Investor Presentaiton
EBITDA and Adjusted EBITDA GAAP Reconciliations
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 merger related costs,
restructuring charge, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet. 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 EBITDA and adjusted EBITDA margins
represent EBITDA 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. However, EBITDA and adjusted EBITDA are not measures of financial
performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity. The table below provides a reconciliation between net
income and EBITDA and adjusted EBITDA.
The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA.
$ Millions
Net income
Provision for income taxes
Interest expense, net
Depreciation of rental equipment
Non-rental depreciation and amortization
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
$
338
$
310
$
1,174 $ 1,096
95
115
340
380
170
142
648
481
420
375
1,631
1,363
96
95
407
308
$
1,119
$
1,037
$
4,200
$
3,628
22
1
36
2
16
18
31
Stock compensation expense, net (3)
Impact of the fair value mark-up of acquired fleet (4)
16
29
61
102
17
13
75
66
Adjusted EBITDA (B)
$ 1,154 $
1,117
$
4,355 $
3,863
(A)
Our EBITDA margin was 45.6% and 45.0% for the three months ended December 31, 2019 and 2018, respectively, and 44.9% and 45.1% for the years ended
December 31, 2019 and 2018, respectively.
(B)
EBITDA (A)
Merger related costs (1)
Restructuring charge (2)
(1)
Our adjusted EBITDA margin was 47.0% and 48.4% for the three months ended December 31, 2019 and 2018, respectively, and 46.6% and 48.0% for the years
ended December 31, 2019 and 2018, respectively.
Reflects transaction costs associated with the BakerCorp and BlueLine acquisitions 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 had annual revenues of approximately $369 million, Neff had annual revenues of approximately $413 million,
BakerCorp had annual revenues of approximately $295 million and BlueLine had annual revenues of approximately $786 million.
United Rentals®
(2)
(3)
(4)
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 four restructuring programs. We have
cumulatively incurred total restructuring charges of $333 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 the RSC, NES, Neff and BlueLine acquisitions and subsequently sold.
United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. 2020 United Rentals, Inc. All rights reserved.
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