United Rentals Financial Performance and Market Exposure
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 rental
depreciation related to acquired fleet and property and equipment, impact of the fair value mark-up of acquired fleet, 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.
-
-
-
$ Millions
Earnings per share - GAAP, as reported (1)
After-tax impact of:
Merger related costs (2)
Three Months Ended
December 31,
Year Ended
December 31,
2018
2017
2018
2017
$
3.80
$ 10.45
$ 13.12
$ 15.73
0.21
0.13
0.32
0.36
Merger related intangible asset amortization (3)
0.58
0.32
1.76
1.15
Impact on depreciation related to acquired fleet and property and equipment (4)
Impact of the fair value mark-up of acquired fleet (5)
Restructuring charge (6)
Asset impairment charge (7)
0.01
0.19
0.05
0.11
0.23
0.59
0.59
0.15
0.15
0.28
0.36
0.01
Loss on repurchase/redemption of debt securities and amendment of ABL facility
Earnings per share - adjusted (1)
Tax rate applied to above adjustments (1)
0.08
0.39
4.85
11.37
$ 16.26
$
18.64
25.7 %
38.6 %
25.5%
38.5 %
Reflects the amortization of the intangible assets acquired in the RSC, National Pump, NES, Neff, BakerCorp and Blue Line acquisitions.
Reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff, BakerCorp and Blue Line acquisitions, net
of the impact of additional depreciation associated with the fair value mark-up of such equipment.
(5)
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 Blue Line acquisitions and subsequently sold.
(6)
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 $315 million under our restructuring programs.
(1)
The three months and year ended December 31, 2018 reflect a reduction in the U.S. federal corporate statutory tax rate from 35% to
21% following the enactment of the Tax Act discussed above, which contributed an estimated $0.68 and $2.36, respectively, to
earnings per share-GAAP, and $0.86 and $2.92, respectively, to earnings per share-adjusted, for the three months and year ended
December 31, 2018. Earnings per share - GAAP, as reported and earnings per share - adjusted include estimated benefits of $8.03
and $8.05 for the three months and year ended December 31, 2017, respectively, associated with the enactment of the Tax Act. The
tax rates applied to the adjustments reflect the statutory rates in the applicable entities.
(2) Reflects transaction costs associated with the NES, Neff, 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 Blue Line had annual
revenues of approximately $786 million.
United Rentals®
(3)
(4)
United Rentals, Inc., 100 First Stamford Place, Stamford, CT 06902. © 2018 United Rentals, Inc. All rights reserved.
(7)
Reflects write-offs of leasehold improvements and other fixed assets in connection with our restructuring programs
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