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.
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
EBITDA (A)
Merger related costs (1)
Restructuring charge (2)
Stock compensation expense, net (3)
Impact of the fair value mark-up of acquired fleet (4)
Adjusted EBITDA (B)
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
$ 270 $ 270
$
445 $
453
81
89
126
138
180
112
331
221
399
323
794
645
105
67
209
138
$
1,035
$
861
$ 1,905
$
1,595
2
1
3
6
4
14
6
16
24
31
43
16
16
43
40
$
1,073
$
907
1,994
$
1,687
A) Our EBITDA margin was 45.2% and 45.5% for the three months ended June 30, 2019 and 2018, respectively, and 43.2% and 44.0% for the six months ended June 30, 2019 and 2018, respectively.
B) Our adjusted EBITDA margin was 46.9% and 48.0% for the three months ended June 30, 2019 and 2018, respectively, and 45.2% and 46.5% for the six months ended June 30, 2019 and 2018, respectively.
(1)
Reflects transaction costs associated with the NES, Neff, BakerCorp and BlueLine acquisitions. 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®
Represents non-cash, share-based payments associated with the granting of equity instruments.
(2)
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 $329 million under our restructuring programs.
(3)
(4)
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. 2018 United Rentals, Inc. All rights reserved.
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