About United Rentals
United Rentals, Inc. is the largest equipment rental company in the
world, with an integrated network of 836 rental locations in 49 states
and 10 Canadian provinces. The company’s approximately 11,300 employees
serve construction and industrial customers, utilities, municipalities,
homeowners and others. The company offers for rent approximately 3,300
classes of equipment with a total original cost of $7.23 billion. United
Rentals is a member of the Standard & Poor’s MidCap 400 Index and the
Russell 2000 Index® and is headquartered in Greenwich, Conn. Additional
information about United Rentals is available at unitedrentals.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, known
as the PSLRA.
These statements can generally be identified by the
use of forward-looking terminology such as “believe,” “expect,” “may,”
“will,” “should,” “seek,” “on-track,” “plan,” “project,” “forecast,”
“intend” or “anticipate,” or the negative thereof or comparable
terminology, or by discussions of vision, strategy or outlook. These
statements are based on current plans, estimates and projections, and,
therefore, you should not place undue reliance on them. No
forward-looking statement can be guaranteed, and actual results may
differ materially from those projected. Factors that could cause actual
results to differ materially from those projected include, but are not
limited to, the following: (1) a slowdown in the recovery of North
American construction and industrial activities, which decreased during
the economic downturn and significantly affected our revenues and
profitability, may reduce demand for equipment and prices that we can
charge; (2) a decrease in levels of infrastructure spending, including
lower than expected government funding for such projects; (3) our highly
leveraged capital structure, which requires us to use a substantial
portion of our cash flow for debt service and can constrain our
flexibility in responding to unanticipated or adverse business
conditions; (4) restrictive covenants in our debt agreements, which
could limit our financial and operational flexibility; (5) noncompliance
with covenants in our debt agreements, which could result in termination
of our credit facilities and acceleration of outstanding borrowings; (6)
inability to access the capital that our business may require;
(7) inability to manage credit risk adequately or to collect on
contracts with customers; (8) incurrence of impairment charges; (9) the
outcome or other potential consequences of litigation and other claims
and regulatory matters relating to our business, including certain
claims that our insurance may not cover; (10) an increase in our loss
reserves to address business operations or other claims and any claims
that exceed our established levels of reserves; (11) incurrence of
additional costs and expenses (including indemnification obligations) in
connection with litigation, regulatory or investigatory matters; (12)
increases in our maintenance and replacement costs as we age our fleet,
and decreases in the residual value of our equipment; (13) inability to
sell our new or used fleet in the amounts, or at the prices, we expect;
(14) challenges associated with past or future acquisitions, such as
undiscovered liabilities, costs, integration issues and/or the inability
to achieve the cost and revenue synergies expected; (15) management
turnover and inability to attract and retain key personnel; (16) our
rates and time utilization being less than anticipated; (17) our costs
being more than anticipated, the inability to realize expected savings
in the amounts or time frames planned and the inability to obtain key
equipment and supplies; (18) disruptions in our information technology
systems; (19) competition from existing and new competitors; (20) labor
difficulties and labor-based legislation affecting labor relations and
operations generally; and (21) the costs of complying with environmental
and safety regulations. For a more complete description of these and
other possible risks and uncertainties, please refer to our Annual
Report on Form 10-K for the year ended December 31, 2012, as well as to
our subsequent filings with the SEC. The forward-looking statements
contained herein speak only as of the date hereof, and we make 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 in expectations.
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UNITED RENTALS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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(In millions, except per share amounts)
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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2012
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2011
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2012
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2011
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Revenues:
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Equipment rentals
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$
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1,036
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$
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589
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$
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3,455
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$
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2,151
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Sales of rental equipment
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141
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93
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399
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208
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Sales of new equipment
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29
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24
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93
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84
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Contractor supplies sales
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23
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19
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87
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85
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Service and other revenues
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20
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21
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83
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83
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Total revenues
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1,249
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746
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4,117
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2,611
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Cost of revenues:
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Cost of equipment rentals, excluding depreciation
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401
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252
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1,392
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992
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Depreciation of rental equipment
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208
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111
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699
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423
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Cost of rental equipment sales
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99
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69
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274
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142
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Cost of new equipment sales
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23
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19
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74
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67
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Cost of contractor supplies sales
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17
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13
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62
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58
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Cost of service and other revenues
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6
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7
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29
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31
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Total cost of revenues
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754
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471
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2,530
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1,713
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Gross profit
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495
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275
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1,587
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898
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Selling, general and administrative expenses
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176
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109
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588
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407
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RSC merger related costs
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13
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19
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111
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19
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Restructuring charge
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6
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14
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99
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19
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Non-rental depreciation and amortization
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64
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18
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198
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57
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Operating income
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236
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115
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591
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396
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Interest expense, net
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196
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58
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512
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228
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Interest expense—subordinated convertible debentures, net
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1
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2
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4
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7
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Other income, net
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—
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(1
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)
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(13
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)
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(3
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)
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Income from continuing operations before (benefit) provision for
income taxes
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39
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56
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88
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164
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(Benefit) provision for income taxes
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(2
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)
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28
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13
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63
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Income from continuing operations
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$
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41
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$
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28
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$
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75
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$
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101
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Income from discontinued operation, net of taxes
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$
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—
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$
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1
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$
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—
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$
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—
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Net income
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$
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41
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$
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29
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$
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75
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$
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101
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Diluted earnings per share:
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Income from continuing operations
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$
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0.40
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$
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0.39
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$
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0.79
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$
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1.38
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Income from discontinued operation
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$
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—
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$
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—
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$
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—
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$
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—
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Net income
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$
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0.40
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$
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0.39
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$
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0.79
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$
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1.38
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UNITED RENTALS, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(In millions)
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December 31, 2012
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December 31, 2011
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ASSETS
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Cash and cash equivalents
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$
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106
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$
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36
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Accounts receivable, net
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793
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464
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Inventory
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68
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44
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Prepaid expenses and other assets
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111
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75
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Deferred taxes
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265
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104
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Total current assets
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1,343
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723
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Rental equipment, net
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4,966
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2,617
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Property and equipment, net
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428
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366
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Goodwill and other intangible assets, net
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4,170
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372
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Other long-term assets
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119
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65
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Total assets
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$
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11,026
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$
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4,143
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Short-term debt and current maturities of long-term debt
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$
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630
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$
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395
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Accounts payable
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|
|
|
286
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|
|
|
|
206
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Accrued expenses and other liabilities
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|
435
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|
|
|
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263
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Total current liabilities
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1,351
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|
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864
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Long-term debt
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6,679
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|
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2,592
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Subordinated convertible debentures
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|
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55
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|
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|
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55
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Deferred taxes
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|
|
1,302
|
|
|
|
|
470
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Other long-term liabilities
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|
|
65
|
|
|
|
|
59
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Total liabilities
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9,452
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|
|
|
|
4,040
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Temporary equity
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|
|
31
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|
|
|
|
39
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|
|
Common stock
|
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|
|
1
|
|
|
|
|
1
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|
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Additional paid-in capital
|
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|
|
1,997
|
|
|
|
|
487
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|
|
Accumulated deficit
|
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|
|
(424
|
)
|
|
|
|
(499
|
)
|
|
Treasury stock
|
|
|
|
(115
|
)
|
|
|
|
—
|
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Accumulated other comprehensive income
|
|
|
|
84
|
|
|
|
|
75
|
|
|
Total stockholders’ equity
|
|
|
|
1,543
|
|
|
|
|
64
|
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
11,026
|
|
|
|
|
$
|
4,143
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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UNITED RENTALS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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(In Millions)
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|
|
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Three Months Ended
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Year Ended
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|
|
|
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December 31,
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December 31,
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|
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2012
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2011
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2012
|
|
|
|
2011
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Cash Flows From Operating Activities:
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|
|
|
|
|
|
|
|
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|
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|
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Net income
|
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|
|
$
|
41
|
|
|
|
|
$
|
29
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
101
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Depreciation and amortization
|
|
|
|
272
|
|
|
|
|
129
|
|
|
|
|
897
|
|
|
|
|
480
|
|
|
Amortization of deferred financing costs and original issue discounts
|
|
|
|
6
|
|
|
|
|
5
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|
|
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|
23
|
|
|
|
|
22
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|
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Gain on sales of rental equipment
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|
|
(42
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)
|
|
|
|
(24
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)
|
|
|
|
(125
|
)
|
|
|
|
(66
|
)
|
|
Gain on sales of non-rental equipment
|
|
|
|
—
|
|
|
|
|
—
|
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|
|
(2
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)
|
|
|
|
(2
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)
|
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Gain on sale of software subsidiary
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
(8
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)
|
|
|
|
—
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|
|
Stock compensation expense, net
|
|
|
|
9
|
|
|
|
|
3
|
|
|
|
|
32
|
|
|
|
|
12
|
|
|
RSC merger related costs
|
|
|
|
13
|
|
|
|
|
19
|
|
|
|
|
111
|
|
|
|
|
19
|
|
|
Restructuring charge
|
|
|
|
6
|
|
|
|
|
14
|
|
|
|
|
99
|
|
|
|
|
19
|
|
|
Loss on extinguishment of debt securities and ABL amendment
|
|
|
|
72
|
|
|
|
|
3
|
|
|
|
|
72
|
|
|
|
|
3
|
|
|
Loss on retirement of subordinated convertible debentures
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
(Decrease) increase in deferred taxes
|
|
|
|
(21
|
)
|
|
|
|
23
|
|
|
|
|
(16
|
)
|
|
|
|
39
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Decrease (increase) in accounts receivable
|
|
|
|
8
|
|
|
|
|
(2
|
)
|
|
|
|
(86
|
)
|
|
|
|
(62
|
)
|
|
Decrease (increase) in inventory
|
|
|
|
20
|
|
|
|
|
14
|
|
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
|
Increase in prepaid expenses and other assets
|
|
|
|
(1
|
)
|
|
|
|
(4
|
)
|
|
|
|
(18
|
)
|
|
|
|
(15
|
)
|
|
(Decrease) increase in accounts payable
|
|
|
|
(121
|
)
|
|
|
|
(33
|
)
|
|
|
|
(223
|
)
|
|
|
|
68
|
|
|
Decrease in accrued expenses and other liabilities
|
|
|
|
(38
|
)
|
|
|
|
(18
|
)
|
|
|
|
(108
|
)
|
|
|
|
(5
|
)
|
|
Net cash provided by operating activities
|
|
|
|
226
|
|
|
|
|
159
|
|
|
|
|
721
|
|
|
|
|
612
|
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of rental equipment
|
|
|
|
(163
|
)
|
|
|
|
(143
|
)
|
|
|
|
(1,272
|
)
|
|
|
|
(774
|
)
|
|
Purchases of non-rental equipment
|
|
|
|
(21
|
)
|
|
|
|
(12
|
)
|
|
|
|
(97
|
)
|
|
|
|
(36
|
)
|
|
Proceeds from sales of rental equipment
|
|
|
|
141
|
|
|
|
|
93
|
|
|
|
|
399
|
|
|
|
|
208
|
|
|
Proceeds from sales of non-rental equipment
|
|
|
|
5
|
|
|
|
|
2
|
|
|
|
|
31
|
|
|
|
|
13
|
|
|
Purchases of other companies, net of cash acquired
|
|
|
|
—
|
|
|
|
|
(78
|
)
|
|
|
|
(1,175
|
)
|
|
|
|
(276
|
)
|
|
Proceeds from sale of software subsidiary
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
10
|
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
|
(38
|
)
|
|
|
|
(138
|
)
|
|
|
|
(2,104
|
)
|
|
|
|
(865
|
)
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from debt
|
|
|
|
1,127
|
|
|
|
|
430
|
|
|
|
|
6,013
|
|
|
|
|
1,892
|
|
|
Payments of debt, including subordinated convertible debentures
|
|
|
|
(1,268
|
)
|
|
|
|
(430
|
)
|
|
|
|
(4,370
|
)
|
|
|
|
(1,813
|
)
|
|
Payments of financing costs
|
|
|
|
(8
|
)
|
|
|
|
(16
|
)
|
|
|
|
(75
|
)
|
|
|
|
(16
|
)
|
|
Proceeds from the exercise of common stock options
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
21
|
|
|
|
|
35
|
|
|
Common stock repurchased
|
|
|
|
(3
|
)
|
|
|
|
—
|
|
|
|
|
(131
|
)
|
|
|
|
(7
|
)
|
|
Cash paid in connection with the 4 percent Convertible Senior Notes
and related hedge, net
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(11
|
)
|
|
Excess tax benefits from share-based payment arrangements, net
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
(5
|
)
|
|
|
|
—
|
|
|
Net cash (used in) provided by financing activities
|
|
|
|
(149
|
)
|
|
|
|
(12
|
)
|
|
|
|
1,453
|
|
|
|
|
80
|
|
|
Effect of foreign exchange rates
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
6
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
38
|
|
|
|
|
10
|
|
|
|
|
70
|
|
|
|
|
(167
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
68
|
|
|
|
|
26
|
|
|
|
|
36
|
|
|
|
|
203
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
106
|
|
|
|
|
$
|
36
|
|
|
|
|
$
|
106
|
|
|
|
|
$
|
36
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest, including subordinated convertible debentures
|
|
|
|
$
|
152
|
|
|
|
|
$
|
62
|
|
|
|
|
$
|
371
|
|
|
|
|
$
|
203
|
|
|
Cash paid for income taxes, net
|
|
|
|
9
|
|
|
|
|
4
|
|
|
|
|
40
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED RENTALS, INC.
|
|
SEGMENT PERFORMANCE
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
Change
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
Change
|
|
General Rentals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals revenue
|
|
|
|
$
|
961
|
|
|
|
|
$
|
534
|
|
|
|
|
80.0
|
%
|
|
|
|
$
|
3,188
|
|
|
|
|
$
|
1,953
|
|
|
|
|
63.2
|
%
|
|
|
Reportable segment equipment rentals gross profit
|
|
|
|
392
|
|
|
|
|
201
|
|
|
|
|
95.0
|
%
|
|
|
|
1,239
|
|
|
|
|
643
|
|
|
|
|
92.7
|
%
|
|
|
Reportable segment equipment rentals gross margin
|
|
|
|
40.8
|
%
|
|
|
|
37.6
|
%
|
|
|
|
3.2pp
|
|
|
|
38.9
|
%
|
|
|
|
32.9
|
%
|
|
|
|
6.0pp
|
|
|
Trench Safety, Power & HVAC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals revenue
|
|
|
|
$
|
75
|
|
|
|
|
$
|
55
|
|
|
|
|
36.4
|
%
|
|
|
|
$
|
267
|
|
|
|
|
$
|
198
|
|
|
|
|
34.8
|
%
|
|
|
Reportable segment equipment rentals gross profit
|
|
|
|
35
|
|
|
|
|
25
|
|
|
|
|
40.0
|
%
|
|
|
|
125
|
|
|
|
|
93
|
|
|
|
|
34.4
|
%
|
|
|
Reportable segment equipment rentals gross margin
|
|
|
|
46.7
|
%
|
|
|
|
45.5
|
%
|
|
|
|
1.2pp
|
|
|
|
46.8
|
%
|
|
|
|
47.0
|
%
|
|
|
|
(0.2pp
|
)
|
|
Total United Rentals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equipment rentals revenue
|
|
|
|
$
|
1,036
|
|
|
|
|
$
|
589
|
|
|
|
|
75.9
|
%
|
|
|
|
$
|
3,455
|
|
|
|
|
$
|
2,151
|
|
|
|
|
60.6
|
%
|
|
|
Total equipment rentals gross profit
|
|
|
|
427
|
|
|
|
|
226
|
|
|
|
|
88.9
|
%
|
|
|
|
1,364
|
|
|
|
|
736
|
|
|
|
|
85.3
|
%
|
|
|
Total equipment rentals gross margin
|
|
|
|
41.2
|
%
|
|
|
|
38.4
|
%
|
|
|
|
2.8pp
|
|
|
|
39.5
|
%
|
|
|
|
34.2
|
%
|
|
|
|
5.3pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED RENTALS, INC.
|
|
DILUTED EARNINGS PER SHARE CALCULATION
|
|
(In millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
41
|
|
|
|
|
$
|
28
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
101
|
|
Convertible debt interest—1
7/8 percent notes
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Income from continuing operations available to common stockholders
|
|
|
|
$
|
41
|
|
|
|
|
$
|
28
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
101
|
|
Income from discontinued operation
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Net income available to common stockholders
|
|
|
|
$
|
41
|
|
|
|
|
$
|
29
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
101
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings per share—weighted-average common
shares
|
|
|
|
92.7
|
|
|
|
|
62.7
|
|
|
|
|
83.0
|
|
|
|
|
62.2
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options and warrants
|
|
|
|
0.8
|
|
|
|
|
0.7
|
|
|
|
|
0.7
|
|
|
|
|
1.0
|
|
Convertible subordinated notes—1
7/8 percent
|
|
|
|
0.2
|
|
|
|
|
1.0
|
|
|
|
|
—
|
|
|
|
|
1.0
|
|
Convertible subordinated notes—4 percent
|
|
|
|
10.9
|
|
|
|
|
8.4
|
|
|
|
|
10.6
|
|
|
|
|
8.5
|
|
Restricted stock units
|
|
|
|
0.6
|
|
|
|
|
0.6
|
|
|
|
|
0.5
|
|
|
|
|
0.6
|
|
Denominator for diluted earnings per share—adjusted
weighted-average common shares
|
|
|
|
105.2
|
|
|
|
|
73.4
|
|
|
|
|
94.8
|
|
|
|
|
73.3
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
0.79
|
|
|
|
|
$
|
1.38
|
|
Income from discontinued operation
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Net income
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
0.79
|
|
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED RENTALS, INC.
ADJUSTED EARNINGS PER SHARE GAAP
RECONCILIATION
We define “Earnings per share from continuing operations – adjusted” as
the sum of earnings per share from continuing operations – GAAP, as
reported plus the impact of the following special items: RSC merger
related costs, RSC merger related intangible asset amortization, impact
on depreciation related to acquired RSC fleet and property and
equipment, impact of the fair value mark-up of acquired RSC fleet and
inventory, pre-close RSC merger related interest expense, impact on
interest expense related to fair value adjustment of acquired RSC
indebtedness, restructuring charge, asset impairment charge, loss on
extinguishment of debt securities, including subordinated convertible
debentures, and ABL amendment, and gain on sale of software subsidiary.
Management believes adjusted earnings per share from continuing
operations provides useful information concerning future profitability.
However, adjusted earnings per share from continuing operations is not a
measure of financial performance under GAAP. Accordingly, adjusted
earnings per share from continuing operations should not be considered
an alternative to GAAP earnings per share from continuing operations.
The table below provides a reconciliation between earnings per share
from continuing operations – GAAP, as reported, and earnings per share
from continuing operations – adjusted.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
Earnings per share from continuing operations, GAAP, as reported
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
0.79
|
|
|
|
|
$
|
1.38
|
|
After-tax impact of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSC merger related costs (1)
|
|
|
|
0.08
|
|
|
|
|
0.25
|
|
|
|
|
0.72
|
|
|
|
|
0.25
|
|
RSC merger related intangible asset amortization (2)
|
|
|
|
0.25
|
|
|
|
|
—
|
|
|
|
|
0.74
|
|
|
|
|
—
|
|
Impact on depreciation related to acquired RSC fleet and property
and equipment (3)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(0.03
|
)
|
|
|
|
—
|
|
Impact of the fair value mark-up of acquired RSC fleet and inventory
(4)
|
|
|
|
0.09
|
|
|
|
|
—
|
|
|
|
|
0.24
|
|
|
|
|
—
|
|
Pre-close RSC merger related interest expense (5)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
0.19
|
|
|
|
|
—
|
|
Impact on interest expense related to fair value adjustment of
acquired RSC indebtedness (6)
|
|
|
|
(0.01
|
)
|
|
|
|
—
|
|
|
|
|
(0.03
|
)
|
|
|
|
—
|
|
Restructuring charge (7)
|
|
|
|
0.03
|
|
|
|
|
0.12
|
|
|
|
|
0.64
|
|
|
|
|
0.16
|
|
Asset impairment charge (8)
|
|
|
|
0.01
|
|
|
|
|
0.03
|
|
|
|
|
0.10
|
|
|
|
|
0.04
|
|
Loss on extinguishment of debt securities, including subordinated
convertible debentures, and ABL amendment (9)
|
|
|
|
0.41
|
|
|
|
|
0.03
|
|
|
|
|
0.45
|
|
|
|
|
0.04
|
|
Gain on sale of software subsidiary (10)
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
|
(0.05
|
)
|
|
|
|
—
|
|
Earnings per share from continuing operations- adjusted
|
|
|
|
$
|
1.27
|
|
|
|
|
$
|
0.82
|
|
|
|
|
$
|
3.76
|
|
|
|
|
$
|
1.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects transaction costs associated with the RSC acquisition.
|
|
(2)
|
|
Reflects the amortization of the intangible assets acquired in the
RSC acquisition.
|
|
(3)
|
|
Reflects the impact of extending the useful lives of equipment
acquired in the RSC acquisition, net of the impact of additional
depreciation associated with the fair value mark-up of such
equipment.
|
|
(4)
|
|
Reflects additional costs recorded in cost of rental equipment
sales, cost of equipment rentals, excluding depreciation, and cost
of contractor supplies sales associated with the fair value mark-up
of rental equipment and inventory acquired in the RSC acquisition.
The costs relate to equipment and inventory acquired in the RSC
acquisition and subsequently sold.
|
|
(5)
|
|
In March 2012, we issued $2,825 million of debt in connection with
the RSC acquisition. The pre-close RSC merger related interest
expense reflects the interest expense recorded on this debt prior to
the acquisition date.
|
|
(6)
|
|
Reflects a reduction of interest expense associated with the fair
value mark-up of debt acquired in the RSC acquisition.
|
|
(7)
|
|
Reflects severance costs and branch closure charges associated with
the RSC acquisition and our closed restructuring program.
|
|
(8)
|
|
Primarily reflects write-offs of leasehold improvements and other
fixed assets in connection with the RSC acquisition and our closed
restructuring program.
|
|
(9)
|
|
Reflects losses on the extinguishment of certain debt securities,
including subordinated convertible debentures, and write-offs of
debt issuance costs associated with the October 2011 amendment of
our ABL facility.
|
|
(10)
|
|
Reflects a gain recognized upon the sale of a former subsidiary that
developed and marketed software.
|
|
|
|
|
UNITED RENTALS, INC.
EBITDA AND ADJUSTED EBITDA GAAP
RECONCILIATION
(In millions)
EBITDA represents the sum of net income, income from discontinued
operation, net of taxes, (benefit) provision for income taxes, interest
expense, net, interest expense-subordinated convertible debentures, net,
depreciation of rental equipment, and non-rental depreciation and
amortization. Adjusted EBITDA represents EBITDA plus the sum of the RSC
merger related costs, restructuring charge, stock compensation expense,
net, the impact of the fair value mark-up of acquired RSC fleet and
inventory and the gain on sale of software subsidiary. These items are
excluded from adjusted EBITDA internally when evaluating our operating
performance and allow investors to make a more meaningful comparison
between our core business operating results over different periods of
time, as well as with those of other similar companies. Management
believes that EBITDA and adjusted EBITDA, when viewed with the Company’s
results under GAAP and the accompanying reconciliation, provide useful
information about operating performance and period-over-period growth,
and provide additional information that is useful for evaluating the
operating performance of our core business without regard to potential
distortions. Additionally, management believes that EBITDA and adjusted
EBITDA permit investors to gain an understanding of the factors and
trends affecting our ongoing cash earnings, from which capital
investments are made and debt is serviced. However, EBITDA and adjusted
EBITDA are not measures of financial performance or liquidity under GAAP
and, accordingly, should not be considered as alternatives to net income
or cash flow from operating activities as indicators of operating
performance or liquidity. The table below provides a reconciliation
between net income and EBITDA and adjusted EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
Net income
|
|
|
|
$
|
41
|
|
|
|
|
$
|
29
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
101
|
|
Income from discontinued operation, net of taxes
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
(Benefit) provision for income taxes
|
|
|
|
(2
|
)
|
|
|
|
28
|
|
|
|
|
13
|
|
|
|
|
63
|
|
Interest expense, net
|
|
|
|
196
|
|
|
|
|
58
|
|
|
|
|
512
|
|
|
|
|
228
|
|
Interest expense – subordinated convertible debentures, net
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
4
|
|
|
|
|
7
|
|
Depreciation of rental equipment
|
|
|
|
208
|
|
|
|
|
111
|
|
|
|
|
699
|
|
|
|
|
423
|
|
Non-rental depreciation and amortization
|
|
|
|
64
|
|
|
|
|
18
|
|
|
|
|
198
|
|
|
|
|
57
|
|
EBITDA (A)
|
|
|
|
$
|
508
|
|
|
|
|
$
|
245
|
|
|
|
|
$
|
1,501
|
|
|
|
|
$
|
879
|
|
RSC merger related costs (1)
|
|
|
|
13
|
|
|
|
|
19
|
|
|
|
|
111
|
|
|
|
|
19
|
|
Restructuring charge (2)
|
|
|
|
6
|
|
|
|
|
14
|
|
|
|
|
99
|
|
|
|
|
19
|
|
Stock compensation expense, net (3)
|
|
|
|
9
|
|
|
|
|
3
|
|
|
|
|
32
|
|
|
|
|
12
|
|
Impact of the fair value mark-up of acquired RSC fleet and inventory
(4)
|
|
|
|
15
|
|
|
|
|
—
|
|
|
|
|
37
|
|
|
|
|
—
|
|
Gain on sale of software subsidiary (5)
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
(8
|
)
|
|
|
|
—
|
|
Adjusted EBITDA (B)
|
|
|
|
$
|
553
|
|
|
|
|
$
|
281
|
|
|
|
|
$
|
1,772
|
|
|
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A)
|
|
Our EBITDA margin was 40.7% and 32.8% for the three months ended
December 31, 2012 and 2011, respectively, and 36.5% and 33.7% for
the year ended December 31, 2012 and 2011, respectively.
|
|
B)
|
|
Our adjusted EBITDA margin was 44.3% and 37.7% for the three months
ended December 31, 2012 and 2011, respectively, and 43.0% and 35.6%
for the year ended December 31, 2012 and 2011, respectively.
|
|
|
|
|
|
(1)
|
|
Reflects transaction costs associated with the RSC acquisition.
|
|
(2)
|
|
Reflects severance costs and branch closure charges associated with
the RSC acquisition and our closed restructuring program.
|
|
(3)
|
|
Represents non-cash, share-based payments associated with the
granting of equity instruments.
|
|
(4)
|
|
Reflects additional costs recorded in cost of rental equipment
sales, cost of equipment rentals, excluding depreciation, and cost
of contractor supplies sales associated with the fair value mark-up
of rental equipment and inventory acquired in the RSC acquisition.
The costs relate to equipment and inventory acquired in the RSC
acquisition and subsequently sold.
|
|
(5)
|
|
Reflects a gain recognized upon the sale of a former subsidiary that
developed and marketed software.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED RENTALS, INC.
|
|
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO
EBITDA AND ADJUSTED EBITDA
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
Net cash provided by operating activities
|
|
|
|
$
|
226
|
|
|
|
|
$
|
159
|
|
|
|
|
$
|
721
|
|
|
|
|
$
|
612
|
|
|
Adjustments for items included in net cash provided by operating
activities but excluded from the calculation of EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operation, net of taxes
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Amortization of deferred financing costs and original issue discounts
|
|
|
|
(6
|
)
|
|
|
|
(5
|
)
|
|
|
|
(23
|
)
|
|
|
|
(22
|
)
|
|
Gain on sales of rental equipment
|
|
|
|
42
|
|
|
|
|
24
|
|
|
|
|
125
|
|
|
|
|
66
|
|
|
Gain on sales of non-rental equipment
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
Gain on sale of software subsidiary (5)
|
|
|
|
(2
|
)
|
|
|
|
—
|
|
|
|
|
8
|
|
|
|
|
—
|
|
|
RSC merger related costs (1)
|
|
|
|
(13
|
)
|
|
|
|
(19
|
)
|
|
|
|
(111
|
)
|
|
|
|
(19
|
)
|
|
Restructuring charge (2)
|
|
|
|
(6
|
)
|
|
|
|
(14
|
)
|
|
|
|
(99
|
)
|
|
|
|
(19
|
)
|
|
Stock compensation expense, net (3)
|
|
|
|
(9
|
)
|
|
|
|
(3
|
)
|
|
|
|
(32
|
)
|
|
|
|
(12
|
)
|
|
Loss on extinguishment of debt securities and ABL amendment (6)
|
|
|
|
(72
|
)
|
|
|
|
(3
|
)
|
|
|
|
(72
|
)
|
|
|
|
(3
|
)
|
|
Loss on retirement of subordinated convertible debentures
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
Changes in assets and liabilities
|
|
|
|
187
|
|
|
|
|
42
|
|
|
|
|
571
|
|
|
|
|
49
|
|
|
Cash paid for interest, including subordinated convertible debentures
|
|
|
|
152
|
|
|
|
|
62
|
|
|
|
|
371
|
|
|
|
|
203
|
|
|
Cash paid for income taxes, net
|
|
|
|
9
|
|
|
|
|
4
|
|
|
|
|
40
|
|
|
|
|
24
|
|
|
EBITDA
|
|
|
|
$
|
508
|
|
|
|
|
$
|
245
|
|
|
|
|
$
|
1,501
|
|
|
|
|
$
|
879
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSC merger related costs (1)
|
|
|
|
13
|
|
|
|
|
19
|
|
|
|
|
111
|
|
|
|
|
19
|
|
|
Restructuring charge (2)
|
|
|
|
6
|
|
|
|
|
14
|
|
|
|
|
99
|
|
|
|
|
19
|
|
|
Stock compensation expense, net (3)
|
|
|
|
9
|
|
|
|
|
3
|
|
|
|
|
32
|
|
|
|
|
12
|
|
|
Impact of the fair value mark-up of acquired RSC fleet and inventory
(4)
|
|
|
|
15
|
|
|
|
|
—
|
|
|
|
|
37
|
|
|
|
|
—
|
|
|
Gain on sale of software subsidiary (5)
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
(8
|
)
|
|
|
|
—
|
|
|
Adjusted EBITDA
|
|
|
|
$
|
553
|
|
|
|
|
$
|
281
|
|
|
|
|
$
|
1,772
|
|
|
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects transaction costs associated with the acquisition of RSC.
|
|
(2)
|
|
Reflects severance costs and branch closure charges associated with
the RSC acquisition and our closed restructuring program.
|
|
(3)
|
|
Represents non-cash, share-based payments associated with the
granting of equity instruments.
|
|
(4)
|
|
Reflects additional costs recorded in cost of rental equipment
sales, cost of equipment rentals, excluding depreciation, and cost
of contractor supplies sales associated with the fair value mark-up
of rental equipment and inventory acquired in the RSC acquisition.
The costs relate to equipment and inventory acquired in the RSC
acquisition and subsequently sold.
|
|
(5)
|
|
Reflects a gain recognized upon the sale of a former subsidiary that
developed and marketed software.
|
|
(6)
|
|
Reflects losses on the extinguishment of certain debt securities and
write-offs of debt issuance costs associated with the October 2011
amendment of our ABL facility.
|
|
|
|
|
UNITED RENTALS, INC.
FREE CASH FLOW GAAP RECONCILIATION
(In
millions)
We define free cash flow (usage) as (i) net cash provided by operating
activities less (ii) purchases of rental and non-rental equipment plus
(iii) proceeds from sales of rental and non-rental equipment and excess
tax benefits from share-based payment arrangements, net. Management
believes that free cash flow provides useful additional information
concerning cash flow available to meet future debt service obligations
and working capital requirements. However, free cash flow (usage) is not
a measure of financial performance or liquidity under GAAP. Accordingly,
free cash flow (usage) should not be considered an alternative to net
income or cash flow from operating activities as an indicator of
operating performance or liquidity. The table below provides a
reconciliation between net cash provided by operating activities and
free cash flow (usage).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
2012
|
|
2011
|
|
Net cash provided by operating activities
|
|
|
|
$
|
226
|
|
|
$
|
159
|
|
|
|
|
$
|
721
|
|
|
$
|
612
|
|
|
Purchases of rental equipment
|
|
|
|
(163
|
)
|
|
(143
|
)
|
|
|
|
(1,272
|
)
|
|
(774
|
)
|
|
Purchases of non-rental equipment
|
|
|
|
(21
|
)
|
|
(12
|
)
|
|
|
|
(97
|
)
|
|
(36
|
)
|
|
Proceeds from sales of rental equipment
|
|
|
|
141
|
|
|
93
|
|
|
|
|
399
|
|
|
208
|
|
|
Proceeds from sales of non-rental equipment
|
|
|
|
5
|
|
|
2
|
|
|
|
|
31
|
|
|
13
|
|
|
Excess tax benefits from share-based payment arrangements, net
|
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
Free cash flow (usage)
|
|
|
|
$
|
187
|
|
|
$
|
99
|
|
|
|
|
$
|
(223
|
)
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 On April 30, 2012, the company completed the acquisition of
RSC Holdings, Inc. (“RSC”). The results of RSC’s operations have been
combined with the Company’s results since that date.
2 Adjusted EPS is a non-GAAP measure that excludes the impact
of the following special items: (i) RSC merger related costs; (ii)
restructuring charge; (iii) asset impairment charge; (iv) pre-close RSC
merger related interest expense; (v) impact on interest expense related
to fair value adjustment of acquired RSC indebtedness; (vi) impact on
depreciation related to acquired RSC fleet and property and equipment;
(vii) impact of the fair value mark-up of acquired RSC fleet and
inventory; (viii) RSC merger related intangible asset amortization; (ix)
the gain on sale of our software subsidiary; and (x) the loss on
extinguishment of debt securities, including subordinated convertible
debentures, and ABL amendment. See table below for amounts.
3 Adjusted EBITDA is a non-GAAP measure that excludes the
impact of the following special items: (i) RSC merger related costs;
(ii) restructuring charge; (iii) stock compensation expense, net; (iv)
the impact of the fair value mark-up of acquired RSC fleet and
inventory; and (v) the gain on sale of our software subsidiary. See
tables below for amounts.
4 Rental rate, time utilization and OEC calculations are
based on the American Rental Association metrics criteria; comparisons
to 2011 are based on a recast of these metrics on the same basis.
5 The favorable impact of volume increases and rental rate
increases were partially offset by the impact of rental mix in both the
fourth quarter and the full year. Consistent with the company’s
strategic focus on larger accounts, there has been a mix shift towards
monthly rentals in 2012.
6 Used equipment margins for the 2012 fourth quarter and full
year exclude the impact of the fair value mark-up of acquired RSC fleet
that was sold.
7 As-reported basis includes the results of RSC’s operations
only from April 30, 2012 forward.
