M&A Strategy and Financial Overview
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.
United Rentals®
1)
2)
Three Months Ended
September 30,
Nine Months Ended
September 30,
$ millions
2023
As
reported
2022
As
reported
2022
Ahern
Rentals
2022
2023
Pro
forma
As
reported
2022
As
reported
2022
2022
Ahern
Rentals
Pro forma
Net income (loss)
$
703
$ 606
$
1
$ 607
$1,745
$ 1,466
$ (5)
$ 1,461
Provision for income taxes
240
210
210
564
441
441
Interest expense, net
163
106
15
121
474
313
42
355
Depreciation of rental equipment
588
470
24
494
1,755
1,362
69
1,431
Non-rental depreciation and
amortization
107
90
6
96
329
278
18
296
EBITDA
$ 1,801
$ 1,482
$ 46
$ 1,528
$ 4,867
$ 3,860
$ 124
$ 3,984
Restructuring charge (1)
5
(1)
(1)
24
Stock compensation expense, net (2)
Impact of the fair value mark-up of
acquired fleet (3)
23
35
35
72
95
95
21
5
5
85
16
16
Ahern Rentals adjustments (4)
36
36
105
105
Adjusted EBITDA
$ 1,850
Net income (loss) margin
Adjusted EBITDA margin
18.7 %
49.1 %
$1,521
19.9 %
49.9 %
$ 82
0.4 %
36.3 %
$ 1,603
18.5 %
48.9 %
$ 5,048
$ 3,971
16.5 %
47.6 %
17.6 %
47.6 %
$ 229
(0.8) %
35.0 %
$ 4,200
16.2 %
46.7 %
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 of a restructuring
program. Since the first such restructuring program was initiated in 2008, we have completed six
restructuring programs. In the first quarter of 2023, we initiated a restructuring program following the closing
of the Ahern Rentals acquisition, which is our only open restructuring program as of September 30, 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 $376
million under our restructuring programs.
Represents non-cash, share-based payments associated with the granting of equity instruments.
3)
4)
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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