#1ed Rentals -UR-RENTS nited Rentals TB250 Executing for Growth and Returns Quarterly Financial Review Update Second Quarter 2017 United tale QUnited Rentals#2Introductory Information Unless otherwise specified, the information in this presentation, including forward-looking statements related to our outlook, is as of our most recent earnings call held on July 20, 2017. We make no commitment to update any such information contained in this presentation. Certain statements in this presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These statements can generally be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "seek," "on-track," "plan," "project," "forecast," "intend" or "anticipate," or the negative thereof or comparable terminology, or by discussions of vision, strategy or outlook. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Factors that could cause actual results to differ materially from those projected include, but are not limited to, the following: (1) the challenges associated with past or future acquisitions, including NES Rentals, such as undiscovered liabilities, costs, integration issues and/or the inability to achieve the cost and revenue synergies expected; (2) a slowdown in North American construction and industrial activities, which occurred during the 2008-2010 economic downturn and significantly affected our revenues and profitability, could reduce demand for equipment and prices that we can charge; (3) our significant indebtedness, which requires us to use a substantial portion of our cash flow for debt service and can constrain our flexibility in responding to unanticipated or adverse business conditions; (4) the inability to refinance our indebtedness at terms that are favorable to us, or at all; (5) the incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness; (6) noncompliance with covenants in our debt agreements, which could result in termination of our credit facilities and acceleration of outstanding borrowings; (7) restrictive covenants and amount of borrowings permitted under our debt agreements, which could limit our financial and operational flexibility; (8) an overcapacity of fleet in the equipment rental industry; (9) a decrease in levels of infrastructure spending, including lower than expected government funding for construction projects; (10) fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated; (11) our rates and time utilization being less than anticipated; (12) our inability to manage credit risk adequately or to collect on contracts with customers; (13) our inability to access the capital that our business or growth plans may require; (14) the incurrence of impairment charges; (15) trends in oil and natural gas could adversely affect demand for our services and products; (16) our dependence on distributions from subsidiaries as a result of our holding company structure and the fact that such distributions could be limited by contractual or legal restrictions; (17) an increase in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves; (18) the incurrence of additional costs and expenses (including indemnification obligations) in connection with litigation, regulatory or investigatory matters; (19) the outcome or other potential consequences of litigation and other claims and regulatory matters relating to our business, including certain claims that our insurance may not cover; (20) the effect that certain provisions in our charter and certain debt agreements and our significant indebtedness may have of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; (21) management turnover and inability to attract and retain key personnel; (22) our costs being more than anticipated, and the inability to realize expected savings in the amounts or timeframes planned; (23) our dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms; (24) our inability to sell our new or used fleet in the amounts, or at the prices, we expect; (25) competition from existing and new competitors; (26) security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; (27) the costs of complying with environmental, safety and foreign laws and regulations as well as other risks associated with non-U.S. operations, including currency exchange risk; (28) labor difficulties and labor-based legislation affecting our labor relations and operations generally; and (29) increases in our maintenance and replacement costs, and/or decreases in the residual value of our equipment. For a more complete description of these and other possible risks and uncertainties, please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, as well as to our subsequent filings with the SEC. The forward-looking statements contained herein speak only as of the date hereof, and we make 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. Note: This presentation provides information about free cash flow, EBITDA, adjusted EBITDA and adjusted EPS, which are non-GAAP financial measures. This presentation includes a reconciliation between free cash flow and GAAP cash from operations, a reconciliation between both adjusted EBITDA and EBITDA, on the one hand, and GAAP net income, on the other hand, a reconciliation between both adjusted EBITDA and EBITDA, on the one hand, and GAAP cash from operations, on the other hand, a reconciliation between adjusted EPS and GAAP EPS and a reconciliation between forward-looking free cash flow and forward-looking GAAP cash from operations. Information reconciling forward-looking adjusted EBITDA to GAAP financial measures is unavailable to the company without unreasonable effort. The company is not able to provide reconciliations of forward looking adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of the company's control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort. The company provides a range for its adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the adjusted EBITDA calculation. United Rentals® Executing for Growth and Returns | 2#3Q2 2017 Results Rates Time Utilization Adjusted EBITDA* LTM ROIC -1.2% YOY; Pro Forma -0.4%** ■ 69.4%, an increase of 190 bps YOY; Pro Forma +210 bps YOY** ■ $747M or 46.8% margin, reflecting an increase of $68M and a decrease of 100 bps YOY, respectively ■ 8.4%, a decrease of 10 bps YOY *Adjusted EBITDA is a non-GAAP measure. See the tables provided elsewhere in this presentation for reconciliations to the most comparable GAAP measures. ** Pro forma results reflect the combination of United Rentals and NES Rentals for the relevant periods presented. The NES acquisition closed in April 2017. Adjusted EBITDA Margin of 46.8% on Record Q2 Time Utilization United Rentals® Executing for Growth and Returns│ 3#4Updated 2017 Outlook Total Revenue Adjusted EBITDA(1) Net Rental Capital Expenditures Net Cash Provided by Operating Activities Free Cash Flow(1)(2) ■ $6.25B to $6.40B ■ $2.950B to $3.025B ■ $1.05B to $1.15B, after gross purchases of $1.55B to $1.65B ■ $1.975B to $2.175B ■ $825M to $925M (1) Adjusted EBITDA and Free Cash Flow are non-GAAP measures. See the table provided elsewhere in this presentation for a reconciliation of forecasted Free Cash Flow to the most comparable GAAP measure. Information reconciling forecasted adjusted EBITDA to the most comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed in the "Introductory Information" slide. (2) Excluding the impact of merger and restructuring related costs. United Rentals® Executing for Growth and Returns│ 4#5OEC-on-Rent ($M) OEC-on-Rent Progression 8,000 7,500 7,000 6,500 6,000 5,500 5,000 Reflects July 4 holiday impact 4,500 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec OEC-on-Rent Growth Strong through Q2 2017 United Rentals 2014 -2015 2016 -2017 Executing for Growth and Returns | 5#6Sequential and YOY Rental Rates Monthly Sequential Pricing Year Over Year Pricing 2017 2017 2015 2016 2017 Pro- Forma* 2016 2017 Pro- Forma* January February March April (0.5%) (0.4%) (0.5%) (0.6%) (0.8%) (0.5%) (0.3%) (0.7%) (0.2%) (0.2%) 0.0% (0.2%) (0.5%) (0.4%) January (2.6%) (1.8%) (1.9%) February (2.8%) (1.5%) (1.5%) March (3.2%) (0.9%) (1.0%) (0.7%) 0.0% April (3.2%) (1.5%) (0.8%) May (0.1%) 0.5% 0.5% 0.5% May (2.5%) (1.4%) (0.6%) June (0.1%) 0.6% 1.0% 1.0% June (1.8%) (0.9%) (0.1%) July (0.2%) 0.0% July (1.6%) August 0.0% (0.1%) August (1.7%) September 0.0% (0.2%) September (1.8%) October (0.1%) (0.2%) November (0.5%) (0.3%) December (0.5%) (0.2%) October (2.0%) November (1.9%) December (1.6%) *Pro forma results reflect the combination of United Rentals and NES Rentals for the relevant periods presented. The NES acquisition closed in April 2017. Pro Forma Pricing Trajectory Encouraging United Rentals Executing for Growth and Returns│ 6#7YOY Rental Rates 4.0% 3.0% 3.3% 2.4% 2.0% 1.0% 0.0% T T (1.0%) (2.0%) (3.0%) (4.0%) Jan-15 Feb-15 May-15 Mar-15 Apr-15 United Rentals® Jun-15 Aug-15 Jul-15 T Sep-15 1.6% 0.9% 0.1% Year over Year Rates Pro-Forma Year over Year Rates* (0.1%) (0.3%) (0.6%) (0.8%) (1.1%) (1.5%) (1.7%) (1.7%) (1.9%) (1.8%) (2.0%) (2.6%) (2.5%) (3.2%) Oct-15 Nov-15 Dec-15 Jan-16 May-16 Feb-16 Mar-16 Apr-16 Jun-16 *Pro forma results reflect the combination of United Rentals and NES Rentals for the relevant periods presented. The NES acquisition closed in April 2017. Rate Momentum Consistently Improved Since January 2017 T Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Executing for Growth and Returns 7 Feb-17 Mar-17 Apr-17 May-17 Jun-17#8Time Utilization 70.6% شد Time Utilization Time Utilization 72.0% 2015 2016 2017 YOY 70.0% 68.5% January 63.7% 62.2% 64.1% 2.1 pt February 63.9% 64.3% 65.9% 1.6 pt 68.0% March 64.9% 65.9% 68.1% 2.2 pt April 65.7% 67.5% 68.6% 1.1 pt 66.0% May 66.6% 67.2% 69.6% 2.4 pt 64.0% June 67.7% 68.0% 70.0% 2.0 pt July 68.6% 69.2% 62.0% 59.9% August 70.0% 70.0% 60.0% September 71.3% 71.7% October 72.0% 72.8% 58.0% November 68.7% 69.6% December 63.8% 65.5% System Conversion Q2 Record Time Utilization While Integrating NES Apr 01 Apr 08 Apr 15 Apr 22 Apr 29 May 06 May 13 May 20 May 27 Jun 03 Jun 10 URI Locations NES Locations Combined Company Executing for Growth and Returns│ 8 United Rentals#9Industrial Production Expected to Remain Positive 8 Percent Change Real GDP and Industrial Production Real GDP and its Components Percent Change Real GDP 2017F 2018F 2.3 2.7 Consumption 2.6 3.1 Residential Investment 4.3 4.8 Business Fixed Investment 5.1 4.2 Federal Government -0.2 -0.3 State & Local Government 0.2 1.7 Exports 2.7 2.7 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 Imports 3.8 5.3 0 + -8 -12 Real GDP Industrial production Source: IHS Markit, July 2017 United Rentals Executing for Growth and Returns 9#10Consensus Forecast for U.S. Construction Put-in-Place Percent Change Year-over-Year 2017 2018 Commercial Total 8.3% 4.4% Office 10.6% 4.6% Retail and Other Commercial 6.8% 5.3% Lodging/Hotel 7.2% 1.8% Industrial Total +0.4% +3.3% Institutional Total 5.7% 5.8% Healthcare Education Religious Public Safety Recreation & Amusement Non-Residential Total 4.9% 4.9% 6.3% 6.7% -1.9% +0.6% -0.7% +4.0% 7.7% +4.3% 5.6% 4.9% Consensus High Consensus Low 8.2% 7.3% 4.2% 2.4% Source: American Institute of Architects (AIA) - As of January 25, 2017 (most recent estimates) Includes: Dodge, IHS Economics, Moody's Economy, FMI, CMD, Associated Builders & Contractors and Wells Fargo Securities United Rentals Executing for Growth and Returns | 10#11$2,500 3,000 3,500 4,000 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 4,500 5,000 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 Real Total U.S. Construction Spend Climbing $5,500 Real total U.S. construction spend per capita 10-year avg 20-year avg 30-year avg 00 Trailing 10-yr avg 1993 1994 1995 Investment Remains Modest Relative to Long Term Averages United Rentals® Source: U.S. Census Bureau Executing for Growth and Returns 11 1996 1997 1998 1999 2005 2005 2006 2007 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016#12Industrial Outlook - U.S. U.S. Industrial Spending Forecasted to Grow 2.9% in 2017 2016 to 2017 Change 8.4% -12.9% -49.5% -0.6% New runswick -17.5% Industrial Spend Forecast -13.6% 4.1% -32.0% -14.2% 0.6% 6.2% -0.6% 21.0% -10.1% -1.1% -3.9% $308B $311B $299B $297B $292B 12.7% 25.1% New Hampshire -15.6% Massachusetts 18.3% United States 32.3% 28.6% -8.1% 10.2% 10.8% Rhode Island -35.7% 49.7% 15,2% 6.2% New Jersey Delaware -7.5% 14.2% Maryland 27.0% -13.2% 3.7% 2.8% Baja California Sonora Chihuahua Coahuila Baja California 2.0% -3.9% Nuevo Leon, -10.7% -1.9% 2.7% -22.9% 4.9% 20.0% 11.5% 2016 2017 F 2018 F 2019 F 2020 F Sur Sinaloa Durango O&G Pipelines, O&G Production, Metals, Minerals and Pharma Expected to Drive Industrial Growth in 2017 United Rentals Source: Industrial Information Resources (July 2017) Note: Based on total project spending Executing for Growth and Returns 12#13Industrial Outlook - Canada Canadian Industrial Spending Expected to grow 0.3% in 2017 2016 to 2017 Change Industrial Spend Forecast (USD) 3.3% Washington Cana 14.0% -7.4% -5.6% North Dakota Montana Minnesota South Dakota Oregon Idaho Wyoming lowa Wisconsin 11.0% -27.7% -2.0% 10.4% 8.0% 1.0% $111B $103B $103B $91B $91B Michigan New York Vermont 2016 2017 F 2018 F 2019 F 2020 F Industrial Manufacturing, O&G Pipelines, O&G Terminals, Chemical and Pharma Forecasted to See Most Growth in 2017 Source: Industrial Information Resources (July 2017) Note: Based on total project spending. Includes actual and forecasted impact of exchange rate from $CAD to $USD United Rentals Executing for Growth and Returns│ 13#14Billions Industrial Project Pipeline Projects with targeted start date in next 12 months $700 Value of Capital Projects $600 $500 $400 $300 $200 $100 $0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Billions $16 $14 $12 $10 $8 EA LA LA Es 60 $0 $2 $4 $6 Value of Maintenance Projects Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Capital Project Pipeline Increasing Source: Industrial Information Resources (July 2017) Project pipeline includes all active projects with a target start date in the following 12 months (all phases of planning) United Rentals Executing for Growth and Returns│ 14#15Customer Confidence Index 70% 60% 50% 40% 30% 20% 10% 0% Jul '15 80% % Respondents Indicating an Improving Outlook* Aug '15 Sep '15 Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Oct '16 Nov '16 *Survey of Key accounts conducted by third party. Approximately 250 surveys conducted each month. Graph is three month rolling average of the % indicating an improving outlook United Rentals® Dec '16 Customer Confidence Remains Strong Heading into 2H 2017 Jan '17 Feb '17 Mar '17 April '17 May '17 June '17 Executing for Growth and Returns 15#163,300 Equipment Classes with Original Cost of $10.3B Booms and Earth Moving Lifts Forklifts Trench and Other Total/ Average % of Q2 2017 36.8% 11.5% 19.7% 32.0% Rental Revenue Time 73.8% 63.8% 79.4% 56.8% 69.4% Utilization* Dollar 39.2% 43.4% 38.4% 52.1% 42.9% Utilization Average Fleet Age** 53.4 39.8 39.4 45.8 46.7 (in months) Q2 Dollar Utilization 42.9% *All serialized assets regardless of equipment value (non bulk) included in time utilization **Fleet age is calculated on an OEC-weighted basis Note: Time Utilization, Dollar Utilization and Average Fleet Age are calculated using ARA metrics United Rentals Executing for Growth and Returns | 16#17Age of Used Sales in Months Managing Fleet with a Life Cycle Approach Selling Oldest Fleet Rental Capex and Used Sales ($M) * 1,580 1,701 1,534 90 88 87 85 85 84 2013 2014 2015 2016 Q2 2016 Q2 2017 Age Composition ($M) LLİ ($490) 2013 ($544) 2014 1,246 913 LLL ($538) ($496) ($239) 2015 2016 2017 YTD Time Utilization $11,000 $10,000 69.4% $9,000 $8,000 $7,000 68.8% 68.2% $6,000 $5,000 67.9% 67.5% 67.3% $4,000 $3,000 $2,000 $1,000 $0 ≤ 1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 >9 Total 2013 2014 2015 2016 Q2 2016 Q2 2017 Years United Rentals® *2011 and 2012 presented on a pro-forma basis; assumes RSC acquisition occurred on January 1, 2011 Executing for Growth and Returns | 17#18Generating Free Cash Flow* across Cycle $ Millions $574 $421 2013 2014 Actual $1,182 $919 $825-$925 2015 2016 2017F Forecast Strong Cash Generation Provides Ample Financial Flexibility *Excludes merger and restructuring cash payments. Merger and restructuring cash payments were $38M in 2013, $17M in 2014. United Rentals® Executing for Growth and Returns | 18#19Assumptions Driving FCF Outlook Rental CapEx Spend Cash Taxes 2016 2017E $1,246M - Gross $ 750M Net $1.55B - $1.65B - Gross $1.05B $1.15B - Net · $99M ~ $290M Cash Interest $415M ~ $380M United Rentals Executing for Growth and Returns | 19#20Balance Sheet Strength Continues to Improve 4.6 2 3.6 3 3.0 2.9 2.8 2.7 2.6x -2.7x 2011 2012 2013 2014 2015 2016 2017 Actual Forecast (1) Leverage Ratio calculated as total debt and QUIPS, net of cash, excluding original issuance discounts, premiums, and deferred financing divided by adjusted EBITDA. assumes no M&A. Pro Forma assumes RSC acquisition occurred on January 1, 2011 and excludes cost synergies. (2) (3) Pro Forma assumes RSC acquisition occurred on January 1, 2012. 2.5x - 3.5x Target Leverage Range Across the Cycle United Rentals Executing for Growth and Returns│ 20#21Adjusted Earnings Per Share GAAP Reconciliation We define "earnings per share - adjusted" as the sum of earnings per share – GAAP, as reported plus the impact of the following special items: merger related costs, merger related intangible asset amortization, impact on depreciation related to acquired RSC and NES fleet and property and equipment, impact of the fair value mark-up of acquired RSC and NES fleet, impact on interest expense related to fair value adjustment of acquired RSC indebtedness, restructuring charge, asset impairment charge and loss on repurchase/redemption of debt securities and amendment of ABL facility. Management believes that earnings per share - adjusted provides useful information concerning future profitability. However, earnings per share - adjusted is not a measure of financial performance under GAAP. Accordingly, earnings per share - adjusted should not be considered an alternative to GAAP earnings per share. The table below provides a reconciliation between earnings per share - GAAP, as reported, and earnings per share - adjusted. Three Months Ended Six Months Ended June 30, Earnings per share - GAAP, as reported After-tax impact of: Merger related costs (1) June 30, 2017 2016 2017 2016 $ 1.65 $ 1.52 $ 2.92 $ 2.52 0.09 0.11 Merger related intangible asset amortization (2) 0.30 0.28 0.57 0.57 Impact on depreciation related to acquired RSC and NES fleet and property and equipment (3) (0.03) (0.02) Impact of the fair value mark-up of acquired RSC and NES fleet (4) 0.13 0.06 0.19 0.13 Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (5) Restructuring charge (6) Asset impairment charge (7) (0.01) 0.14 0.02 0.14 0.03 0.02 Loss on repurchase/redemption of debt securities and amendment of ABL facility Earnings per share - adjusted Tax rate applied to above adjustments (8) 0.09 $ 0.18 2.37 $ 2.06 38.5% 38.4 % 0.09 0.18 $ 4.00 $ 38.5% 3.44 38.4 % (1) Reflects transaction costs associated with the NES acquisition discussed above. We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. The historic acquisitions that have included merger related costs are RSC, which had annual revenues of approximately $1.5 billion prior to the acquisition, and National Pump, which had annual revenues of over $200 million prior to the acquisition. NES has annual revenues of approximately $369 million. (4) (5) (6) (2) Reflects the amortization of the intangible assets acquired in the RSC, National Pump and NES acquisitions. (3) Reflects the impact of extending the useful lives of equipment acquired in the RSC and NES acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of such equipment. (7) (8) United Rentals Reflects additional costs recorded in cost of rental equipment sales associated with the the fair value mark-up of rental equipment acquired in the RSC and NES acquisitions and subsequently sold. Reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition. Primarily reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such restructuring program was initiated in 2008, we have completed three restructuring programs. We have cumulatively incurred total restructuring charges of $253 million under our restructuring programs. Reflects write-offs of fixed assets in connection with our restructuring programs. The tax rates applied to the adjustments reflect the statutory rates in the applicable entity. Executing for Growth and Returns 21#22EBITDA and Adjusted EBITDA GAAP Reconciliations EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment, and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the merger related costs, restructuring charge, stock compensation expense, net, and the impact of the fair value mark-up of acquired RSC and NES fleet. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies. The EBITDA and adjusted EBITDA margins represent EBITDA or adjusted EBITDA divided by total revenue. Management believes that EBITDA and adjusted EBITDA, when viewed with the Company's results under GAAP and the accompanying reconciliation, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that EBITDA and adjusted EBITDA help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA. $ Millions Net income Provision for income taxes Interest expense, net Depreciation of rental equipment Non-rental depreciation and amortization EBITDA (A) Merger related costs (1) Restructuring charge (2) Stock compensation expense, net (3) Impact of the fair value mark-up of acquired RSC and NES fleet (4) Adjusted EBITDA (B) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 $ 141 $ 134 $ 250 $ 226 88 83 140 138 113 132 207 239 266 242 514 485 64 64 126 131 672 $ 655 $ 1,237 $ 1,219 14 16 19 2 19 4 24 13 40 22 18 9 26 18 +A $ A) B) (1) Our EBITDA margin was 42.1% and 46.1% for the three months ended June 30, 2017 and 2016, respectively, and 41.9% and 44.6% for the six months ended June 30, 2017 and 2016, respectively. Our adjusted EBITDA margin was 46.8% and 47.8% for the three months ended June 30, 2017 and 2016, respectively, and 45.3% and 46.2% for the six months ended June 30, 2017 and 2016, respectively. Reflects transaction costs associated with the NES acquisition. We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. The historic acquisitions that have included merger related costs are RSC, which had annual revenues of approximately $1.5 billion prior to the acquisition, and National Pump, which had annual revenues of over $200 million prior to the acquisition. NES had annual revenues of approximately $369 million. United Rentals® 747 $ 679 $ 1,338 $ 1,263 (2) Primarily reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such restructuring program was initiated in 2008, we have completed three restructuring programs. We have cumulatively incurred total restructuring charges of $253 million under our restructuring programs. (3) Represents non-cash, share-based payments associated with the granting of equity instruments. (4) Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC and NES acquisitions and subsequently sold. Executing for Growth and Returns│ 22#23Reconciliation of Net Cash Provided by Operating Activities to EBITDA and Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, $ Millions Net cash provided by operating activities 2017 2016 2017 2016 $ 714 $ 643 $ 1,337 $ 1,247 Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA: Amortization of deferred financing costs and original issue discounts (2) Gain on sales of rental equipment 52 Gain on sales of non-rental equipment 2 Merger related costs (1) (14) Restructuring charge (2) (19) Stock compensation expense, net (3) (24) (13) ÊÇ| | ཀྴཔྱེ (4) (4) 98 102 3 (16) (2) (19) (40) Loss on repurchase/redemption of debt securities and amendment of ABL facility སྟྲ 7 | $8 (4) (22) (12) (26) (12) (26) Excess tax benefits from share-based payment arrangements 26 Changes in assets and liabilities (170) (232) (346) (350) Cash paid for interest Cash paid for income taxes, net EBITDA Add back: 87 150 177 219 58 56 59 3 $ 672 $ 655 $ 1,237 $ 1,219 Merger related costs (1) 14 16 Restructuring charge (2) 19 2 19 4 Stock compensation expense, net (3) 24 13 40 22 Impact of the fair value mark-up of acquired RSC and NES fleet (4) Adjusted EBITDA 18 9 26 18 $ 747 $ 679 $ 1,338 $ 1,263 (1) Reflects transaction costs associated with the NES acquisition discussed above. We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. The historic acquisitions that have included merger related costs are RSC, which had annual revenues of approximately $1.5 billion prior to the acquisition, and National Pump, which had annual revenues of over $200 million prior to the acquisition. NES had annual revenues of approximately $369 million. United Rentals (2) Primarily reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such restructuring program was initiated in 2008, we have completed three restructuring programs. We have cumulatively incurred total restructuring charges of $253 million under our restructuring programs. Represents non-cash, share-based payments associated with the granting of equity instruments. Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC and NES acquisitions and subsequently spld. Executing for Growth and Returns (3) (4) 23#24Free Cash Flow GAAP Reconciliation We define free cash flow as (i) net cash provided by operating activities less (ii) purchases of rental and non-rental equipment plus (iii) proceeds from sales of rental and non-rental equipment and excess tax benefits from share-based payment arrangements. Management believes that free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements. However, free cash flow is not a measure of financial performance or liquidity under GAAP. Accordingly, free cash flow should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. The table below provides a reconciliation between net cash provided by operating activities and free cash flow. Three Months Ended Six Months Ended $ Millions Net cash provided by operating activities Purchases of rental equipment Purchases of non-rental equipment Proceeds from sales of rental equipment Proceeds from sales of non-rental equipment Excess tax benefits from share-based payment arrangements (1) Free cash flow (2) June 30, June 30, 2017 2016 2017 2016 $ 714 $ 643 $ 1,337 $ 1,247 (694) (622) (913) (722) (33) (19) (55) (42) 133 134 239 249 3 6 7 26 53 $ 124 $ 165 $ 614 $ 792 (1) The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes. We adopted accounting guidance in 2017 that changed the cash flow presentation of excess tax benefits from share-based payment arrangements. In the table above, the excess tax benefits from share-based payment arrangements for 2017 are presented as a component of net cash provided by operating activities, while, for 2016, they are presented as a separate line item. Because we historically included the excess tax benefits from share-based payment arrangements in the free cash flow calculation, the adoption of this guidance did not change the calculation of free cash flow. (2) Free cash flow included aggregate merger and restructuring related payments of $29 million and $3 million for the three months ended June 30, 2017 and 2016, respectively, and $31 million and $6 million for the six months ended June 30, 2017 and 2016, respectively. The table below provides a reconciliation between 2017 forecasted net cash provided by operating activities and free cash flow. $ Millions Net cash provided by operating activities Purchases of rental equipment Proceeds from sales of rental equipment Purchases of non-rental equipment, net of proceeds from sales Free cash flow (excluding the impact of merger and restructuring related costs) $1,975-$2,175 $(1,550)-$(1,650) $475-$525 $(75)-$(125) $825- $925 United Rentals® Executing for Growth and Returns 24