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United Rentals Announces Fourth Quarter And Full Year 2012 Results And Provides 2013 Outlook

United Rentals, Inc. (NYSE: URI) today announced financial results for the fourth quarter and full year 2012 1.

For the fourth quarter of 2012, total revenue was $1.249 billion and rental revenue was $1.036 billion. On a GAAP basis, the company reported fourth quarter net income of $41 million, or earnings of $0.40 per diluted share. Adjusted EPS 2 for the quarter was $1.27 per diluted share.

For the full year 2012, total revenue was $4.117 billion and rental revenue was $3.455 billion. On a GAAP basis, full year net income was $75 million, or earnings of $0.79 per diluted share. Adjusted EPS for the full year was $3.76 per diluted share.

For the fourth quarter of 2012, adjusted EBITDA 3 was $553 million and adjusted EBITDA margin was 44.3%. For the full year 2012, adjusted EBITDA was $1.772 billion, and adjusted EBITDA margin was 43.0%.

2012 Highlights 4

On a pro-forma basis (that is, assuming the combination of United Rentals results and RSC results for all periods in 2011 and 2012):

  • Full year total revenue was $4.664 billion compared with $4.133 billion for 2011.
  • Fourth quarter 2012 rental revenue increased 8.7% year-over-year, reflecting an increase of 7.2% in the volume of equipment on rent and an increase of 6.0% in rental rates year-over-year. 5 Full year rental revenue increased 13.2% year-over-year, reflecting an increase of 11.4% in the volume of equipment on rent and an increase of 6.9% in rental rates.
  • Fourth quarter adjusted EBITDA was $553 million and adjusted EBITDA margin was 44.3%, an increase of $104 million and 580 basis points, respectively, from the same period last year. Full year adjusted EBITDA was $1.988 billion and adjusted EBITDA margin was 42.6%, an increase of $494 million and 650 basis points, respectively, from 2011.
  • Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was 125.3% for the fourth quarter and 93.0% for the full year.
  • For the fourth quarter, time utilization decreased 90 basis points year-over-year to 68.7% and full year time utilization decreased 30 basis points to 67.5%.
  • For the fourth quarter, the company generated $141 million of proceeds from used equipment sales at a gross margin of 39.7%, compared with $134 million of proceeds at a gross margin of 31.3% the prior year. For the full year, the company generated $463 million of proceeds from used equipment sales at a gross margin of 39.7%, compared with $363 million of proceeds at a gross margin of 33.3% for 2011. 6
  • The company realized cost synergies of $42 million in the fourth quarter and $104 million for the full year, and reaffirmed its fully developed goal of $230 million to $250 million on a run-rate basis.

2013 Outlook

The company provided the following outlook for full year 2013:

  • Total revenue in a range of $4.9 billion to $5.1 billion;
  • Adjusted EBITDA in a range of $2.25 billion to $2.35 billion;
  • An increase in rental rates of approximately 4.5% year-over-year;
  • Time utilization of approximately 68.0%;
  • Net rental capital expenditures of approximately $1.05 billion, after gross purchases of approximately $1.5 billion; and
  • Full year free cash flow in the range of $400 million to $500 million.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "Our strong performance in 2012 continued in the fourth quarter as we delivered solid growth, robust margins and exceptional flow-through from our revenue streams. The integration with RSC has been very successful, and while it's not complete, we can now shift our focus to driving improvements across the entire business. Despite the intensity of integration, we’ve paid consistent attention to the fundamentals of our business and made good on our promise to drive significant returns."

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