, this Slide 20, 2.5 to 3.5 is still the way to think about the company and you're not going to deviate off of that for too long and you've not heard anything from the board to suggest they want to delever the company beyond this framework; is that a fair assessment for now?

I think the fair assessment is to say we don't live in Bill Plummer world. So at least not Bill Plummer world alone; so I'd just point you to stay tuned David and we'll talk about it as we develop that thought process.

Our next question comes from the line of Seth Weber. Your line is open. [Operator Instructions] Our next question comes from the line of Scott Schneeberger. Your line is open.

Scott, you're on mute or operator are we have any difficulties?

No. Please standby. Mr. Schneeberger your line is open.

Mike, I was curious in your comments about plant turnarounds later this year; it's kind of something that people have been waiting for -- I'm just curious if you could delve into that a little bit more and is that something that you're expecting and perhaps in guidance or is that something that's -- that would be an upside? Thanks.

Scott, there is a lot of positive industrial macro indicators that are out there, number one. And I'm not going to list them all because I think you know who they all are but they are uniformly positive, number one. Number two, just looking at some of the other resources – IR [ph], they are looking at the value of maintenance projects and capital projects as increasing; so we take those along with what we get back from their regions and our customers -- what they have on their books and what they're seeing. So we take all that to frame up our comments.

And then I'm curious on the progress report on online rental systems; just -- it's been a couple of years now and wondering how far have all decided [ph] and where that's going to go? Thanks.

As far as where it is today we feel very confident and about the capabilities we've built, the customer adoption we know is going to be a longer cycle; so it's not a big piece of our revenue right now and it's a pretty good mix of new customers versus existing customers. What we truly believe and why we've invested in this area is this is going to be the price of entry in the future, and not just for new customers but we think a lot of our existing customers will break more and more technology; so we view this as a must have long-term which is why we made the investment and we're seeing good early signs of the people that are adopting it, it's still a small percentage of our business.

Our next question comes from the line of Jerry [ph]. Your line is open.

Pricing was stronger than normal seasonality for you folks; in the fourth quarter I'm wondering if you can talk about how broad-based was -- it was the pricing strength versus normal seasonality and can you give us some context in terms of feedback you're hearing from the marketplace into January?

I think you can look to Slide 7, we actually give you a three-year sequential pricing grid there if you want to get into the detail later but you're correct, it was better than 2016, we're very encouraged by that. I think it plays off of the demand that we've been discussing on the call today and really throughout the calendar year '17 and we expect that to continue. If you want to delay over or carryover, so -- and we're going to talk about rate pro forma because we think that's the important way to think about it and it's the way we manage internally. We've got a 1.65 carryover going into 2018 -- pro forma. If you overlay the exact experience of sequential rate performance that we had in 2017 over that that would get you to about a 2% year-over-year rate improvement pro forma for '18. So we feel that's a good anchoring point; all I would say is that we haven't had a Q4 in a while where every single region had positive sequential performance and we're very pleased with that. Even Canada got to almost flat year-over-year in Q4 which is great for that team that's been fighting headwinds for a few years now.

And Matt, it sounds like that momentum is continuing in the early part of the year based on your comments just now and earlier in the call, is that a fair assessment?

I would say it's as projected, we're not giving in quarter guidance but Q1 always has -- it will be your toughest sequential but it's the year-over-year that we're focused on and trying to maintain that momentum and you know, that's embedded in our conversation, stay tuned for April, you'll get the exact update.

And on your digital platform, can you talk about what kind of recurring business you're getting out of it? So is it truly transactional one-off new client signing up or what do the usage statistics look like for you on that presumably? With your footprint you folks are better positioned than most in that platform and I'm wondering if you're seeing the level of statistics on the recurring business that are supportive or is it mostly transactional?

So as far as recurring, as I stated to Scott it's about 50-50; existing account customers and new customers joining in and they overtime convert to account customers but it is very broad geographically, product mix and even duration of rental. I would -- it's certainly a higher percentage of transactional than our overall base business because we have such a large base of key account business but I'm very surprised by how much recurring business and long-term rentals we're getting through that as a percentage as well.

The only thing I would add to that is, the digital era is here and it's going to grow overtime. And if you take a look at the total control, order entry for our customers and even internally for -- whether it be our sales force, the digital component is going to grow. What we've been doing is we've put everything under one unified platform so everything comes together in a more customer-friendly environment; so it's not only -- like I said in my opening comments, it's not just a digital -- if they want used equipment, if they want to go into safety training, rent equipment -- find information on their fleet through telematics, this is all coming together under one uniform platform that we have built and we're rolling out. There will be more to come and more update as we make progress but it's an investment that we're making for the future.

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

Just talk a little bit more about what's driving the shift to positive pricing year-over-year? How much of that is mix including the oil or activity or recovery versus just general tightness for all the across the market versus some of the analytics approaches that you've been doing or anything else?

Steve, it has been very broad, it is not any one segment, any one geography, any one vertical. Although we have had oil and gas growth to put in perspective it's still less than 5%; the upstream is still less than 5% of our overall revenue and I don't think it has -- certainly hasn't yet and I don't truly think that will ever get to the rate levels that it had previously, right; we're not going to have that oil rush in upstream again. I think everybody understands including the operator -- that wasn't a healthy way to operate and I don't see that recurring. So it's really been lifted by just -- by broad-based demand and as I mentioned, every region in the company had sequential positive rates in Q4.

I would say that it's also as you know -- the industry is overall is reacting positively; so I think I've mentioned this in several calls in the past that our industry is becoming more sophisticated and smarter, and knows about returns and so that's a good sign and I think you'll probably hear others as well talk about it.

And then if I could just follow-up on a question that Joe O'Dea asked earlier; if you could talk a little bit more about the process industry activity in the Gulf Coast, specifically in 2017 versus 2016? How did that look on a year-over-year basis for rental? And then I know you mentioned there's a number of petrochemical projects that you see in the works out there -- what have you embedded in your guidance for sort of the timing of all that happening and Gulf Coast '18 versus '17?

So specifically in the Gulf Coast I would call the first half of '17 was a little bit tougher than the back half; we actually saw improvement in Q4 in petrochem. I think going forward more importantly the capital spending forecast are up in both, higher in chemical, I mean we're talking about plus 30% capital project spending in chemical and almost double-digit in refining and those are really the two big buckets of business that we focused on in the Gulf Coast industrial business. So I think it's -- we can call it flattish to slightly up overall in '17 over '16 but encouraged and planning to do better in '18.

Our next question comes from the line of Rob Wertheimer.

I just wanted to ask a philosophical question on investment in technology. I mean do you view this is something that you keep spending as a constant percentage of sales? As you're seeing -- I mean your scale is obviously growing a lot with the acquisitions and the growth we're doing. And so you keep spending and see a widening gap versus folks or do you accelerate it maybe because it just enhances the sustainable margin/locking advantage you have versus folks or is there eventually scale on the technology spend that you've been ramping up for the past two or three years.

Well, I think it will be a combination of all of the above. For example; the investment we made in telematics and now educating the end user on the benefits of what they can get out of it and making that information for them available in a format that they can get and manipulate as need be, that'd be one. With regards to companies trying to find ways to control their cost, drive better time utilization or efficiencies in their plants or on those job sites; that's another form by which we do. And then you know we talk about safety, our United Academy of making sure that we're connecting not only equipment but people as well, that I think is going to pay dividends for us as a company in entangling our customers in a way that I don't know what my competitors are doing but what we know is that you know the digital communication is important, it's real-time, is giving them data, it requires them just to log-on where -- I'd far as I know were one of the few if not the only that you can order deliver, return and never talk to anybody and for some people in programming their jobs that's very attractive. Not everyone has a staff. So we're trying to touch as broad audience as we can and we're specializing in areas like -- we talked about total control but there are benefits that we think that will yield us a lot more in the longer term. We will continue to invest, the board is very supportive of thinking about digital and how we can think differently and helping our customers become more productive. That's what we do for a living, that's our job.

Our next question comes from the line of Stephen Ramsay Your line is open.

I guess I'm just thinking about your expansion plans for specialty for the next year and maybe even beyond; is the competition in this segment getting intense enough as more rental companies try to execute growth here. Is the competition making Greenfield expansion or bolt-on expansion harder or less attractive?

This is always competition. I think it makes us smarter, makes us more customer-centric, makes us have to think about what we bring to a value proposition. I never assume anything and so we have to make sure that we're listening to the customer and making sure we're meeting that demand. Some of our competitors are doing some other similar things that we're doing. But it's up to us to sting out how we can make a smarter or better mousetrap to capture that customer. We're broad, we have a broad customer reach and how we can leverage our customer through our cross-sell I think is something that we are doing exceptionally well and we'll continue to leverage on that.

I would only at now certainly remains attractive and a prioritized focus for us in investment. We're going to do another 18 cold starts in specialty in 2018 and that's on top of the sixteen net we did this past year, so it still remains very tracked and I'll make sure that's clicker. But if the competition is getting stronger we're getting better because our growth rates are still pretty robust.

Thank you. At this time I'd like to turn the call back over to management for any closing remarks.

Thanks, operator. I want to thank everyone for joining us today, as you can see we're excited about 2018, we expect to report solid progress in the coming quarters. In the meantime, as you -- you can always call Ted Grace, how is our Head of IR with any questions you may have and I urge you also to go on the website and download or look at our investor presentation that we have online. So that wraps up for today, so operator you can please end the call. Thank you.

Certainly, ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day.