Operator: Good morning, and welcome to the United Rentals Third Quarter 2012 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 release. For a more complete description of these and other possible risk, please refer to the Company's annual report on Form 10-K for the year's end December 31, 2011. As well as subsequent filings with the SEC. You can access these filings on the Company's website at www.ur.com.
Please note that United Rentals has no obligation and makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances, or changes and expectation.
You should also note that today's call will 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, Executive Vice President and Chief Operating Officer.
I will now turn the call over to Mr. Kneeland. Mr. Kneeland, you may begin.
Michael J. Kneeland - President and CEO: Thanks operator. Good morning, everyone and welcome. With me today are, Bill Plummer, our Chief Financial Officer; Matt Flannery, our Chief Operating Officer and other members of our senior management team.
The financial results we reported last night were strong. They reflect an operating environment with a solid level of demand and integration with RSC that is very much on track and most important, the successful execution of our strategy, as reflected in our margins.
Now, we'll talk about all three of these things today, but I also want to give you some of our current thinking about the months ahead. But before I begin, I want to remind you that any year-over-year comparisons we give you on a pro forma basis, as measured against the combined results of United Rentals and RSC for 2011. So, let's take a look at the quarter.
It incorporated the most intense three months of our integration plan. From July to September, we completed the harmonization of most of our major account relationships, realigned our sales territories and closed 126 branches bringing the merger-related closings to 187 so far. We deliberately set the bar high to get most of the heavy lifting behind us by September 30 and I'm very happy to say that we met that goal. While we're managing all that change, we generated a solid 9% increase in rental revenue year-over-year and $570 million of adjusted EBITDA at a 47% margin. That's a highest margin yet.
In addition we're running ahead of plan on cost synergies. We realized another $45 million of savings in the third quarter and we now expect to reach $100 million of realized cost synergies in 2012 to our ultimate goal of $230 million to $250 million on a run rate basis, our cost – our progress on the cost side and our magnitude of our flow through say a lot of our internal discipline in the quarter.