URI
UNITED RENTALS Inc
164.2900
1.94%
164.2900
1.94%
100.6210 165.6000
52 weeks
52 weeks

Mkt Cap 13.89B

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United: 100 First Stamford Place

The following excerpt is from the company's SEC filing.

Suite 700

Stamford, CT 06902

Telephone: 203 622 3131

Fax: 203 622 6080

unitedrentals.com

United Rentals Announces Third Quarter 2015 Results

Reaffirms Full Year Outlook

STAMFORD, Conn.

October 21, 2015

– United Rentals, Inc. (NYSE: URI) today announced financial results for the

quarter 2015. Total revenue was $

1.550 billion

and rental revenue was $

1.326 billion

, compared with $

1.544 billion

and $

1.315 billion

, respectively, for the same period last year. On a GAAP basis, the company reported

quarter net income of $

million, or $

per diluted share, compared with $

per diluted share, for the same period last year.

Adjusted EPS

for the quarter was

per diluted share for the same period last year. Adjusted EBITDA

million and adjusted EBITDA margin was a quarterly company

record at

%, an increase of $

basis points, respectively, from the same period last year.

Third Quarter 2015 Highlights

Rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) increased

year-over-year.

Within rental revenue, owned equipment rental revenue increased

, reflecting a year-over-year increase of

in the volume of equipment on rent, partially offset by a

decrease in rental rates.

The company’s Trench Safety and Power & HVAC businesses' rental revenue increased by a combined 17.9% year-over-year, primarily on a same store basis.

Return on invested capital was

for the 12 months ended

September 30, 2015

percentage points from the 12 months ended

September 30, 2014

Time utilization decreased

basis points year-over-year to

. Excluding the branches with the most exposure to upstream oil and gas, time utilization decreased 60 basis points year-over-year.

The company generated $

million of proceeds from used equipment sales at an adjusted gross margin of

_______________

Adjusted EPS is a non-GAAP measure that excludes the impact of the following special items: (i) merger related costs; (ii) restructuring charge; (iii) impact on interest expense related to fair value adjustment of acquired RSC indebtedness; (iv) impact on depreciation related to acquired RSC fleet and property and equipment; (v) impact of the fair value mark-up of acquired RSC fleet; (vi) merger related intangible asset amortization and (vii) loss on repurchase/redemption of debt securities and amendment of ABL facility. See table below for amounts.

Adjusted EBITDA is a non-GAAP measure that excludes the impact of the following special items: (i) merger related costs; (ii) restructuring charge; (iii) impact of the fair-value mark up of acquired RSC fleet and (iv) stock compensation expense, net. See table below for amounts.

rental revenue increase includes an adverse impact from currency. Excluding this impact, rental revenue would have increased

Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of acquired RSC fleet that was sold.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "The third quarter unfolded much as we had anticipated. We delivered a robust performance in our Trench Safety and Power & HVAC businesses, aided by cross-selling. As expected, we saw rate and time pressure on our general rental business from the continued impact of upstream oil and gas activity and a weak Canadian dollar. We ran our operations with great cost discipline in this environment, generating solid financial results and strong free cash flow. Our EBITDA margin, at over 50%, was the highest of any quarter in our company’s history."

Kneeland continued, "Based on our year-to-date performance, and our visibility into fourth quarter, we’ve reaffirmed our full year outlook for 2015. We’re now in the midst of planning for 2016, which we believe will be another solid year of industry growth. This is supported by customer optimism and industry forecasts for 2016 and several years beyond. All of these factors, as well as the timing of current headwinds, will shape how we manage capex, rates and utilization in the coming year."

Nine Months 2015 Highlights

4.294 billion

3.671 billion

4.121 billion

3.499 billion

Rental revenue increased

, reflecting year-over-year increases of

in the volume of equipment on rent and

The company’s Trench Safety and Power & HVAC businesses' rental revenue increased by a combined 23.7% year-over-year, primarily on a same store basis.

2.088 billion

. Excluding the branches with the most exposure to upstream oil and gas, time utilization decreased 30 basis points year-over-year.

Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was

2015 Outlook

The Company has reaffirmed the following full year outlook:

$5.8 billion to $5.9 billion

$2.80 billion to $2.85 billion

Increase in rental rates (year-over-year)

Approximately 0.5%

Approximately 67.5%

Net rental capital expenditures after gross purchases

Approximately $1.1 billion, after gross purchases of approximately $1.6 billion

Free cash flow (excluding the impact of merger and restructuring related costs)

$725 million to $775 million

On April 1, 2014, the company acquired certain assets of the following four entities: National Pump & Compressor, Ltd., Canadian Pump and Compressor Ltd., GulfCo Industrial Equipment, LP and LD Services, LLC (collectively “National Pump”). National Pump is included in the company's results subsequent to the acquisition date. Excluding the impact of the National Pump acquisition, rental revenue for the first

months of 2015 increased

Free Cash Flow and Fleet Size

For the first

months of 2015, free cash flow was $

million, after total rental and non-rental gross capital expenditures of $

billion. By comparison, free cash flow for the first

months of 2014 was $

million after total rental and non-rental gross capital expenditures of $

The size of the rental fleet was $

billion of original equipment cost at

, compared with $8.44 billion at December 31, 2014. The age of the rental fleet was

months on an OEC-weighted basis at

Share Repurchase Programs

As of

, the company has repurchased $740 million of common stock as part of the $750 million share repurchase program that was announced in December 2014. The company expects to complete the program in 2015. Upon its completion, the company expects to begin the new $1 billion share repurchase program that was announced in July 2015. The company intends to complete the new $1 billion share repurchase program within 18 months of its initiation.

Return on Invested Capital (ROIC)

. The company’s ROIC metric uses after-tax operating income for the trailing 12 months divided by average stockholders’ equity (deficit), 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 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, October 22, 2015, at 11:00 a.m. Eastern Time. The conference call number is 866-227-1582. The conference call will also be available live by audio webcast at unitedrentals.com, where it will be archived until the next earnings call. The replay number for the call is 703-925-2533, passcode is 1664054.

Free cash flow for the first

months of 2015 and 2014 includes aggregate merger and restructuring related payments of $3 million and $16 million, respectively.

When adjusting the denominator of the ROIC calculation to also exclude average goodwill, ROIC was

Non-GAAP Measures

Free cash flow, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, and adjusted earnings per share (adjusted EPS) are non-GAAP financial measures as defined under the rules of the SEC. Free cash flow represents net cash provided by operating activities, less purchases of rental and non-rental equipment plus proceeds from sales of...


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