Q4 2023 Earnings Report
EBITDA and Adjusted EBITDA GAAP Reconciliations (cont'd)
The pro forma information below reflects the combination of United Rentals and Ahern Rentals. Prior to the acquisition, Ahern Rentals management used different EBITDA and adjusted EBITDA definitions than those used by United Rentals. The
information below reflects the historical information for Ahern Rentals presented in accordance with United Rentals' definitions of EBITDA and adjusted EBITDA. See below for further detail on each adjusting item. The management of Ahern Rentals
historically did not view EBITDA and adjusted EBITDA as liquidity measures, and accordingly the information required to reconcile these measures to the statement of cash flows is unavailable to the company. The table below provides a calculation of
as-reported and pro forma net income and EBITDA and adjusted EBITDA.
Three Months Ended
United Rentals®
$ millions
2023
As
reported
As
reported
December 31,
2022
2022
Ahern
Rentals
Year Ended
December 31,
2022
2023
Pro
forma
2022
2022
As
As
Ahern
reported reported Rentals
2022
Pro
forma
Net income
$ 679
$ 639
$ 7
$ 646
$2,424
$2,105 $ 2
$2,107
Provision for income taxes
223
256
256
787
697
697
Interest expense, net
161
132
11
143
635
445
53
498
Depreciation of rental
equipment
595
491
15
506
2,350
1,853
84
1,937
Non-rental depreciation and
102
86
4
90
431
364
22
386
amortization
EBITDA
$1,760
$1,604
$ 37
$1,641
$6,627
$5,464
$ 161
$5,625
Restructuring charge (1)
4
_
28
Stock compensation expense,
22
32
32
94
127
127
net (2)
Impact of the fair value mark-
up of acquired fleet (3)
23
11
11
108
27
27
Ahern Rentals adjustments
(4)
Adjusted EBITDA
30
30
135
135
$ 1,809
$1,647
$ 67
$1,714
$6,857
$5,618
Net income margin
18.2 %
19.4 %
4.0 %
18.6 %
16.9 %
Adjusted EBITDA margin
48.5 %
50.0 %
38.7 %
49.4 %
47.8 %
18.1 %
48.3 %
$ 296
0.2 %
35.8 %
$5,914
16.9 %
47.4 %
1)
2)
3)
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 4)
of a restructuring program. Since the first such restructuring program was initiated in 2008, we have
completed seven restructuring programs. In the first quarter of 2023, we initiated a restructuring
program following the closing of the Ahern Rentals acquisition, and this program was completed in the
fourth quarter of 2023. There are no open restructuring programs as of December 31, 2023. The
increase in 2023 reflects charges associated with the restructuring program initiated following the
closing of the Ahern Rentals acquisition. We have cumulatively incurred total restructuring charges of
$380 million under our restructuring programs.
Represents non-cash, share-based payments associated with the granting of equity instruments.
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
increase in 2023 primarily reflects the impact of the Ahern Rentals acquisition.
Includes various adjustments reflected in historic adjusted EBITDA for Ahern Rentals, primarily
representing (1) lease costs associated with equipment that has been purchased by United Rentals
(after purchase, the associated expense would be recognized as depreciation which is excluded in
the EBITDA calculation) and (2) costs that do not relate to the combined entity (such as legal costs
incurred by Ahern Rentals related to a particular lawsuit, certain freight costs to move equipment from
closed locations in excess of normal operating movement, costs related to an attempted financing,
and exit costs on lease terminations).
Work United®
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