Earnings Call Excerpt
United Rentals Inc. (URI)
Q2 2009 Earnings Call
July 30, 2009 11:00 am ET
Executives
Michael Kneeland – President and Chief Executive Officer
William Plummer – Executive Vice President and Chief Financial Officer
Analysts
Henry Kirn – UBS
Scott Schneeberger – Oppenheimer & Co
Manish Somaiya – Citi
Emily Shanks – Barclays Capital
Philip Paselli – Cantor Fitzgerald
Chris Doherty – Oppenheimer & Co
Presentation
Operator
Welcome to the United Rentals Second Quarter 2009 investor call. (Operator Instructions). I would now like to turn the call over to Mr. Kneeland.
Michael Kneeland
Thanks, Operator. Good morning everyone, and thank you for joining us today. With me is Bill Plummer, our Chief Financial Officer, and other members of our senior management team. Bill will discuss our current capital structure and review our financial results with you. But first, I want to spend some time on our environment in operations, including the initiatives that led us to increase our targets for free cash flow and SG&A savings for the year.
As we reported last night, we now believe our free cash flow will be about $325 million, instead of the $300 million we had originally projected. We also expect to reduce our SG&A expense by $80 million to $90 million, which is about $40 million more than our original estimate.
Now both of these metrics reflect our ability to manage our business with discipline and purpose in a challenging environment.
Now as you will hear from us today, our second quarter story is one of sequential progress on key operational metrics in a market that is still declining, and that includes rates. But I also want to make it clear right up front that we're not satisfied with our current rate performance, even given the severity of this downturn. There are things that we can do to move our rates in the right direction and we're doing them, and I'll talk more about rates in a minute.
This construction cycle is more severe than any in recent history, but it will run its course. We have made a conscious decision to manage the company through the recession by balancing short-term and long-term goals.
At the corporate level, we are pursuing a strategy of long-term profitability that is based on customer service leadership and shifting our customer mix towards larger, more profitable accounts. At the branch level, our field operations are focused on managing daily performance and protecting key relationships.
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