North American Oil & Gas Pipelines

MAY 2018

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

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32 North American Oil & Gas Pipelines | MAY 2 018 On the other side, what factors may be limiting growth? What changes would help lead to more activity in construction? FLANNERY: Overall, the U.S. economy feels healthy — any discussion really needs to start there. More certainty around pro-growth tax policy and regulatory reform could help; we would expect that to spur our end markets in various ways. A federal infrastructure bill would augment the activity already underway at the state and local levels. What trends are you seeing in terms of equipment finance? FLANNERY: I don't know that we've seen much change. Capital remains available to credit-worthy companies. Used equipment values have remained solid; this gives banks and other sources of capital confidence in supporting our industry. What are the primary considerations when considering rent vs. finance? FLANNERY: There's a lot of support for a rental strategy when equipment isn't needed 100 percent of the time. For one thing, renting allows contractors to focus on what they do best, instead of taking on the costs of mechanics and parts inventories, and vehicles and drivers to transport the equipment. An equipment owner also assumes the logistical demands of buying, selling, storing and insuring the assets, in addition to emissions control and other regulatory factors. Most important, renting has big upsides in terms of productivity and safety. It's a way to get exactly the right equipment for the job while conserving capital and avoiding technological obsolescence. For the vast majority of our customers, the rental option makes their life easier and is an economically superior way to operate. How are the equipment needs of utility contractors different from the construction market at large? How does your company cater the needs of utility contractors? FLANNERY: We've had a lot of success addressing the varied needs of utility contractors with the breadth and depth of our fleet, which currently stands at $11.6 billion of original equipment cost. This includes our General Rental fleet and our specialty solutions of Trench Safety, Power & HVAC, Pump Solutions and Specialty Tools. We can function as a single-source provider to a utility contractor, offer technological advantages such as Total Control and online ordering, and serve that customer relationship across 49 U.S. states and all 10 Canadian provinces with our branch footprint. How has the equipment rental market evolved over the years? Where do you see it headed? FLANNERY: The rental business is a service business, but years ago people thought of it as being in the equipment space. That has really evolved — today, customers understand the role of rental in supporting worker safety and jobsite productivity. We see technology as enhancing that even more in the future. Our industry is becoming increasingly attractive to entrepreneurs and to talented men and women who are looking for a meaningful career. The equipment rental market was expected to reach $49.4 billion by the end of 2017 and well over $50 billion by 2021. Flannery

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