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United Rentals Announces Third Quarter 2012 Results

United Rentals, Inc. (NYSE: URI) today announced financial results for the third quarter 2012 1. Total revenue was $1.219 billion and rental revenue was $1.051 billion. On a GAAP basis, the company reported third quarter 2012 net income of $73 million, or earnings of $0.70 per diluted share. Adjusted EPS 2 for the quarter was $1.35 per diluted share. The company’s effective tax rate for the third quarter 2012 was 22.3%.

Third Quarter 2012 Highlights 3

The following year-over-year pro-forma comparisons assume the combination of United Rentals results and RSC results for the third quarter 2011:
  • Adjusted EBITDA 4 was $570 million and adjusted EBITDA margin was 46.8% for the quarter, an increase of $124 million and 700 basis points, respectively, from the same period last year.
  • Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was 126.5%.
  • Rental revenue increased 8.9% for the quarter, reflecting an increase of 7.9% in the volume of equipment on rent and an increase of 7.5% in rental rates year-over-year. 5 Time utilization decreased 200 basis points to 69.8% from the same period last year.
  • Realized cost synergies were $45 million in the third quarter ($62 million year-to-date), toward a fully-developed goal of at least $230 million on a run-rate basis. The company raised its expected cost synergies to a range of $230 - $250 million, compared to a prior estimate of at least $230 million.
  • The company generated $101 million of proceeds from used equipment sales at a gross margin of 40.3% 6, compared with $74 million of proceeds at a gross margin of 36.4% for the same period last year.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "We delivered a strong performance in the quarter, propelled by the effective execution of our strategy and widespread demand for our rental equipment. All but one of our regions reported year-over-year rate increases, and we now expect a rate gain of approximately 7% for the full year. Third quarter time utilization, while below last year’s record level, contributed to a very healthy year-to-date performance of 67%. Our exceptionally strong flow-through and adjusted EBITDA margin make it clear that we’re effectively managing rates, utilization and costs.”

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