Q4 2023 Earnings Report
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 restructuring charges, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet. See below for further detail on each adjusting item. 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 net income and adjusted EBITDA margins represent net income 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.
The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA.
United Rentals®
Three Months Ended
$ millions
Net income
Provision for income taxes
Interest expense, net
Depreciation of rental equipment
Non-rental depreciation and amortization
December 31,
2023
2022
$ 679
$ 639
2023
$2,424
Year Ended
December 31,
2022
$2,105
223
256
787
697
161
132
635
445
595
491
2,350
1,853
102
86
431
364
EBITDA
$1,760
$1,604
$6,627
$5,464
Restructuring charge (1)
4
―
28
—
Stock compensation expense, net (2)
22
32
94
127
Impact of the fair value mark-up of acquired fleet (3)
23
11
108
27
Adjusted EBITDA
$1,809
$1,647
$6,857
$5,618
Net income margin
18.2 %
19.4 %
16.9 %
18.1 %
Adjusted EBITDA margin
48.5 %
50.0 %
47.8 %
48.3 %
1) 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 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.
2)
Represents non-cash, share-based payments associated with the granting of equity instruments.
3) 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.
Work United®
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