Executing for Growth and Returns
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 costs,
merger related intangible asset amortization, impact on depreciation related to acquired RSC and NES fleet and property and equipment, impact of the fair value mark-up of
acquired RSC and NES fleet, impact on interest expense related to fair value adjustment of acquired RSC indebtedness, restructuring charge, asset impairment charge and
loss on repurchase/redemption of debt securities and amendment of ABL facility. 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
Six Months Ended
June 30,
Earnings per share - GAAP, as reported
After-tax impact of:
Merger related costs (1)
June 30,
2017
2016
2017
2016
$
1.65 $
1.52
$ 2.92 $
2.52
0.09
0.11
Merger related intangible asset amortization (2)
0.30
0.28
0.57
0.57
Impact on depreciation related to acquired RSC and NES fleet and property and
equipment (3)
(0.03)
(0.02)
Impact of the fair value mark-up of acquired RSC and NES fleet (4)
0.13
0.06
0.19
0.13
Impact on interest expense related to fair value adjustment of acquired RSC
indebtedness (5)
Restructuring charge (6)
Asset impairment charge (7)
(0.01)
0.14
0.02
0.14
0.03
0.02
Loss on repurchase/redemption of debt securities and amendment of ABL facility
Earnings per share - adjusted
Tax rate applied to above adjustments (8)
0.09
$
0.18
2.37 $ 2.06
38.5%
38.4 %
0.09
0.18
$ 4.00 $
38.5%
3.44
38.4 %
(1)
Reflects transaction costs associated with the NES acquisition discussed above. We have made a
number of acquisitions in the past and may continue to make acquisitions in the future. Merger
related costs only include costs associated with major acquisitions that significantly impact our
operations. The historic acquisitions that have included merger related costs are RSC, which had
annual revenues of approximately $1.5 billion prior to the acquisition, and National Pump, which
had annual revenues of over $200 million prior to the acquisition. NES has annual revenues of
approximately $369 million.
(4)
(5)
(6)
(2)
Reflects the amortization of the intangible assets acquired in the RSC, National Pump and NES
acquisitions.
(3)
Reflects the impact of extending the useful lives of equipment acquired in the RSC and NES
acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of
such equipment.
(7)
(8)
United Rentals
Reflects additional costs recorded in cost of rental equipment sales associated with the the fair value
mark-up of rental equipment acquired in the RSC and NES acquisitions and subsequently sold.
Reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the
RSC acquisition.
Primarily reflects severance and branch closure charges associated with our closed restructuring
programs and our current restructuring program. We only include such costs that are part of a
restructuring program as restructuring charges. Since the first such restructuring program was
initiated in 2008, we have completed three restructuring programs. We have cumulatively incurred
total restructuring charges of $253 million under our restructuring programs.
Reflects write-offs of fixed assets in connection with our restructuring programs.
The tax rates applied to the adjustments reflect the statutory rates in the applicable entity.
Executing for Growth and Returns 21View entire presentation