Aaron Birnbaum: Yes, I think that’s accurate, Ken. There’s certain things that these large projects want, right? They want a lot of fleet. They want a high level of service almost always an on-site type operation. They want technology solutions to manage the fleet and account management. And there’s really only so many national large players in the rental space, they can provide all that. So, we do think we will, as others that are similar to us or big national players will be able to get outsized success on those big projects.
Ken Newman: Yes. And then just for my follow-up question here. it seems like you are tracking much closer to that 5%market share target that you put out in your Analyst Day, I think, back in 2021. Obviously, the fleet still feels pretty tight from an industry perspective. Do you have any updated views on what you think market share gain capture could be relative to 2022? Or how do you think about longer term market share?
Mark Irion: Yes, I mean we’re really happy to be moving that needle. Finally, that’s been a long process for the company, and there’s a lot of pride for us to be picking up another point in 2022. So, we’ll continue along. We’re obviously committing fleet and capital to growing as fast as we can and that should lead to market share gains, and we’re happy — very happy about that.
Operator: Your next question comes from the line of Sherif El-Sabbahy from Bank of America. Your line is open.
Sherif El-Sabbahy: Hi, good morning.
Larry Silber: Good morning.
Sherif El-Sabbahy: So, I just wanted to ask, 2023 will be another year of large CapEx spend. Do you be able — do you expect to be able to draw and inflect free cash flow positively? And if not, what’s the pathway to get there?
Mark Irion: Right. Yes. No, we’re looking at neutral free cash flow, I guess, at this level of fleet growth with our current level of EBITDA expectations before M&A. While we’re growing fleet in the high 20s that is a commitment of capital to growth and that does put a challenge on free cash flow. So, the trade-off is really how fast do you want to grow the fleet versus free cash flow. So, we are bidding on fleet growth and market share growth, and we’re doing that with improved margins and improved utilization and creating shareholder value at this stage and that’s the way we’re executing on the strategy. But it should be free cash flow neutral in 2023 before M&A.
Sherif El-Sabbahy: thank you.
Operator: Your next question comes from the line of Steven Ramsey from Thompson Research Group. Your line is open.
Steven Ramsey: Hey, good morning. I wanted to think about these mega projects some more. Are you able to cross-sell better just by the nature of these projects combined with your own internal improvements? Or do you have any initiatives there that maybe step up your — what you’re already doing?
Aaron Birnbaum: These big mega projects, they pop-up in different types of markets, sometimes they’re a little bit more rural than urban. But with our footprint that we have nationally, we’re able to support them, and they typically always want a full suite of types of products. So, the core fleet, which we’re investing heavily in. And then as they build those up, they do need a lot of climate and especially solutions because a lot of their — often they don’t have short power or permanent power inside the plant until it’s further down the road of being developed. And they also — depending on what they’re their operation is what they’re doing inside the plant, they often need a lot of climate key to our air conditioning de-munification until they get their permanent equipment installed. So, it’s a great project for the whole suite of services that we offer.
Steven Ramsey: Great. And then do these mega projects support greater growth in your national accounts versus local? And then to capture more of this mega project opportunity, do you feel like you could invest more in branches greenfield or acquisitions closer to where these projects are happening?
Aaron Birnbaum: The first question is, yes. Usually, it’s the big national type mechanically, electrical general contractors to go in to do these projects. But there’s always an element of local contractors that are supporting the project as well. So, it’s a great opportunity when you’re on those projects to work with that — all that customer base. And you often see the local customers get much, much larger and get more projects in the general area. These — as far as us — I believe your second part of your question, Steve, was are we focused on new locations in some of these metropolitan area where these big projects are? And I would say the answer to that is definitely yes. We invested — we did a lot of greenfield, a lot of acquisition activity in Texas, where we see a lot of this activity going on for one. So, we continue to strategically look at those opportunities for our footprint as it maps out with reshoring or big projects coming online.
Larry Silber: Yes. And also Steve, if a project is out in a rural market, we wouldn’t necessarily look to open a branch or do an acquisition in a rural market. What we would do is an on-site which would be for the duration of the project during its construction phase and operate from that type of a perspective. So, we’re not going to chase flagpoles and chase customers to open facilities that would be permanent overhead. We would look to have temporary overhead in those locations.
Steven Ramsey: Makes sense. Thanks guys.
Larry Silber: Thank you.
Operator: Your next question comes from the line of Seth Weber from Wells Fargo. Your line is open.
