Capital Allocation and Digital Strategy Update
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
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Net cash provided by operating activities
$ 1,414
$ 1,251
$ 4,704 $ 4,433
Payments for purchases of rental equipment
Proceeds from sales of rental equipment
Proceeds from sales of non-rental equipment
(636)
(980)
(3,714)
(3,436)
Payments for purchases of non-rental equipment and intangible assets
(89)
(72)
(356)
(254)
438
409
1,574
965
14
9
60
24
Insurance proceeds from damaged equipment
Free cash flow (1)
8
7
38
32
$ 1,149
$
624
$ 2,306 $ 1,764
1)
Free cash flow included aggregate merger and restructuring related payments of $2 million and $1 million for the three months ended December 31, 2023 and
2022, respectively, and $8 million and $4 million for the years ended December 31, 2023 and 2022, respectively.
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
United Rentals®
Work United®
$4,150-$4,750
$(3,300)-$(3,800)
$1,400-$1,600
$(250)-$(350)
$2,000-$2,200
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