United Rentals Announces Record Third Quarter Results and Reaffirms Mid-Points of 2024 Guidance
United Rentals (URI) reported record third quarter 2024 results with total revenue of $3.992 billion, including rental revenue of $3.463 billion. Net income reached $708 million with a margin of 17.7%. The company achieved GAAP diluted EPS of $10.70 and adjusted EPS of $11.80. Fleet productivity increased 3.5% year-over-year, or 1.9% excluding the Yak acquisition impact. Year-to-date, URI returned $1.451 billion to shareholders through share repurchases and dividends. The company reaffirmed its mid-point 2024 guidance while narrowing ranges for key metrics.
United Rentals (URI) ha riportato risultati record nel terzo trimestre del 2024, con un fatturato totale di 3,992 miliardi di dollari, di cui 3,463 miliardi di dollari derivanti dal noleggio. L'utile netto ha raggiunto 708 milioni di dollari, con un margine del 17,7%. L'azienda ha registrato un utile per azione diluito GAAP di 10,70 dollari e un utile per azione rettificato di 11,80 dollari. La produttività della flotta è aumentata del 3,5% rispetto all'anno precedente, o dell'1,9% escludendo l'impatto dell'acquisizione di Yak. Fino ad oggi, URI ha restituito 1,451 miliardi di dollari agli azionisti tramite riacquisti di azioni e dividendi. L'azienda ha confermato le proprie previsioni per il 2024, riducendo nel contempo le fasce per gli indicatori chiave.
United Rentals (URI) reportó resultados récord en el tercer trimestre de 2024, con ingresos totales de 3,992 mil millones de dólares, incluyendo ingresos por alquiler de 3,463 mil millones de dólares. El ingreso neto alcanzó los 708 millones de dólares, con un margen del 17.7%. La compañía logró un EPS diluido GAAP de 10.70 dólares y un EPS ajustado de 11.80 dólares. La productividad de la flota aumentó un 3.5% interanual, o un 1.9% excluyendo el impacto de la adquisición de Yak. Hasta la fecha, URI ha devuelto 1,451 mil millones de dólares a los accionistas a través de recompras de acciones y dividendos. La empresa reafirmó su guía del punto medio para 2024, al tiempo que estrechó los rangos para los indicadores clave.
유나이티드 렌탈스 (URI)는 2024년 3분기 기록적인 실적을 보고했으며, 총 수익은 39.92억 달러로, 이 중 임대 수익은 34.63억 달러입니다. 순이익은 7억 8백만 달러에 도달했으며, 마진은 17.7%입니다. 회사는 GAAP 희석 EPS가 10.70달러, 조정 EPS가 11.80달러임을 달성했습니다. 함대 생산성은 전년 대비 3.5% 증가하였으며, Yak 인수 효과를 제외하면 1.9% 증가했습니다. 올해 들어 URI는 자사주 매입과 배당을 통해 주주에게 14억 5천1백만 달러를 반환했습니다. 회사는 2024년 중간 가이드를 재확인하고 주요 지표에 대한 범위를 좁혔습니다.
United Rentals (URI) a annoncé des résultats record pour le troisième trimestre 2024, avec un chiffre d'affaires total de 3,992 milliards de dollars, dont 3,463 milliards de dollars provenant des revenus locatifs. Le bénéfice net a atteint 708 millions de dollars, avec une marge de 17,7 %. L'entreprise a réalisé un BPA dilué GAAP de 10,70 dollars et un BPA ajusté de 11,80 dollars. La productivité de la flotte a augmenté de 3,5 % d'une année sur l'autre, ou de 1,9 % en excluant l'impact de l'acquisition de Yak. Depuis le début de l'année, URI a retourné 1,451 milliard de dollars aux actionnaires par le biais de rachats d'actions et de dividendes. L'entreprise a réaffirmé son orientation médiane pour 2024 tout en resserrant les plages pour les indicateurs clés.
United Rentals (URI) berichtete über rekordverdächtige Ergebnisse im dritten Quartal 2024 mit einem Gesamtumsatz von 3,992 Milliarden US-Dollar, einschließlich Mieteinnahmen von 3,463 Milliarden US-Dollar. Der Nettogewinn erreichte 708 Millionen US-Dollar bei einer Marge von 17,7%. Das Unternehmen erzielte einen verwässerten GAAP-EPS von 10,70 US-Dollar und einen bereinigten EPS von 11,80 US-Dollar. Die Produktivität der Flotte stieg im Jahresvergleich um 3,5% oder um 1,9%, wenn man die Auswirkungen der Yak-Akquisition ausschließt. Jahr bis heute hat URI 1,451 Milliarden US-Dollar an Aktionäre durch Aktienrückkäufe und Dividenden zurückgegeben. Das Unternehmen bestätigte seine Mid-Point-Prognose für 2024 und reduzierte gleichzeitig die Spannen für wichtige Kennzahlen.
- Record Q3 rental revenue of $3.463 billion, up 7.4% year-over-year
- Net income increased 0.7% to $708 million
- Fleet productivity up 3.5% year-over-year
- Strong shareholder returns with $1.451 billion distributed year-to-date
- Healthy liquidity position of $2.866 billion with net leverage ratio of 1.8x
- Used equipment sales decreased 12.3% year-over-year
- Net income margin decreased 100 basis points to 17.7%
- Adjusted EBITDA margin declined 140 basis points to 47.7%
- Specialty rentals segment rental gross margin decreased 210 basis points to 50.0%
Insights
United Rentals delivered impressive Q3 2024 results with total revenue reaching
Notable strengths include substantial shareholder returns totaling
The company's performance in both construction and industrial end-markets signals continued strength in infrastructure and commercial construction sectors. The successful integration of the Yak acquisition has enhanced specialty rentals segment revenue by
The slight decline in used equipment sales margins reflects market normalization but remains healthy at
Third Quarter 2024 Highlights
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Total revenue of
, including rental revenue2 of$3.99 2 billion .$3.46 3 billion -
Net income of
, at a margin3 of$708 million 17.7% . GAAP diluted earnings per share of , and adjusted EPS1 of$10.70 .$11.80 -
Adjusted EBITDA of
, at a margin3 of$1.90 4 billion47.7% . -
Year-over-year, fleet productivity4 increased
3.5% . Excluding the impact of the Yak5 acquisition, fleet productivity increased1.9% year-over-year. -
Year-to-date net cash provided by operating activities of
; free cash flow1 of$3.49 8 billion , including gross payments for purchases of rental equipment of$1.21 1 billion .$3.17 8 billion -
Year-to-date gross rental capital expenditures of
.$3.28 7 billion -
Returned
to shareholders year-to-date, comprised of$1.45 1 billion via share repurchases and$1.12 5 billion via dividends paid.$326 million -
Net leverage ratio6 of 1.8x, with total liquidity6 of
, at September 30, 2024.$2.86 6 billion
CEO Comment
Matthew Flannery, chief executive officer of United Rentals, said, “We were pleased with our record third-quarter results, which were in-line with our expectations and reflected continued growth across both our construction and industrial end-markets. Our one-stop shop strategy, supported by world-class service and innovative solutions, is helping our customers achieve their goals across safety, productivity and sustainability. The hard work of our dedicated team members enables us to continue to lead the industry.”
Flannery continued, “As we enter the home-stretch of 2024, we’re happy to reaffirm the mid-points of our guidance across all metrics. Longer-term, we remain optimistic on the multiple secular tailwinds we see, particularly across large projects. I’m very proud of the company we’ve built, supported by a well-proven strategy focused on profitable growth, strong free cash flow generation and prudent capital allocation. This is how we will continue to drive compelling long-term value for our shareholders.”
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1. |
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EPS (earnings per share) and free cash flow are non-GAAP measures as defined in the tables below. See the tables below for reconciliations to the most comparable GAAP measures. |
2. |
Rental revenue includes owned equipment rental revenue, re-rent revenue and ancillary revenue. |
3. |
Net income margin and adjusted EBITDA margin represent net income or adjusted EBITDA divided by total revenue. |
4. |
Fleet productivity reflects the combined impact of changes in rental rates, time utilization and mix on owned equipment rental revenue. |
5. |
On March 15, 2024, the company completed the acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”). |
6. |
The net leverage ratio reflects net debt (total debt less cash and cash equivalents) divided by adjusted EBITDA for the trailing 12 months. Total liquidity reflects cash and cash equivalents plus availability under the asset-based revolving credit facility (“ABL facility”) and the accounts receivable securitization facility. |
2024 Outlook
The company has narrowed the outlook ranges for revenue, adjusted EBITDA7, rental capital expenditures and net cash provided by operating activities, and has reaffirmed the mid-points of its 2024 outlook, as reflected below.
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Current Outlook |
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Prior Outlook |
Total revenue |
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Adjusted EBITDA |
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Net rental capital expenditures after gross purchases |
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Net cash provided by operating activities |
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Free cash flow excluding merger and restructuring related payments8 |
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Summary of Third Quarter 2024 Financial Results
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Rental revenue increased
7.4% year-over-year to a third quarter record of . Fleet productivity increased$3.46 3 billion3.5% year-over-year including the impact of the Yak acquisition, and increased1.9% excluding the impact of the Yak acquisition, while average original equipment at cost (“OEC”) increased3.8% . -
Used equipment sales in the quarter decreased
12.3% year-over-year. Used equipment sales generated of proceeds at a GAAP gross margin of$321 million 45.2% and an adjusted gross margin9 of49.5% , compared to at a GAAP gross margin of$366 million 49.5% and an adjusted gross margin of55.2% for the same period last year. The year-over-year declines in the GAAP and adjusted gross margins primarily reflected the continued normalization of the used equipment market, including pricing. -
Net income for the quarter increased
0.7% year-over-year to a third quarter record of , while net income margin decreased 100 basis points to$708 million 17.7% . The decrease in net income margin was primarily driven by 1) increased selling, general and administrative ("SG&A") expenses as a percentage of revenue, 2) decreased gross margin from used equipment sales as discussed above and 3) the depreciation impact of the Yak acquisition as discussed in the specialty rentals segment comments below. The increase in SG&A expenses as a percentage of revenue primarily reflected the impact of certain discrete expenses and normal variability in expense timing. -
Adjusted EBITDA for the quarter increased
2.9% year-over-year to a third quarter record of , while adjusted EBITDA margin decreased 140 basis points to$1.90 4 billion47.7% . The decrease in adjusted EBITDA margin primarily reflected a decrease in adjusted gross margin from used equipment sales and increased SG&A expenses as a percentage of revenue, both of which are discussed above. -
General rentals segment rental revenue increased
0.9% year-over-year to a third quarter record of , while rental gross margin decreased by 20 basis points year-over-year to$2.32 7 billion37.6% . -
Specialty rentals segment rental revenue increased
23.9% year-over-year to a third quarter record of , including the impact of the Yak acquisition. Excluding the impact of the Yak acquisition, rental revenue increased$1.13 6 billion14.8% year-over-year. Rental gross margin decreased by 210 basis points year-over-year to50.0% , which primarily reflected increased depreciation expense, including the impact of the Yak acquisition.
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7. |
Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. |
8. |
Free cash flow excludes merger and restructuring related payments, which cannot be reasonably predicted for the 2024 outlook. Merger and restructuring related payments were |
9. |
Used equipment sales adjusted gross margin is a non-GAAP financial measure that excludes the impact ( |
-
Cash flow from operating activities increased
6.3% year-over-year to for the first nine months of 2024, and free cash flow, including merger and restructuring related payments, increased$3.49 8 billion4.7% , from to$1.15 7 billion .$1.21 1 billion -
Capital management. The company's net leverage ratio was 1.8x at September 30, 2024, as compared to 1.6x at December 31, 2023. Year-to-date through September 30, 2024, the company repurchased
10 of common stock and paid dividends totaling$1.12 5 billion . It remains the company's intention to repurchase a total of$326 million 10 of common stock during 2024. Additionally, the company's Board of Directors has declared a quarterly dividend of$1.5 billion per share, payable on November 27, 2024 to stockholders of record on November 13, 2024.$1.63 -
Total liquidity was
as of September 30, 2024, including$2.86 6 billion of cash and cash equivalents.$479 million -
Return on invested capital (ROIC)11 was
13.2% for the 12 months ended September 30, 2024.
Conference Call
United Rentals will hold a conference call tomorrow, Thursday, October 24, 2024, at 8:30 a.m. Eastern Time. The conference call number is 800-451-7724 (international: 785-424-1226). The replay number for the call is 402-220-6073. The passcode for both the conference call and replay is 67939. The conference call will also be available live by audio webcast at unitedrentals.com, where it will be archived until the next earnings call.
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10. |
A |
11. |
The company’s ROIC metric uses after-tax operating income for the trailing 12 months divided by average stockholders’ equity, debt and deferred taxes, net of average cash. To mitigate the volatility related to fluctuations in the company’s tax rate from period to period, the |
Non-GAAP Measures
Free cash flow, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted earnings per share (adjusted EPS) and used equipment sales adjusted gross margin are non-GAAP financial measures as defined under the rules of the SEC. Free cash flow represents net cash provided by operating activities less payments for purchases of, and plus proceeds from, equipment and intangible assets. The equipment and intangible asset items are included in cash flows from investing activities. EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the restructuring charges, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet. Adjusted EPS represents EPS plus the sum of the restructuring charges, the impact on depreciation related to acquired fleet and property and equipment, the impact of the fair value mark-up of acquired fleet, merger related intangible asset amortization, asset impairment charge and loss on repurchase/redemption/amendment of debt securities. Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of fleet acquired in certain major acquisitions that was subsequently sold (this adjustment is explained further in the adjusted EPS and EBITDA/adjusted EBITDA tables below). The company believes that: (i) free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements; (ii) EBITDA and adjusted EBITDA provide useful information about operating performance and period-over-period growth, and help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced; (iii) adjusted EPS provides useful information concerning future profitability; and (iv) used equipment sales adjusted gross margin provides information that is useful for evaluating the profitability of used equipment sales without regard to potential distortions. However, none of these measures should be considered as alternatives to net income, cash flows from operating activities, earnings per share or GAAP gross margin from used equipment sales under GAAP as indicators of operating performance or liquidity. See the tables below for further discussion of these non-GAAP measures.
Information reconciling forward-looking adjusted EBITDA to GAAP financial measures is unavailable to the company without unreasonable effort. The company is not able to provide reconciliations of adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of the company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort (as specified in the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). The company provides a range for its adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the adjusted EBITDA calculation. The company provides an adjusted EBITDA forecast because it believes that adjusted EBITDA, when viewed with the company’s results under GAAP, provides useful information for the reasons noted above. However, adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity.
About United Rentals
United Rentals, Inc. is the largest equipment rental company in the world. The company has an integrated network of 1,571 rental locations in
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) the impact of global economic conditions (including inflation, interest rates, supply chain constraints, trade wars and sanctions), geopolitical risks (including risks related to international conflicts and the upcoming elections in
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, 2023, 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, except as required by law.
UNITED RENTALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In millions, except per share amounts) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues: |
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|
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Equipment rentals |
$ |
3,463 |
|
|
$ |
3,224 |
|
|
$ |
9,607 |
|
|
$ |
8,945 |
|
Sales of rental equipment |
|
321 |
|
|
|
366 |
|
|
|
1,069 |
|
|
|
1,136 |
|
Sales of new equipment |
|
77 |
|
|
|
52 |
|
|
|
186 |
|
|
|
166 |
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Contractor supplies sales |
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38 |
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|
|
39 |
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116 |
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|
110 |
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Service and other revenues |
|
93 |
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|
84 |
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|
272 |
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|
247 |
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Total revenues |
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3,992 |
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|
|
3,765 |
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|
|
11,250 |
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|
10,604 |
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Cost of revenues: |
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Cost of equipment rentals, excluding depreciation |
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1,392 |
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1,286 |
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3,958 |
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3,664 |
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Depreciation of rental equipment |
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629 |
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|
588 |
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|
|
1,819 |
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|
|
1,755 |
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Cost of rental equipment sales |
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176 |
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|
|
185 |
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|
|
564 |
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|
|
569 |
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Cost of new equipment sales |
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65 |
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|
|
43 |
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|
152 |
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|
|
137 |
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Cost of contractor supplies sales |
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26 |
|
|
|
28 |
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|
|
80 |
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|
|
78 |
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Cost of service and other revenues |
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56 |
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|
|
50 |
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|
|
165 |
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|
150 |
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Total cost of revenues |
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2,344 |
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2,180 |
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|
6,738 |
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|
6,353 |
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Gross profit |
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1,648 |
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1,585 |
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|
4,512 |
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|
|
4,251 |
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Selling, general and administrative expenses |
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416 |
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374 |
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1,209 |
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1,134 |
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Restructuring charge |
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1 |
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5 |
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3 |
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24 |
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Non-rental depreciation and amortization |
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109 |
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107 |
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322 |
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329 |
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Operating income |
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1,122 |
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|
1,099 |
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2,978 |
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|
2,764 |
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Interest expense, net |
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178 |
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163 |
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|
511 |
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474 |
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Other income, net |
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(5 |
) |
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(7 |
) |
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(12 |
) |
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(19 |
) |
Income before provision for income taxes |
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949 |
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|
943 |
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2,479 |
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|
|
2,309 |
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Provision for income taxes |
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241 |
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|
240 |
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|
593 |
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|
564 |
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Net income |
$ |
708 |
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|
$ |
703 |
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|
$ |
1,886 |
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|
$ |
1,745 |
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Diluted earnings per share |
$ |
10.70 |
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$ |
10.29 |
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$ |
28.25 |
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$ |
25.30 |
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Dividends declared per share |
$ |
1.63 |
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$ |
1.48 |
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$ |
4.89 |
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$ |
4.44 |
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UNITED RENTALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In millions) |
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September 30, 2024 |
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December 31, 2023 |
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ASSETS |
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Cash and cash equivalents |
$ |
479 |
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$ |
363 |
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Accounts receivable, net |
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2,396 |
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|
2,230 |
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Inventory |
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211 |
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|
205 |
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Prepaid expenses and other assets |
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235 |
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|
135 |
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Total current assets |
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3,321 |
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|
2,933 |
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Rental equipment, net |
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15,241 |
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|
14,001 |
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Property and equipment, net |
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1,000 |
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|
903 |
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Goodwill |
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6,853 |
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|
5,940 |
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Other intangible assets, net |
|
694 |
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|
670 |
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Operating lease right-of-use assets |
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1,255 |
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|
1,099 |
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Other long-term assets |
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48 |
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|
43 |
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Total assets |
$ |
28,412 |
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|
$ |
25,589 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Short-term debt and current maturities of long-term debt |
$ |
1,510 |
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$ |
1,465 |
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Accounts payable |
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1,216 |
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|
905 |
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Accrued expenses and other liabilities |
|
1,300 |
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|
|
1,267 |
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Total current liabilities |
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4,026 |
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|
3,637 |
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Long-term debt |
|
11,884 |
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|
|
10,053 |
|
Deferred taxes |
|
2,675 |
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|
|
2,701 |
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Operating lease liabilities |
|
1,021 |
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|
|
895 |
|
Other long-term liabilities |
|
225 |
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|
173 |
|
Total liabilities |
|
19,831 |
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|
|
17,459 |
|
Common stock |
|
1 |
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|
1 |
|
Additional paid-in capital |
|
2,686 |
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|
|
2,650 |
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Retained earnings |
|
13,231 |
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|
|
11,672 |
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Treasury stock |
|
(7,100 |
) |
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|
(5,965 |
) |
Accumulated other comprehensive loss |
|
(237 |
) |
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|
(228 |
) |
Total stockholders’ equity |
|
8,581 |
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|
|
8,130 |
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Total liabilities and stockholders’ equity |
$ |
28,412 |
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$ |
25,589 |
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UNITED RENTALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In millions) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2024 |
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2023 |
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2024 |
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|
2023 |
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Cash Flows From Operating Activities: |
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|
|
||||||||
Net income |
$ |
708 |
|
|
$ |
703 |
|
|
$ |
1,886 |
|
|
$ |
1,745 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
738 |
|
|
|
695 |
|
|
|
2,141 |
|
|
|
2,084 |
|
Amortization of deferred financing costs and original issue discounts |
|
4 |
|
|
|
4 |
|
|
|
11 |
|
|
|
11 |
|
Gain on sales of rental equipment |
|
(145 |
) |
|
|
(181 |
) |
|
|
(505 |
) |
|
|
(567 |
) |
Gain on sales of non-rental equipment |
|
(5 |
) |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
(16 |
) |
Insurance proceeds from damaged equipment |
|
(14 |
) |
|
|
(11 |
) |
|
|
(38 |
) |
|
|
(30 |
) |
Stock compensation expense, net |
|
24 |
|
|
|
23 |
|
|
|
79 |
|
|
|
72 |
|
Restructuring charge |
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
24 |
|
Loss on repurchase/redemption/amendment of debt securities |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Increase (decrease) in deferred taxes |
|
1 |
|
|
|
35 |
|
|
|
(31 |
) |
|
|
88 |
|
Changes in operating assets and liabilities, net of amounts acquired: |
|
|
|
|
|
|
|
||||||||
Increase in accounts receivable |
|
(117 |
) |
|
|
(139 |
) |
|
|
(51 |
) |
|
|
(254 |
) |
Decrease in inventory |
|
12 |
|
|
|
17 |
|
|
|
5 |
|
|
|
22 |
|
Decrease (increase) in prepaid expenses and other assets |
|
46 |
|
|
|
49 |
|
|
|
(44 |
) |
|
|
183 |
|
(Decrease) increase in accounts payable |
|
(98 |
) |
|
|
(220 |
) |
|
|
152 |
|
|
|
(15 |
) |
Increase (decrease) in accrued expenses and other liabilities |
|
49 |
|
|
|
88 |
|
|
|
(98 |
) |
|
|
(57 |
) |
Net cash provided by operating activities |
|
1,204 |
|
|
|
1,062 |
|
|
|
3,498 |
|
|
|
3,290 |
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
||||||||
Payments for purchases of rental equipment |
|
(1,312 |
) |
|
|
(1,030 |
) |
|
|
(3,178 |
) |
|
|
(3,078 |
) |
Payments for purchases of non-rental equipment and intangible assets |
|
(101 |
) |
|
|
(88 |
) |
|
|
(266 |
) |
|
|
(267 |
) |
Proceeds from sales of rental equipment |
|
321 |
|
|
|
366 |
|
|
|
1,069 |
|
|
|
1,136 |
|
Proceeds from sales of non-rental equipment |
|
20 |
|
|
|
18 |
|
|
|
50 |
|
|
|
46 |
|
Insurance proceeds from damaged equipment |
|
14 |
|
|
|
11 |
|
|
|
38 |
|
|
|
30 |
|
Purchases of other companies, net of cash acquired |
|
(108 |
) |
|
|
12 |
|
|
|
(1,342 |
) |
|
|
(406 |
) |
Purchases of investments |
|
(1 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(1,167 |
) |
|
|
(711 |
) |
|
|
(3,633 |
) |
|
|
(2,539 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from debt |
|
2,818 |
|
|
|
2,230 |
|
|
|
9,729 |
|
|
|
6,718 |
|
Payments of debt |
|
(2,367 |
) |
|
|
(2,168 |
) |
|
|
(7,964 |
) |
|
|
(6,175 |
) |
Payments of financing costs |
|
— |
|
|
|
— |
|
|
|
(17 |
) |
|
|
— |
|
Common stock repurchased, including tax withholdings for share based compensation (1) |
|
(377 |
) |
|
|
(252 |
) |
|
|
(1,168 |
) |
|
|
(806 |
) |
Dividends paid |
|
(107 |
) |
|
|
(100 |
) |
|
|
(326 |
) |
|
|
(305 |
) |
Net cash (used in) provided by financing activities |
|
(33 |
) |
|
|
(290 |
) |
|
|
254 |
|
|
|
(568 |
) |
Effect of foreign exchange rates |
|
8 |
|
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(5 |
) |
Net increase in cash and cash equivalents |
|
12 |
|
|
|
57 |
|
|
|
116 |
|
|
|
178 |
|
Cash and cash equivalents at beginning of period |
|
467 |
|
|
|
227 |
|
|
|
363 |
|
|
|
106 |
|
Cash and cash equivalents at end of period |
$ |
479 |
|
|
$ |
284 |
|
|
$ |
479 |
|
|
$ |
284 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
||||||||
Cash paid for income taxes, net |
$ |
206 |
|
|
$ |
177 |
|
|
$ |
812 |
|
|
$ |
389 |
|
Cash paid for interest |
|
227 |
|
|
|
190 |
|
|
|
544 |
|
|
|
495 |
|
(1) |
See above for a discussion of our share repurchase programs. The common stock repurchases include i) shares repurchased pursuant to the share repurchase programs and ii) shares withheld to satisfy tax withholding obligations upon the vesting of restricted stock unit awards. |
UNITED RENTALS, INC.
RENTAL REVENUE
Fleet productivity is a comprehensive metric that provides greater insight into the decisions made by our managers in support of growth and returns. Specifically, we seek to optimize the interplay of rental rates, time utilization and mix in driving rental revenue. Fleet productivity aggregates, in one metric, the impact of changes in rates, utilization and mix on owned equipment rental revenue.
We believe that this metric is useful in assessing the effectiveness of our decisions on rates, time utilization and mix, particularly as they support the creation of shareholder value. The table below shows the components of the year-over-year change in rental revenue using the fleet productivity methodology:
|
Year-over-year
|
|
Assumed
|
|
Fleet
|
|
Contribution
|
|
Total
|
Three Months Ended September 30, 2024 |
|
|
(1.5)% |
|
|
|
|
|
|
Nine Months Ended September 30, 2024 |
|
|
(1.5)% |
|
|
|
|
|
|
Please refer to our Third Quarter 2024 Investor Presentation for additional detail on fleet productivity.
(1) |
Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost. |
(2) |
Reflects the combined impact of changes in rental rates, time utilization and mix on owned equipment rental revenue. Changes in customers, fleet, geographies and segments all contribute to changes in mix. |
(3) |
Reflects the combined impact of changes in other types of equipment rental revenue: ancillary and re-rent (excludes owned equipment rental revenue). |
UNITED RENTALS, INC. SEGMENT PERFORMANCE ($ in millions) |
|||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
September 30, |
|
September 30, |
||||||||
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
General Rentals |
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals revenue |
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals gross profit |
874 |
|
872 |
|
|
|
2,357 |
|
2,323 |
|
|
Reportable segment equipment rentals gross margin |
|
|
|
|
(20) bps |
|
|
|
|
|
— bps |
Specialty |
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals revenue |
|
|
|
|
|
|
|
|
|
|
|
Reportable segment equipment rentals gross profit |
568 |
|
478 |
|
|
|
1,473 |
|
1,203 |
|
|
Reportable segment equipment rentals gross margin |
|
|
|
|
(210) bps |
|
|
|
|
|
(40) bps |
Total United Rentals |
|
|
|
|
|
|
|
|
|
|
|
Total equipment rentals revenue |
|
|
|
|
|
|
|
|
|
|
|
Total equipment rentals gross profit |
1,442 |
|
1,350 |
|
|
|
3,830 |
|
3,526 |
|
|
Total equipment rentals gross margin |
|
|
|
|
(30) bps |
|
|
|
|
|
50 bps |
UNITED RENTALS, INC. DILUTED EARNINGS PER SHARE CALCULATION (In millions, except per share data) |
|||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
September 30, |
|
September 30, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Numerator: |
|
|
|
|
|
|
|
||||
Net income available to common stockholders |
$ |
708 |
|
$ |
703 |
|
$ |
1,886 |
|
$ |
1,745 |
Denominator: |
|
|
|
|
|
|
|
||||
Denominator for basic earnings per share—weighted-average common shares |
|
66.0 |
|
|
68.2 |
|
|
66.6 |
|
|
68.8 |
Effect of dilutive securities: |
|
|
|
|
|
|
|
||||
Employee stock options |
|
— |
|
|
— |
|
|
— |
|
|
— |
Restricted stock units |
|
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
Denominator for diluted earnings per share—adjusted weighted-average common shares |
|
66.2 |
|
|
68.3 |
|
|
66.8 |
|
|
68.9 |
Diluted earnings per share |
$ |
10.70 |
|
$ |
10.29 |
|
$ |
28.25 |
|
$ |
25.30 |
UNITED RENTALS, INC.
ADJUSTED EARNINGS PER SHARE GAAP RECONCILIATION
We define “earnings per share – adjusted” as the sum of earnings per share – GAAP, as-reported plus the impact of the following special items: merger related intangible asset amortization, impact on depreciation related to acquired fleet and property and equipment, impact of the fair value mark-up of acquired fleet, restructuring charge, asset impairment charge and loss on repurchase/redemption/amendment of debt securities. See below for further detail on the special items. Management believes that earnings per share - adjusted provides useful information concerning future profitability. However, earnings per share - adjusted is not a measure of financial performance under GAAP. Accordingly, earnings per share - adjusted should not be considered an alternative to GAAP earnings per share. The table below provides a reconciliation between earnings per share – GAAP, as-reported, and earnings per share – adjusted.
|
Three Months Ended |
|
Nine Months Ended |
||||
|
September 30, |
|
September 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Earnings per share - GAAP, as-reported |
|
|
|
|
|
|
|
After-tax (1) impact of: |
|
|
|
|
|
|
|
Merger related intangible asset amortization (2) |
0.53 |
|
0.57 |
|
1.60 |
|
1.83 |
Impact on depreciation related to acquired fleet and property and equipment (3) |
0.38 |
|
0.59 |
|
1.17 |
|
1.21 |
Impact of the fair value mark-up of acquired fleet (4) |
0.15 |
|
0.23 |
|
0.52 |
|
0.92 |
Restructuring charge (5) |
0.01 |
|
0.05 |
|
0.03 |
|
0.26 |
Asset impairment charge (6) |
0.03 |
|
— |
|
0.04 |
|
— |
Loss on repurchase/redemption/amendment of debt securities |
— |
|
— |
|
0.01 |
|
— |
Earnings per share - adjusted |
|
|
|
|
|
|
|
Tax rate applied to above adjustments (1) |
|
|
|
|
|
|
|
(1) |
The tax rates applied to the adjustments reflect the statutory rates in the applicable entities. |
(2) |
Reflects the amortization of the intangible assets acquired in the major acquisitions completed since 2012 that significantly impact our operations (the "major acquisitions," each of which had annual revenues of over |
(3) |
Reflects the impact of extending the useful lives of equipment acquired in certain major acquisitions, 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 associated with the fair value mark-up of rental equipment acquired in certain major acquisitions and subsequently sold. The decrease in 2024 primarily reflects decreased sales of rental equipment acquired in the Ahern Rentals acquisition. |
(5) |
Primarily reflects severance and branch closure charges associated with our restructuring programs. We only include such costs that are part of a restructuring program as restructuring charges. The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program. The 2023 amounts above primarily reflect charges associated with the restructuring program initiated following the closing of the Ahern Rentals acquisition. Since the first such restructuring program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of |
(6) |
Reflects write-offs of leasehold improvements and other fixed assets. |
UNITED RENTALS, INC.
EBITDA AND ADJUSTED EBITDA GAAP RECONCILIATIONS
($ in millions, except footnotes)
EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment, and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the restructuring charges, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet. See below for further detail on each adjusting item. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, 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. The net income and adjusted EBITDA margins represent net income or adjusted EBITDA divided by total revenue. 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 help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced.
The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA.
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30, |
|
September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
708 |
|
|
$ |
703 |
|
|
$ |
1,886 |
|
|
$ |
1,745 |
|
Provision for income taxes |
|
241 |
|
|
|
240 |
|
|
|
593 |
|
|
|
564 |
|
Interest expense, net |
|
178 |
|
|
|
163 |
|
|
|
511 |
|
|
|
474 |
|
Depreciation of rental equipment |
|
629 |
|
|
|
588 |
|
|
|
1,819 |
|
|
|
1,755 |
|
Non-rental depreciation and amortization |
|
109 |
|
|
|
107 |
|
|
|
322 |
|
|
|
329 |
|
EBITDA |
$ |
1,865 |
|
|
$ |
1,801 |
|
|
$ |
5,131 |
|
|
$ |
4,867 |
|
Restructuring charge (1) |
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
24 |
|
Stock compensation expense, net (2) |
|
24 |
|
|
|
23 |
|
|
|
79 |
|
|
|
72 |
|
Impact of the fair value mark-up of acquired fleet (3) |
|
14 |
|
|
|
21 |
|
|
|
47 |
|
|
|
85 |
|
Adjusted EBITDA |
$ |
1,904 |
|
|
$ |
1,850 |
|
|
$ |
5,260 |
|
|
$ |
5,048 |
|
Net income margin |
|
17.7 |
% |
|
|
18.7 |
% |
|
|
16.8 |
% |
|
|
16.5 |
% |
Adjusted EBITDA margin |
|
47.7 |
% |
|
|
49.1 |
% |
|
|
46.8 |
% |
|
|
47.6 |
% |
(1) |
Primarily reflects severance and branch closure charges associated with our restructuring programs. We only include such costs that are part of a restructuring program as restructuring charges. The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program. The 2023 amounts above primarily reflect charges associated with the restructuring program initiated following the closing of the Ahern Rentals acquisition. Since the first such restructuring program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of |
(2) |
Represents non-cash, share-based payments associated with the granting of equity instruments. |
(3) |
Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions and subsequently sold. The decrease in 2024 primarily reflects decreased sales of rental equipment acquired in the Ahern Rentals acquisition. |
UNITED RENTALS, INC.
EBITDA AND ADJUSTED EBITDA GAAP RECONCILIATIONS (continued)
(In millions, except footnotes)
The table below provides a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA.
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30, |
|
September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
1,204 |
|
|
$ |
1,062 |
|
|
$ |
3,498 |
|
|
$ |
3,290 |
|
Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA: |
|
|
|
|
|
|
|
||||||||
Amortization of deferred financing costs and original issue discounts |
|
(4 |
) |
|
|
(4 |
) |
|
|
(11 |
) |
|
|
(11 |
) |
Gain on sales of rental equipment |
|
145 |
|
|
|
181 |
|
|
|
505 |
|
|
|
567 |
|
Gain on sales of non-rental equipment |
|
5 |
|
|
|
6 |
|
|
|
13 |
|
|
|
16 |
|
Insurance proceeds from damaged equipment |
|
14 |
|
|
|
11 |
|
|
|
38 |
|
|
|
30 |
|
Restructuring charge (1) |
|
(1 |
) |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
(24 |
) |
Stock compensation expense, net (2) |
|
(24 |
) |
|
|
(23 |
) |
|
|
(79 |
) |
|
|
(72 |
) |
Loss on repurchase/redemption/amendment of debt securities |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Changes in assets and liabilities |
|
93 |
|
|
|
206 |
|
|
|
(185 |
) |
|
|
187 |
|
Cash paid for interest |
|
227 |
|
|
|
190 |
|
|
|
544 |
|
|
|
495 |
|
Cash paid for income taxes, net |
|
206 |
|
|
|
177 |
|
|
|
812 |
|
|
|
389 |
|
EBITDA |
$ |
1,865 |
|
|
$ |
1,801 |
|
|
$ |
5,131 |
|
|
$ |
4,867 |
|
Add back: |
|
|
|
|
|
|
|
||||||||
Restructuring charge (1) |
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
24 |
|
Stock compensation expense, net (2) |
|
24 |
|
|
|
23 |
|
|
|
79 |
|
|
|
72 |
|
Impact of the fair value mark-up of acquired fleet (3) |
|
14 |
|
|
|
21 |
|
|
|
47 |
|
|
|
85 |
|
Adjusted EBITDA |
$ |
1,904 |
|
|
$ |
1,850 |
|
|
$ |
5,260 |
|
|
$ |
5,048 |
|
(1) |
Primarily reflects severance and branch closure charges associated with our restructuring programs. We only include such costs that are part of a restructuring program as restructuring charges. The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program. The 2023 amounts above primarily reflect charges associated with the restructuring program initiated following the closing of the Ahern Rentals acquisition. Since the first such restructuring program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of |
(2) |
Represents non-cash, share-based payments associated with the granting of equity instruments. |
(3) |
Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions and subsequently sold. The decrease in 2024 primarily reflects decreased sales of rental equipment acquired in the Ahern Rentals acquisition. |
UNITED RENTALS, INC.
FREE CASH FLOW GAAP RECONCILIATION
(In millions, except footnotes)
We define “free cash flow” as net cash provided by operating activities less payments for purchases of, and plus proceeds from, equipment and intangible assets. The equipment and intangible asset items are included in cash flows from investing activities. 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 is not a measure of financial performance or liquidity under GAAP. Accordingly, free cash flow 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.
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
September 30, |
|
September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
1,204 |
|
|
$ |
1,062 |
|
|
$ |
3,498 |
|
|
$ |
3,290 |
|
Payments for purchases of rental equipment |
|
(1,312 |
) |
|
|
(1,030 |
) |
|
|
(3,178 |
) |
|
|
(3,078 |
) |
Payments for purchases of non-rental equipment and intangible assets |
|
(101 |
) |
|
|
(88 |
) |
|
|
(266 |
) |
|
|
(267 |
) |
Proceeds from sales of rental equipment |
|
321 |
|
|
|
366 |
|
|
|
1,069 |
|
|
|
1,136 |
|
Proceeds from sales of non-rental equipment |
|
20 |
|
|
|
18 |
|
|
|
50 |
|
|
|
46 |
|
Insurance proceeds from damaged equipment |
|
14 |
|
|
|
11 |
|
|
|
38 |
|
|
|
30 |
|
Free cash flow (1) |
$ |
146 |
|
|
$ |
339 |
|
|
$ |
1,211 |
|
|
$ |
1,157 |
|
(1) |
Free cash flow included aggregate merger and restructuring related payments of |
The table below provides a reconciliation between 2024 forecasted net cash provided by operating activities and free cash flow.
Net cash provided by operating activities |
|
|
Payments for purchases of rental equipment |
|
|
Proceeds from sales of rental equipment |
|
|
Payments for purchases of non-rental equipment and intangible assets, net of proceeds from sales and insurance proceeds from damaged equipment |
|
|
Free cash flow excluding merger and restructuring related payments |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241023662414/en/
Elizabeth Grenfell
Vice President, Investor Relations
O: (203) 618-7125
investors@ur.com
Source: United Rentals, Inc.
FAQ
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