Thank you, operator, and good morning, everyone. Welcome to Herc Rentals fourth quarter 2023 earnings conference call and webcast earlier today, our press release and presentation slides were furnished in our 10 K was filed with the SEC.

All are posted on the Events page of our IR website. Today, we're reviewing our fourth quarter and full year 2023 results with comments on operations and our financials, including our view of the industry and our strategic outlook prepared remarks will be followed by an open Q&A.

Now, let's move on to our Safe Harbor and GAAP reconciliations on Slide 3. Today's call will include forward-looking statements.

These statements are based on the environment as we see it today and therefore involve risks and uncertainties. I would caution you that our actual results could differ materially from the forward-looking statements made on this call.

You should also refer to the Risk Factors section of our annual report on Form 10 K for the year ended December 31st, 2023. In addition, to the financial results presented on a GAAP basis, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance.

Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials. A replay of this call can be accessed via dial-in or through the webcast on our website.

Replay instructions were included in our earnings release this morning. We have not given permission for any other recording of this call and do not approve or sanction any transcribing of the call.

Finally, please mark your calendars to join our management meetings at three conferences this quarter, JPMorgan titled conference on February 27th in Miami, Evercore's Industrial Conference in New York on March fifth and Bank of America's Industrial Conference in London on March 20th. This morning, I'm joined by Larry Silber, President and Chief Executive Officer, Aaron Berman, Senior Vice President and Chief Operating Officer, and Mark Humphrey, Senior Vice President and Chief Financial Officer.

I'll now turn the call over to Larry.

Thank you, Leslie, and good morning, everyone. Please turn to slide number 4; 2023 was another year of double-digit growth for Herc Rentals.

We delivered a record level financial performance across the board. Equipment rental revenue grew 12% on top of 34% growth in 2022; strong pricing of nearly 7% supported the record top line performance and more than offset inflationary pressure.

Demand remains resilient and our diverse end market mix sets us up to take advantage of the most robust sector opportunities like data centers, energy, semiconductors, transportation, healthcare and education, to name just a few. The diversification was important in 2023 as the shutdown of the studio entertainment business that resulted from the prolonged writers and actors strikes had an adverse impact on rental revenues.

In fact, excluding our silly studio entertainment business, rental revenue would have been up 16% year-over-year by capturing an outsized share of market volume and focusing on rate growth and operating efficiencies. Adjusted EBITDA at a record high, increasing 18% over the prior year or 24% when you exclude Cegelease.

Reported adjusted EBITDA margin in 2023 was impacted by substantially more lower margin used fleet sales. Fleet disposals, I'd only say increased more than 150% in 2023 compared with 2022 as the supply chain recovered in the first half of 2023 and backwater of new fleet became available.

We finally were able to begin rotating out of our oldest equipment. If we exclude center lease adjusted EBITDA margin would have been 10 basis points higher year-over-year.

Similarly, synergies represented a drag on ROIC of about 130 basis points in 2023 in October; you'll recall we announced plans to explore strategic alternatives for synergies. There's not a lot to share until the transaction is complete, but the process is underway and moving along the normal course.

Now on slide number 5, you can see that the successful execution of our growth strategies contributed to our outsized performance relative to the overall industry last year. As we continue to scale our business for sustainable growth.

We invested in expanding our branch network by completing 12 strategic acquisitions with 21 locations and additionally, opening up 21 greenfield locations in key markets in 2023. We also invested in our high-margin Pro solutions fleet to address growing demand capture and cross-selling synergies and support new specialty locations and our innovative customer-facing digital capabilities were the catalyst to several new project wins last year, especially at the national account level.

In the fourth quarter, we conducted our annual culture and engagement survey. The results reflected an improvement in our employee Net Promoter Score that moves us further into the top tier benchmark range.

This is a metric I look at very closely with our managers we recognize that our employees are the foundation of our company. They drive our success and high employee satisfaction correlates closely with high customer satisfaction.

Finally, between fleet investments, strategic M&A, dividend growth and opportunistic share repurchases. I'm confident that Herc is allocating capital in the right areas and at the right time.

Now, let me talk a little about 2024 on slide number 6 and how we're thinking about growth today, we're operating from a much stronger position than in any time in our history with better systems and processes, more diverse end markets, a broader portfolio of products and a growing branch network, economies of scale and a solid balance sheet as one of the largest equipment rental providers with coverage across North America, our size, resources and operational excellence are giving us a significant advantage in the marketplace. Tactically for 2024, we'll continue to capture mega project opportunities, focusing on those that are a benefit from our existing customer relationships.

They are opportunistic geographically or with potential new customers and finally are manageable within our bandwidth so that we can continue to deliver superior service we'll also continue to focus on scale and market share growth, expanding our acquisition targets to the top 100 MSAs and opening roughly 30 more greenfields as our strategy to accelerate growth. It's imperative that we remain nimble, innovative and responsive for our customers.

Our new operating system called E3OS [ph] is designed to ensure we're consistently delivering value throughout all areas of the Company in a way that differentiates our service in the marketplace. Company-wide rollout plan 43 outlets is in place and putting the tools into practice is an important goal for 2024.

We'll also continue to shift our channel mix of used equipment sales into the higher return retail market this year, and we'll talk a little bit more about our progress on that front. And finally, fleet efficiency is a high priority for 2024 for our field operations team members who understand the role of continuous improvement and a best in class culture with the disruptions from the film and TV labor strikes and the out of season supply chain deliveries behind us, we see a clear path to delivering margin expansion and ROIC improvement in 2020 for foundation we have built is solid, and we're excited for the opportunities in the year ahead.

With that, I'll turn it over to Alan to take you through the fourth-quarter operating details and provide some of the high-level operational drivers for this year. And then, Mark will walk you through the Q4 financial metrics and share our targets for 2020 for Aaron.

Thanks, Larry, and good morning, everyone. Record fourth quarter results for revenue and adjusted EBITDA served as a great conclusion to a year marked by agile execution, geographic expansion and new account wins.

I'm really proud of the way our team continues to focus on delivering superior products and services for our customers while executing well against our strategic growth initiatives. Execution starts with safety.

And of course, safety is always at the core of everything we do. As you can see on slide 8, our major internal safety programs focuses on Perfect Days.

We strive for 100% Perfect Days throughout the organization in 2023 on a branch-by-branch measurement, all of our operations achieved at least 98% of days as perfect equally notable, our total recordable incident rate remains better than the industry's benchmark of 1.0, reflecting our high standards and commitment to the safety of our people and customers. On slide 9, you can see that we're making great progress on our urban market growth strategy by expanding through greenfield locations and acquisitions in 2023, we spent $430 million in net cash last year on 12 acquisitions for those transactions came in the fourth quarter where we added seven acquired locations to our network on top of a greenfield locations.

For all of 2023, 42 new locations were open for acquired, of which 26% were specialty locations; further expanding our high-margin offering and solution selling capabilities. As you know, we are focused on opportunities in high-growth markets that complement our current branch network and fit our strategic financial and cultural filters Moreover, many of the mega industrial projects being announced are in the geographies where we have focused our acquisitions and greenfield additions like Texas, Ohio, Arizona and in the southeastern United States our acquisition process is now a core competency having successfully integrated 43 businesses with 88 locations into the heart network.

Since initiating the strategy in late 2020, we have efficiently onboard at these companies, teams, equipment, operations and customer accounts to rapidly add value to our operations. As a result of revenue synergies, we've been generating synergized multiples of approximately 3.5x, 2.4x, 0.5x [ph].

This gives us confidence as we explore and evaluate new opportunities and a robust pipeline for 2024. We have earmarked another $500 million for acquisitions.

On slide 10, in addition to acquisitions, growing our core and specialty fleet through new equipment investments is a key strategy to expanding our share and keeping up with increasing demand opportunities; you can see our fleet composition and what we see on the right side of the page. Total fleet is now a record $6.3 billion as of December 31st, 2023 center lease fleet represents about 5% of the total.

So when you exclude the center lease assets held for sale are basically would have been about $6 billion at year end. You'll note that high-margin specialty fleet represents approximately 24% of the total beauty rate.

Excluding the center lease fleet, specialty makes up about 20% of the total with plenty of room to continue to grow when it comes to last year's fleet investments after receiving a significant amount of back order fleet in the first half of 2023 as the supply chain recovered. And you can see we slowed our intake in the back half spending just 39% of the total annual investment versus 52% in the second half of 2022.

Total fleet expenditures for all of 2023, including deliveries of the 2021 and 2022 backwater fleet are in line with overall 2022 spending. How we see fleet disposals last year were up 150%, reflecting the supply chain's ability to improve production levels, allowing for more fleet rotation into a healthy used equipment market.

Our team did an outstanding job of working to close the timing gap between seat growth and revenue growth last year for used sales, we continued to gain traction on our retail channel capabilities, utilizing technology training and sales force incentives to participate more in the higher return channel the amount of fleet at OEC that we sold to retail customers was a record for the company in 2023. For 2024, we are planning to spend in the range of $750 million to $1 billion on new fleet purchases.

That gross amount, along with last year's growth fleet purchases should provide for incremental demand from greenfields general market expansion and the mega projects that are either underway or that we have high probability line of sight to it should also cover about $550 million to $650 million of planned fleet disposals, Edah we see in 2024 based on our fleet age threshold by category class. This year's disposals are expected to follow a more typical cadence with used fleet sales weighted more towards the first and fourth quarters.

We also expect new fleet deliveries to return to our more normal seasonal schedule ramping up in the second and third quarters. Now, the supply chain production capabilities have improved.

Turning to slide 11, our fleet is well positioned to address the needs of large national accounts and local contractors operating in North America. Local accounts, which represented 57% of rental revenue in the fourth quarter are growing due to Hertz penetration through our acquisition and greenfield strategy, as well as regional growth in infrastructure, education, facility, maintenance and repair and local utilities.

Our national accounts are benefiting from General Growth areas like data centers as well as the federally funded opportunities that are ramping up organizing our national sales reps by end market verticals is also elevating our capabilities and enabling us to increase our presence in under penetrated end markets. Long term, we'll continue to target a 60 40 revenue split between local and national accounts.

Turning to slide 12; the equipment rental market is continuing to benefit from strong demand across a variety of end markets, customer segments and geographies in 2024, and this diversification provides for growth and resiliency. You can see here that Herb is positioned well for trending opportunities as the federal and privately funded mega projects, large infrastructure jobs and a domestic manufacturing build-out continues to gather steam.

These megaprojects represent the beginning of a multiyear flow of dollars into the industrial and infrastructure space and is one of the largest players in the rental industry. Our fleet capacity, digital capabilities, on-site management expertise and broad location network sets us up to outpace the rental market's projected growth.

Finally, on slide 13, our opportunities for driving revenue growth and increasing profit margin in 2024 are broad-based. We expect to continue to capture the ramp up in the mega-project tailwind to expand share.

We are going to leverage proprietary tools, industry benchmark data in our value added services to ensure our pricing remains resilient. Larry told you that one of our priorities this year is optimally managing fleet efficiency.

And that means that we're going to be laser focused by end market project and geography and allocating our fungible fleet to those locations with the greatest demand. Of course, we are also going to continue to build scale through greenfields and acquisitions.

We have already completed our first acquisition in the New Year and the pipeline remains strong. Several greenfield locations also have been identified for openings in the first quarter.

We'll continue to leverage our industry leading Pro PATROL next-gen e-commerce, logistics and business management system this year to enhance customers' productivity and overall rental experience. And C3OS [ph] is another opportunity to standardize processes and elevate the customer experience being easy to do business with an expert at and efficient at what we do will continue to make us the equipment rental supplier of choice.

I want to thank Team Herc for their commitment to operational excellence and safety. Their professionalism shows up in execution of our services to our customers every single day, and they are a valuable differentiator for Herc.

Now, I pass the call on to Mark.

Thanks, Aaron, and good morning, everyone. I'm starting on slide 15 with a summary of our key metrics for the fourth quarter.

Larry touched on the full year 2023 line items. So I'm just going to provide some color on the fourth quarter for rental revenue, about two thirds of the growth was organic and a third came from acquisitions.

Doe and SG&A as a percent of rental revenue improved 80 basis points in the quarter, supporting improvements in adjusted EBITDA margin and a flow-through of roughly 65%. The adjusted EBITDA margin of 48% was a 70 basis point increase year-over-year.

Let's walk through some of the other key performance drivers on Slide 16. Here, you can see the rental revenue and adjusted EBITDA walks from four Q 2022 to 4 Q 2023.

And the revenue chart, the roughly 5% increase year-over-year was made up of 5.8% increase in rate and a 9.4% increase in OEC. fleet on rent mix was an offset of about 10%, reflecting the impact of center lease and higher equipment inflation.

When it comes to revenue, the mix impact for inflation adjust the volume measured in OEC dollars [ph] to a unit increase year-over-year. Inflation accounted for approximately 50% of the mix impact.

As we mentioned in October, the 2023 fourth quarter had a difficult comp due to hurricane and generating rental revenue in the 2022 fourth quarter, that was about two times higher than typical weather related events. Comparatively 2023 had no major weather catalysts, resulting in a fourth quarter rental revenue headwind of approximately 3% year-over-year.

Similarly, and as expected, dollar utilization of 40.9% in the 2023 fourth quarter was lower than the 43.5% a year earlier, primarily as a result of the drop off at Studio Entertainment revenue, which accounted for 170 basis points of the year-over-year difference as well as the tough weather comp in the fourth quarter. We also continued to right-size the fleet with less onboarding of new fleet and higher rotations as is typical for the off-season.

Moving to the adjusted EBITDA waterfall chart on the right profit benefited from higher rental revenue and significant leverage from lower operating expenses as a percent of revenue for the studio Entertainment's top line weakness on its fixed cost base was a partial offset, especially as we brought back furloughed workers at the end of the strike in November without the associated revenue ramp. Also, the 2022 fourth quarter benefit from hurricane E and unadjusted EBITDA was more than double a typical weather related benefits in comparison with no benefit in the 2023 fourth quarter.

Adjusted EBITDA margin in the quarter was flat year-over-year, but up 50 basis points excluding center lease, despite the typical drag from lower margin used fleet sales. Our summary financial results on Slide 17 exclude Studio Entertainment from both periods.

In order to give you a better sense of how well the base business performed in the recent quarter and full year. For example, rental revenue growth would have been approximately 300 basis points higher in the fourth quarter than the actual result and our already record level.

Our EBITDA margin was stronger by 90 basis points at 48.9% with a flow through of 60.7%, which is more than 580 basis points better than the prior year. A full reconciliation of quarterly performance metrics, excluding Studio Entertainment, can be found on Slide 28 in the appendix of our presentation.

Shifting to capital management on slide 18, you can see that we have no near-term maturities and ample liquidity to fund our growth goals as we continue to allocate capital to invest in our business and drive fleet growth into this cycle. We remain confident in our business model and are committed to increasing shareholder value.

In the fourth quarter, we declared a quarterly dividend of 63 and a quarter cents, which represents $2.53 per share for the year. Last week, we raised our annual dividend 5% or $0.13 per share to $2.66 per share for net capital expenditures exceeded cash flow from operations in the year ended December 31, 2023, with cash outflows of $65 million before acquisitions.

Our current leverage ratio at 2.5x is well within our two to three times target range and in line with our expectations as we invest in growth. Moving on to slide 19, you can see the continued strength in our primary end markets.

In the upper left, the ARA estimate for 2020 for North American rental industry revenue is $82 billion or 6.5% growth over 2023 on the bottom left as the Architectural Billing Index, which reported below $50 billion [ph] in December. It's not unusual to see the Billings Index be choppy in the back half of the year, but saw a similar trend in 2022.

ABI is just one indicator of future construction activity. We will continue to monitor it in conjunction with other data points over the next 12 months between two of our key markets, our industrial and non-residential construction.

Combined, these markets reflect about two thirds of our customer base and both are likely to outperform other consumer-driven end markets due to new mega project construction and as the re-shoring of U.S. manufacturing capacity continues to gather steam.

Taking a look at the industrial spending forecast on the top right; industrial info resources is projecting the second highest level on record for 2024 at $408 billion on top of last year's peak $413 billion spent in the lower right corner quadrant is Dodge's forecast for non-residential construction starts. You can see in 2024 starts are estimated to increase 4% to $458 billion.

The dotted line on both of these charts reflects growth over pre-pandemic levels. You can see that last year and the next three years are projected to be the strongest periods of activity that this industry has ever seen.

Additionally, there's another $342 billion in infrastructure projects slated for 2024; that's a 7% increase over 2023. If you flip to slide 20, you can see that our guidance highlights our plan to continue to outpace market growth again in 2024.

As noted, guidance is presented on an organic basis and excludes the performance of center lease, which is held for sale and is expected to close in 2024. Our intention is for net fleet CapEx to be between $500 million to $700 million, supporting dollar utilization improvement and 7% to 10% organic equipment rental revenue growth, used equipment disposals at OEC in 2024 will moderate by 20% to 30% versus the 2023 level.

Last year's catch-up rotations allowed us to optimize our fleet age, and we like where we currently are sitting 45 months. Our young fleet gives us advantages in the marketplace and flexibility if market conditions change.

Our initiation of rental revenue guidance at 7% to 10% growth is intended to provide a reasonable range based on projected market growth, which is about 6.5% for 2024, as well as heard specific incremental opportunities from greenfields and the mega projects in our pipeline. We feel good about this range based on our current visibility, more experience with the pace of the mega-project rollout, the return to more normal growth trends in the local market.

And of course, feedback from our team in the field, while inflation on new equipment purchases for 2024 has moderated. It is impacting our total fleet by approximately 5%.

We exited 2023 with a mid-single digit price increase for 2024. Our goal is for pricing to offset any inflationary pressure benefiting from operating leverage.

We estimate adjusted EBITDA will be between $1.55 billion and $1.6 billion, representing another year of profitable growth, ranging from 6% to 9% when comparing the adjusted EBITDA growth rate with the equipment rental revenue growth rate to roughly 100 basis point difference is our expectation for a lower amount of used equipment sales versus 2023. Overall, the strong demand we're experiencing across the manufacturing, industrial and infrastructure markets, along with the stability that comes from industrial and commercial maintenance projects is consistent with an industry and an upcycle.

And our guidance reflects that we intend to continue to deliver strong financial metrics as we execute on our proven growth strategy. With that, I'll turn the call back to Larry.

Thanks, Mark. And now please turn to slide 21.

Everything we do starts with our vision, mission and values and our purpose statement and focuses on equipping our customers and communities to build a brighter future. We do what's right?

We're in this together, we take responsibility. We achieve results and we prove ourselves every day.

With that, operator, we'll take our first questions.

Morning. Maybe I'll start with on the local business.

Given it's a 60% revenue split for you guys, it looks like the growth may have slowed to the mid-single digit range the past couple of quarters and a peer recently talked about positive local markets growth, but a step down from prior periods, maybe talk to the local market growth assumed for 2024 versus the national market growth and maybe where those two come in versus kind of the market outlook of 6.5 [ph]?

Yes, Stephen, this is Aaron. Our investment in greenfields and the acquisition investments really is a is our strategy to grow our local market density in those local markets, um, we see that is continue to be a growth vehicle for us in 2024.

And our sales teams are very focused on acquiring new business for all of our branches every week that they're out there and I feel talking to customers. So it's a big part of our strategy, and we think that will continue throughout the entire year.

Okay, helpful. And then just thinking over the past couple of years, pricing was strong in both years and you executed on EUR470 million of acquisitions.

Average out with a similar kind of pace for this year expected.

What I'm getting at is how does the impact of bringing in these new acquired companies contribute to your pricing over the past couple of years? And how do you expect that to impact pricing in 2024?

Yes. I mean, I think generally speaking, our acquisitions are sort of revenue-based synergies right.

So typically, yes, time, new pricing, et cetera, are probably below that of the consolidated numbers. And so there's opportunity and that's what we see is opportunity as we as we think about those acquisitions, I think it probably takes on hold probably a year or so to get their pricing up to the consolidated sort of hurt pricing.

Yes. I'm so sorry, Larry.

Good morning. So my first question is just on your ability to get more out of the fleet.

It's been there's a lot going on with synergies and with the COVID and new equipment coming off schedule and things like that. But where are you this year on 3Q and 4Q versus what you thought you could do on time utilization and embedded in the guide and or just in general, are you at a normalized level now?

Do you have room to improve that off of the disrupted this year with the equipment coming in at different times you just talk about time you permit it, if you're if you're willing to?

Yes, great question. And I think when you think back over the last couple of years, right, 2022 too hot on supply chain dynamics in 2023.

If you kind of think about those as the goalposts on, I think our drive for 2024 is to be somewhere in the middle between those two, some years. And I think that sort of where and what Aaron was talking about when we think about fleet efficiency, I think the other point that I would make is when you look at our end fleet average fleet and for 2023, you really have about $250 million or so of fleet to put to work.

So that's embedded in your fleet by 2023. But we're almost thinking about that more along the lines of 2024 fleet by as we put that fleet more efficiently to work in 2024.

Okay. That's super helpful.

And this one, maybe a bit of an oddball, but you know, that inflation factors pretty high. And one of the things we thought was a bit of a positive is that, you know, the industry needs to get price or a rental rate and then to the larger companies, you guys have plenty of cash flow.

So you can spend on fleet, smaller companies, private companies may have lower margins and probably need to price even more in order to grow. You guys look at a lot of acquisitions.

You've done a lot of acquisitions. What are you seeing on your regionals and locals on their ability to grow fleet in real in real terms, I'm assuming in this kind of equipment inflation environment?

Yes, Rob, Darren, again, on the acquisitions that we've been involved with, it took them a while to get their fleet, right? So they might have ordered their fleet in 2020, 21.

It took them a long time to get the fleet. They finally did start to get their fleet, but the pricing they were paying was very elevated.

And I think they had sticker shock in there. We're slow to adopt the fact that they have to get a higher rental rate, but in most cases, they don't have the systems or the diligence to do it.

So they're just kind of trying to find that that Tyler muscle memory to execute their, but often their customer base was accustomed to certain type of a price point. So I think it was a challenge for them, but the fleet finally start to come in for them.

But the pricing dynamics that we are really equipped with they really were struggling with.

Rob, I think the other point that sorry, the -- I think the other point I would make there too. Is that elevated pricing on there and then elevated interest rates in order to pay for that elevated pricing power?

I think it does support on a disciplined and healthy pricing environment for 2024.

Okay. Thank you.

Yes, hi. Good morning.

And I am wondering I'm wondering if you could just expand the discussion on synergies. You obviously were best in the business of the shortfall versus guidance in the midpoint for the fourth quarter.

Can you talk about how much of that with synergies and, you know, obviously we'll see what the proceeds are, but given the good free cash flow this year, plus the potential proceeds, should we be thinking about deleveraging versus M&A? That's higher than $500 million?

And then the last one luminaire on a related basis is given a drag on dollar utilization from City leases, it fair to think about just the natural tailwind to dollar utilization of about a point to point-and-a-half 2024 versus 2023 as the assets come out of the fleet. Thanks.

Right. There were there was a bunch there, Jerry, outside unpack all of those on.

First, in terms of sort of the overall impact of center lease to the business in 4Q. If you just want to and I guess maybe first on page 28 through 32 in the deck has sort of splits by quarter, um, within without center lease.

And but when you just look at 4Q on a stand-alone basis, there was about just call it, $15 million of EBITDA impact year-over-year on that sort of fell through the bottom of the business? From a centralized perspective, and I think quite honestly, when you think about that from a dollar perspective, dollar utilization impact in 4Q is probably 170 basis points give or take.

And I think that, you know, it is hiding some of the poor performance of the business. And so that's one of the reasons, Jerry, that we're going to guidance in 2020 for sand center lease.

And so may take a little bit of updating your models and the like. But we think sort of getting a like-for-like view at the core level is the right way to look at it.

So that does mitigate some of your dollar variance when you sort of adjust to the dollar utilization of the core. And for 2023, there isn't as big a jump there.

Once you take 70 cell utilization as far as on a utilization of the proceeds from the business when it's completed, will initially go to pay down our ABL and reduce our exposure there. And then we'll it will sort of roll into our normal use of capital.

I'm in the business, if it's super.

Thank you.

Can I just ask one more on the pricing cadence? Normally in the industry, October, we get a sequential price increase and we give some back in November and December market.

Can you just talk about how that looked this year and what pricing, it looks like into January, if you can comment sequentially. Thank you.

Yes, no, good question, Gary. I mean, obviously we posted a five eight for the quarter and that reflected sequential price pricing improvements each month of the fourth quarter.

And that takes us as we exit January will be in the mid-single digit range. And I think the only other point I would make is we've stated that our goal is to negate and the inflationary impact to the fleet through pricing, and that's the goal for 2024.

Thank you.

Hi, guys. This is Larry [ph] as to this process this morning.

Thanks for taking the question. I just wanted to ask about your traction into the megaprojects specific, what's your visibility into the project pipeline?

How does that compare to a couple of years ago? And you know, if you could talk about some of the geographies that these projects are in and the competitive process, if you will banks?

Yes, sure. Larry, on the mega arena is still plenty of starts coming out every month.

It's healthy. You see kind of a lag and given takes on start dates, sometimes there's challenges with getting the labor on some of the permitting but I mean, there is plenty of big projects in all the other sectors we talked about coming out and we see that we track that on a monthly basis.

And I would say it's super healthy environment for that arm. It seems as though many that were kind of talked about over the last 12 months or are coming that starts right now, in the first quarter this year.

So I think it's a very vibrant, strong environment for the mega arena.

Got you. And you guys talked about supply chain, you know, loosening up, but still some constraints with some of the PPCP.

to elaborate a little bit more on that and what your expectations are for 24 or are we still expect to see some cost some holdup there?

Yes, great question. I'd say by and large, vast majority of the supply chain is back to normal or near normal kind of operating metrics somewhat similar to 2019 in the access area, meaning aerial work platforms in particular and reach forklifts.

Some of the major vendors that we deal with are still have extended lead times on it come in a bit and are certainly more reliable on when they give us delivery dates. But we're still not going to be able to get everything.

We'd certainly like to get them for this season. So we're out somewhat helpful in our discussions with them that are there what I'll call close plants, meaning our plants are put in place and in Latin America or Mexico in particular, will improve income come back stronger.

We'll have a better supply resource from them, and we're looking forward to that improving, but we'll operate with some constraints in that area for all of 2024.

Got you. Thanks for your time, guys.

Yes, good morning. Thank you and one more from me, please.

And how with at least around the CapEx guide for next year, I wonder if you could sort of fit that into the medium term framework on CapEx that you provided back in September and the sort of cadence you're anticipating for 2024 and you're trying to drive together sort of your answers to some of the previous questions around the end market outlook and the opportunity for better time you'd and how all of those things sort of have influenced your thoughts in that in the intervening four or five months since it since you gave the medium-term guidance? Thanks.

Yes. I mean, I think you start with from seven to 10 our rental revenue guide rate and sort of that, that takes you into your fleet needs for the year, knowing full well that we've got some fleet efficiency gains that we're looking for, both from the end fleet as well as from a time utilization perspective.

So I think the guide implies that seven 50 to $1 billion of gross CapEx spend. That's not and we're not saying that that's the end-all, be-all.

We will update you as things change. And so the last part of your question, Neil, was around what we're just really, I suppose.

Yes, it has the cut to that space as the end market and panned out broadly as hadn't anticipated it would. And with the sort of what looks like sort of lower CapEx expectations reflect more and opportunities for efficiency then and you have less optimism around the end?

Yes, I don't think it's I don't think it's a statement on the end markets. I think it's more a statement on us wanting to get obtain fleet efficiency.

And I would say demand is normalizing. End markets are strong and so I don't think it's anything more than us being prudent and diligent from a fleet efficiency perspective.

Yes. And I would add to that, Neil, with the OEMs becoming more normalized themselves and having shorter lead times.

If there are spikes in demand, we can always get gear on a shorter story overall or shorter basis. From a lead time perspective, sometimes we can get it within a matter of days or weeks as opposed to months or years in the past.

So our ability with a normalized OEM supply chain really helps any sort of moderations in the end-user market.

Got it. Thank you.

And then, just to come back to the pricing outlook that you gave -- I and thanks for the sort of help on the initiatives that you're able to apply to your acquired businesses. But in your experience you are and I think you talked about sort of sticker shock with some of those and businesses had faced.

Do you think that, you know, outside of your sense that sort of outside of those businesses you've acquired and also the smaller end of the market that and you know that the broader industry is sort of responding more constructively to add to upward cost pressure? Or is that only really when you come on board that you see the changes take place?

No, I think it's odd to every is trying to act in a disciplined manner, thereby understands the cost of capital. And as Mark said, some markets are normalizing but they're healthy and solid.

But as far as getting the returns on capital, I think the entire industry is operating in a disciplined way.

Fantastic. Thank you very much.

That's really helpful.

Thanks, Neil.

You want to learn more and I just wanted to go back on marketing. You mentioned core CAD, you'd is probably the right way to think about modeling the business going forward, given all the moving pieces, the synergies I'm sorry if I missed this, but is there a way to think about how you think about the cadence for that metric as we move through the year, you put up a 42 percentage change this last quarter, is that approach a mid-40 [ph] number by the end of the year or a little too difficult?

No. I mean, I think, you know, obviously the seasonality or cyclicality of the business within the year, right?

Your 4Q, 3Q and 4Q dollar yields will be the high watermark for the year. We finished this year at 42.5% sort of dollar You, of course.

And I think as we said and sort of anticipated in the guide is an improvement of that average, 42.5 will be improved in 2023 just from the fleet efficiency, some metrics that we're putting in internally.

Okay. That's helpful.

And then for my follow-up, this is more of, I guess, more of an accounting question, just to clarify that we're often a level set on the expectations. Obviously, generally, I know it's kind of hard to pin down on the timing of when you expect to sell that asset.

But I'm curious just to clarify, we're not expecting to put that into discontinued ops here in the income statement for 2024, correct?

No, that's and that's right. I mean, it'll sit out there as available for sale.

I think on a while. GAAP is GAAP on and we'll report that way until we and move it off our books.

We'll have a on a more port pro forma view of the core business as we as we walk into Q1 reporting app as we're not providing center lease inside of our guide for 2024. So we should expect that if there was a recovery instantly, you would exclude any kind of impact just to make it apples to apples with your guide?

That's exactly right. We'll report on apples-to-apples.

Got it. Okay, that's very helpful.

Thank you.

Thank you.

Good morning. Thank you for taking the question.

I want to go back to a question that Neil asked a moment ago on cash. I'm kind of trying to wrap my mind around what some of what what's baked into 2024 because it I remember your target that you set out for 2026, implying a little north of $1 billion per annum of net cabinet.

Obviously, you're guiding for something that's substantially lower. So I guess two questions here.

Why is that happening first? And then second, what are the areas where you're investing less than you did it 2023?

Yes. I mean, I think that the guide, the three year guide rate was sort of set on a 10% to 14% on average growth rate for that three-year period.

Right? Our guide here is on in that 7% to 10% range based on our current visibility into 2024.

And so I think correspondingly, if you think back to ARM, the overall guide from November at Investor Day, that was like a 3-ish [ph] sort of number over the three year period. And this is implying something more along the lines of $600 million to $700 million at the midpoint of the of the fleet guide.

So that's really the difference there, Mig, is the 10% to 14% versus 7% to 10% [ph], Tom; and it is year one.

Okay. I think I think the second part of your slides you had a second part of that question about where the areas we're investing less than and we've mentioned previously in the last hour that the access aerial and material handling areas we really can't get enough of the fleet that we want those up.

Manufacturers can provide us as much as we want, as Larry mentioned. So we would take more if we could.

But those are some of the areas with where we are. It can't get as much as we want.

And so that would imply that maybe earthmoving or some other specialty areas is maybe where the lower investment is. No, no, it's just that if we could obtain more aerial access material handling, we would invest more there.

Okay. And then, then sort of the final question for me is on the business mix itself.

There's been obviously a lot of growth past couple of years, and we're talking about infrastructure and we're talking about mega projects. But if I sort of look at your mix national versus local or even within contractors versus industrials versus your other verticals, there hasn't been much, much change that I see and that I can see.

So I'm sort of curious, and do you expect the business mix to continue to remain constant or would that change over the next couple of years?

Well, look, we are trying to remain diversified and grow all of our verticals at a similar pace so that we're not dependent on any one segment of our business relative to if there's ever a downturn or ever some type of an event that causes one to go down, we're going to be well balanced across the board in all of our verticals. So I don't think that implies anything other than a very balanced growth business that is able to be very nimble and adjust to marketplace dynamics and changes and take advantage of opportunities on hot markets it.

Hi, thank you for the time on the net rental CapEx, right? As percent of your EBITDA I'm sorry, of your rental revenue guide.

It is the lowest we've seen in 10 years except for the pandemic initial year. But when I look at the average of the last four years, right, including the guide in the prior three, you sort of back to normal, you sort of back into not 29%, 30% [ph] net rental CapEx to your rental revenue.

So just to be clear, it sounds like you're saying, yes, we're just sort of normalizing it And hey, it could go a little higher if we can get more areas. But when we think about 25% and 26% [ph] is should we still be thinking about net rental CapEx in that 25% to 30% of how you think about your rental revenue growth just for framework, just to make sure enough.

And then also maybe I missed it. The used equipment sales, the margins for 24 that is baked into the guide.

Just curious how you're looking at those margins and maybe if you can help us on the revenue they use sales as a percent of what we see being sold?

Yes. So I'll take the second first.

On the used equipment side, right? We sort of closed out the year with, I think, about 44 at cents on every dollar of OEC.

from a disposal perspective. And I think if you sort of look through the guide, it's probably not slightly north of that in the implied guide for 2024.

And I think that's really coming about as weak shift out of that auction channel into a more retail and wholesale focus on sales mix. I think that's supportive of a slight increase from a I know we see proceeds perspective.

That makes sense. Yes.

And I missed the margin comment on that IP autos, but at the margin assumption?

Yes. I mean, you've got you've got some you would have some slight increase in your margin.

Obviously as a percentage of your revenue come in 2024, that number is going to go down, right? I'm selling somewhere between 20% and 30% last year.

So you'll get some EBITDA lift there just from a mix perspective and let me sort of partially take the CapEx guide. You're absolutely correct.

We're into a more normalized environment and our visibility is very good now, certainly over the short term. And as our visibility improves.

And some of these megaprojects and reshoring projects are multi-year projects and they're going to ramp up over time. And we can always because the supply chain is much healthier than it's been over the last three years.

We always have the ability to ramp up that CapEx intake as we experience improvements on the on the rental revenue side, yes, I'm not trying to have you give a 25 CapEx guidance, but making sure I hear from you that this is below 20% net rental CapEx to expected rental revenues is below trend because you were above trend kind of normalcy.

But if I think about 25 and 26, just to get a sense of your confidence in the growth beyond 24. I was just curious if you're willing to say like now you should expect net rental CapEx and 25 in that normal 25% to 30% of whatever you think the rental revenue was?

Yes. Yes David, I don't think that's unreasonable.

I think that I think that's a reasonable assumption.

I appreciate it. And thank you for the time.

Thank you for joining us on the call today, and we look forward to updating you on our progress in the quarters to come. Of course, if you have any further questions, please don't hesitate to reach out reach out to us.

Have a great day.