Kneeland continued, "There's a lot to be excited about from the standpoint of value creation as we look at 2013. Industrial and other non-construction sectors have balanced our mix and now account for about 50% of our business. We also expect to benefit further from the secular shift to rental. And non-residential construction is predicted to show reasonable improvement, with larger upswings in 2014 and 2015. We see opportunities to continue to grow our key accounts, reap the synergies of the merger and expand our fleet, while further lowering our debt leverage."

Free Cash Flow and Fleet Size

For the full year 2012, on an as-reported basis 7, free cash usage was $223 million after (i) total rental and non-rental capital expenditures of $1.369 billion and (ii) aggregate cash payments of $150 million related to merger and restructuring activities.

The size of the rental fleet on an as reported basis was $7.23 billion of original equipment cost at December 31, 2012, compared with $4.05 billion at December 31, 2011. The age of the rental fleet was 47.2 months on an OEC-weighted basis at December 31, 2012, compared with 50.3 months at December 31, 2011.

Return on Invested Capital (ROIC)

Return on invested capital, on an as-reported basis, was 7.4% for the 12 months ended December 31, 2012, an increase of 50 basis points from the same period last year. The company’s ROIC metric uses after-tax operating income for the trailing 12 months divided by the averages of stockholders’ equity, debt and deferred taxes, net of average cash and excludes the impact of merger and restructuring related costs. To mitigate the volatility related to fluctuations in the company’s tax rate from period to period, the federal statutory tax rate of 35% is used to calculate after-tax operating income.

Conference Call

United Rentals will hold a conference call tomorrow, Thursday, January 24, 2013, at 11 a.m. Eastern Time. The conference call will be available live by audio webcast at, where it will be archived until the next earnings call, and by calling 703-639-1123.

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