|
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|
|
|
Delaware
|
|
001-14387
|
|
06-1522496
|
Delaware
|
|
001-13663
|
|
86-0933835
|
(State or other Jurisdiction
of Incorporation)
|
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(Commission
File Number)
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(IRS Employer
Identification No.)
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100 First Stamford Place, Suite 700
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Stamford
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Connecticut
|
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06902
|
(Address of Principal Executive Offices)
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(Zip Code)
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(Former name or former address if changed since last report.)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
|
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $.01 par value, of United Rentals, Inc.
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URI
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New York Stock Exchange
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
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Emerging growth company
|
☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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☐
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UNITED RENTALS, INC.
|
||
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By:
|
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/S/ Craig A. Pintoff
|
|
|
Name: Craig A. Pintoff
|
|
|
Title: Executive Vice President, Chief Administrative and Legal Officer
|
|
||
UNITED RENTALS (NORTH AMERICA), INC.
|
||
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|
|
By:
|
|
/S/ Craig A. Pintoff
|
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|
Name: Craig A. Pintoff
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Title: Executive Vice President, Chief Administrative and Legal Officer
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|
Exhibit
No.
|
|
Description
|
|
|
|
99.1
|
|
|
|
|
|
•
|
Rental Revenue: Rental revenue3 for the fourth quarter was $2.062 billion, reflecting increases of 3.7% and 0.8% year-over-year on an as-reported and pro forma basis, respectively.
|
1.
|
The company completed the acquisitions of BakerCorp International Holdings, Inc. (“BakerCorp”) and Vander Holding Corporation and its subsidiaries (“BlueLine”) in July 2018 and October 2018, respectively. BakerCorp and BlueLine are included in the company's results subsequent to the acquisition dates. Pro forma results reflect the combination of United Rentals, BakerCorp and BlueLine for all periods presented. The acquired BakerCorp locations are reflected in the Trench, Power and Fluid Solutions specialty segment.
|
2.
|
Adjusted EPS (earnings per share) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) are non-GAAP measures as defined in the tables below. See the tables below for amounts and reconciliations to the most comparable GAAP measures. Adjusted EBITDA margin represents adjusted EBITDA divided by total revenue.
|
3.
|
Rental revenue includes owned equipment rental revenue, re-rent revenue and ancillary revenue.
|
•
|
Fleet Productivity4: On an as reported basis, fourth quarter fleet productivity decreased 2.4% year-over-year. On a pro forma basis, fleet productivity decreased 1.8%, as the combined benefit from rental rates and mix did not offset the impact of lower time utilization.
|
•
|
Used Equipment: The company generated $244 million of proceeds from used equipment sales in the fourth quarter at a GAAP gross margin of 36.5% and an adjusted gross margin of 43.4%5; this compares with $186 million at a GAAP gross margin of 44.1% and an adjusted gross margin of 51.1% for the same period last year. The year-over-year decrease in adjusted gross margin was primarily due to changes in the mix of equipment sold, channel mix and pricing.
|
•
|
Profitability: Net income for the fourth quarter increased 9.0% year-over-year to $338 million. Net interest expense increased $28 million year-over-year primarily due to a loss of $29 million associated with the full redemption of our 4 5/8 percent Senior Secured Notes, and the effective tax rate decreased 520 basis points year-over-year primarily due to favorable changes in the state jurisdictional mix of income. Operating income increased 6.4% year-over-year to $599 million. Adjusted EBITDA increased 3.3% year-over-year to $1.154 billion, while adjusted EBITDA margin decreased 140 basis points to 47.0%. On a pro forma basis, year-over-year, net income excluding merger costs recognized by BlueLine prior to acquisition increased 9.4%, adjusted EBITDA increased 0.8% and adjusted EBITDA margin decreased 130 basis points. The decline in both as reported and pro forma adjusted EBITDA margin primarily reflects the impact of the absorption of higher rental operating costs in a slower-growth environment, including costs related to repair and maintenance of fleet in upstream oil and gas markets, and the increase in lower-margin used equipment sales, partially offset by lower SG&A costs.
|
•
|
General rentals: Year-over-year, fourth quarter rental revenue for the company’s general rentals segment increased by 2.4% and decreased by 1.3% on an actual and pro forma basis, respectively. Rental gross margin decreased by 430 basis points to 39.9%, due primarily to the impact of the absorption of higher rental operating costs as noted above, including higher repair and maintenance expenses, as well as increased depreciation of rental equipment as a result of the BlueLine acquisition.
|
•
|
Specialty: Fourth quarter rental revenue for the company’s specialty segment, Trench, Power and Fluid Solutions, increased by 8.7% year-over-year, including an organic increase of 4.6%. Rental gross margin decreased by 140 basis points to 43.8%, primarily due to the impact of acquisitions.
|
4.
|
Fleet productivity reflects the combined impact of changes in rental rates, time utilization and mix on owned equipment rental revenue. See the table below for more information.
|
5.
|
Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of acquired RSC, NES, Neff and BlueLine fleet that was sold.
|
•
|
Rental Revenue: Rental revenue was $7.964 billion, reflecting increases of 14.8% and 4.1% year-over-year on an as-reported and pro forma basis, respectively. The as-reported increase is primarily due to the impact of the BakerCorp and BlueLine acquisitions.
|
•
|
Fleet Productivity: On an as reported basis, fleet productivity decreased 2.2% year-over-year. On a pro forma basis, fleet productivity increased 0.6%, as the combined benefit of rental rates and mix was partially offset by lower time utilization.
|
•
|
Used Equipment: The company generated $831 million of proceeds from used equipment sales at a GAAP gross margin of 37.7% and an adjusted gross margin of 46.7%; this compares with $664 million at a GAAP gross margin of 41.9% and an adjusted gross margin of 51.8% for last year. The year-over-year decrease in adjusted gross margin was primarily due to changes in the mix of equipment sold and channel mix.
|
•
|
Profitability: Net income increased 7.1% year-over-year to $1.174 billion. Net interest expense increased $167 million year-over-year primarily due to the debt issued to fund the BakerCorp and BlueLine acquisitions and a loss of $61 million associated with the full redemptions of our 5 3/4 percent Senior Notes and 4 5/8 percent Senior Secured Notes, and the effective tax rate decreased 320 basis points year-over-year primarily due to federal tax credits and favorable changes in the state jurisdictional mix of income. Operating income increased 10.3% year-over-year to $2.152 billion. Adjusted EBITDA increased 12.7% year-over-year to $4.355 billion, while adjusted EBITDA margin decreased 140 basis points to 46.6%. The decline in adjusted EBITDA margin primarily reflects the acquisitions of BakerCorp and BlueLine. On a pro forma basis, year-over-year, net income excluding merger costs recognized by BakerCorp and BlueLine prior to acquisition increased 8.7%, adjusted EBITDA increased 4.4% and adjusted EBITDA margin decreased 30 basis points.
|
•
|
General rentals: Rental revenue for the company’s general rentals segment increased by 11.7% and 1.8% year-over-year on an actual and pro forma basis, respectively. Rental gross margin decreased by 250 basis points to 38.8%, due primarily to the impact of acquisitions, notably higher depreciation of rental equipment from the acquisition of BlueLine, and higher operating costs, primarily higher repair and maintenance expenses.
|
•
|
Specialty: Rental revenue for the company’s specialty segment, Trench, Power and Fluid Solutions, increased by 26.8% year-over-year, including an organic increase of 9.6%. Rental gross margin decreased by 280 basis points to 45.4%, primarily due to the impact of acquisitions.
|
•
|
Cash flow: Net cash from operating activities increased 6.0% to $3.024 billion and free cash flow6, including aggregated merger and restructuring payments, increased 23.2% to $1.566 billion. The increase in free cash flow was primarily due to higher net cash from operating activities and increased used equipment sales. Free cash flow included rental gross capital expenditures of $2.132 billion, which was flat year-over-year.
|
•
|
Capital Allocation: In June 2019, the company announced that it had lowered its targeted leverage range to 2.0x-3.0x, from 2.5x-3.5x. The net leverage ratio was 2.6x at December 31, 2019, compared to 3.1x at December 31, 2018. In 2019, the company repurchased $830 million of common stock under its $1.25 billion repurchase program, completing the program and reducing its diluted share count by 4.1%.
|
6.
|
Free cash flow is a non-GAAP measure. See the table below for amounts and a reconciliation to the most comparable GAAP measure.
|
|
2020 Outlook
|
|
2019 Actual
|
|
Total revenue
|
$9.4 billion to $9.8 billion
|
|
$9.351 billion
|
|
Adjusted EBITDA7
|
$4.35 billion to $4.55 billion
|
|
$4.355 billion
|
|
Net rental capital expenditures after gross purchases
|
$1.05 billion to $1.35 billion, after gross purchases of $1.9 billion to $2.2 billion
|
|
$1.301 billion net, $2.132 billion gross
|
|
Net cash provided by operating activities
|
$2.85 billion to $3.35 billion
|
|
$3.024 billion
|
|
Free cash flow (excluding merger and restructuring related payments, such payments were $26 million in 2019)
|
$1.6 billion to $1.8 billion
|
|
$1.592 billion
|
|
7.
|
Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Equipment rentals
|
$
|
2,062
|
|
|
$
|
1,989
|
|
|
$
|
7,964
|
|
|
$
|
6,940
|
|
Sales of rental equipment
|
244
|
|
|
186
|
|
|
831
|
|
|
664
|
|
||||
Sales of new equipment
|
79
|
|
|
68
|
|
|
268
|
|
|
208
|
|
||||
Contractor supplies sales
|
26
|
|
|
25
|
|
|
104
|
|
|
91
|
|
||||
Service and other revenues
|
45
|
|
|
38
|
|
|
184
|
|
|
144
|
|
||||
Total revenues
|
2,456
|
|
|
2,306
|
|
|
9,351
|
|
|
8,047
|
|
||||
Cost of revenues:
|
|
|
|
|
|
|
|
||||||||
Cost of equipment rentals, excluding depreciation
|
802
|
|
|
731
|
|
|
3,126
|
|
|
2,614
|
|
||||
Depreciation of rental equipment
|
420
|
|
|
375
|
|
|
1,631
|
|
|
1,363
|
|
||||
Cost of rental equipment sales
|
155
|
|
|
104
|
|
|
518
|
|
|
386
|
|
||||
Cost of new equipment sales
|
68
|
|
|
58
|
|
|
231
|
|
|
179
|
|
||||
Cost of contractor supplies sales
|
19
|
|
|
17
|
|
|
73
|
|
|
60
|
|
||||
Cost of service and other revenues
|
27
|
|
|
23
|
|
|
102
|
|
|
81
|
|
||||
Total cost of revenues
|
1,491
|
|
|
1,308
|
|
|
5,681
|
|
|
4,683
|
|
||||
Gross profit
|
965
|
|
|
998
|
|
|
3,670
|
|
|
3,364
|
|
||||
Selling, general and administrative expenses
|
268
|
|
|
302
|
|
|
1,092
|
|
|
1,038
|
|
||||
Merger related costs
|
—
|
|
|
22
|
|
|
1
|
|
|
36
|
|
||||
Restructuring charge
|
2
|
|
|
16
|
|
|
18
|
|
|
31
|
|
||||
Non-rental depreciation and amortization
|
96
|
|
|
95
|
|
|
407
|
|
|
308
|
|
||||
Operating income
|
599
|
|
|
563
|
|
|
2,152
|
|
|
1,951
|
|
||||
Interest expense, net
|
170
|
|
|
142
|
|
|
648
|
|
|
481
|
|
||||
Other income, net
|
(4
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
(6
|
)
|
||||
Income before provision for income taxes
|
433
|
|
|
425
|
|
|
1,514
|
|
|
1,476
|
|
||||
Provision for income taxes
|
95
|
|
|
115
|
|
|
340
|
|
|
380
|
|
||||
Net income
|
$
|
338
|
|
|
$
|
310
|
|
|
$
|
1,174
|
|
|
$
|
1,096
|
|
Diluted earnings per share
|
$
|
4.49
|
|
|
$
|
3.80
|
|
|
$
|
15.11
|
|
|
$
|
13.12
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
52
|
|
|
$
|
43
|
|
Accounts receivable, net
|
1,530
|
|
|
1,545
|
|
||
Inventory
|
120
|
|
|
109
|
|
||
Prepaid expenses and other assets
|
140
|
|
|
64
|
|
||
Total current assets
|
1,842
|
|
|
1,761
|
|
||
Rental equipment, net
|
9,787
|
|
|
9,600
|
|
||
Property and equipment, net
|
604
|
|
|
614
|
|
||
Goodwill
|
5,154
|
|
|
5,058
|
|
||
Other intangible assets, net
|
895
|
|
|
1,084
|
|
||
Operating lease right-of-use assets (1)
|
669
|
|
|
—
|
|
||
Other long-term assets
|
19
|
|
|
16
|
|
||
Total assets
|
$
|
18,970
|
|
|
$
|
18,133
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Short-term debt and current maturities of long-term debt
|
$
|
997
|
|
|
$
|
903
|
|
Accounts payable
|
454
|
|
|
536
|
|
||
Accrued expenses and other liabilities (1)
|
747
|
|
|
677
|
|
||
Total current liabilities
|
2,198
|
|
|
2,116
|
|
||
Long-term debt
|
10,431
|
|
|
10,844
|
|
||
Deferred taxes
|
1,887
|
|
|
1,687
|
|
||
Operating lease liabilities (1)
|
533
|
|
|
—
|
|
||
Other long-term liabilities
|
91
|
|
|
83
|
|
||
Total liabilities
|
15,140
|
|
|
14,730
|
|
||
Common stock
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
2,440
|
|
|
2,408
|
|
||
Retained earnings
|
5,275
|
|
|
4,101
|
|
||
Treasury stock
|
(3,700
|
)
|
|
(2,870
|
)
|
||
Accumulated other comprehensive loss
|
(186
|
)
|
|
(237
|
)
|
||
Total stockholders’ equity
|
3,830
|
|
|
3,403
|
|
||
Total liabilities and stockholders’ equity
|
$
|
18,970
|
|
|
$
|
18,133
|
|
(1)
|
In 2019, we adopted an updated lease accounting standard that resulted in the recognition of operating lease right-of-use assets and lease liabilities. Accrued expenses and other liabilities as of December 31, 2019 includes $178 million of current operating lease liabilities. We adopted this standard using a transition method that does not require application to periods prior to adoption.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
338
|
|
|
$
|
310
|
|
|
$
|
1,174
|
|
|
$
|
1,096
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
516
|
|
|
470
|
|
|
2,038
|
|
|
1,671
|
|
||||
Amortization of deferred financing costs and original issue discounts
|
4
|
|
|
3
|
|
|
15
|
|
|
12
|
|
||||
Gain on sales of rental equipment
|
(89
|
)
|
|
(82
|
)
|
|
(313
|
)
|
|
(278
|
)
|
||||
Gain on sales of non-rental equipment
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Gain on insurance proceeds from damaged equipment
|
(6
|
)
|
|
(4
|
)
|
|
(24
|
)
|
|
(22
|
)
|
||||
Stock compensation expense, net
|
16
|
|
|
29
|
|
|
61
|
|
|
102
|
|
||||
Merger related costs
|
—
|
|
|
22
|
|
|
1
|
|
|
36
|
|
||||
Restructuring charge
|
2
|
|
|
16
|
|
|
18
|
|
|
31
|
|
||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
29
|
|
|
—
|
|
|
61
|
|
|
—
|
|
||||
Increase in deferred taxes
|
87
|
|
|
67
|
|
|
204
|
|
|
257
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Decrease (increase) in accounts receivable
|
69
|
|
|
16
|
|
|
39
|
|
|
(115
|
)
|
||||
Decrease (increase) in inventory
|
9
|
|
|
3
|
|
|
(8
|
)
|
|
(20
|
)
|
||||
(Increase) decrease in prepaid expenses and other assets
|
(38
|
)
|
|
44
|
|
|
(59
|
)
|
|
75
|
|
||||
(Decrease) increase in accounts payable
|
(387
|
)
|
|
(189
|
)
|
|
(86
|
)
|
|
49
|
|
||||
(Decrease) increase in accrued expenses and other liabilities
|
(105
|
)
|
|
27
|
|
|
(91
|
)
|
|
(35
|
)
|
||||
Net cash provided by operating activities
|
442
|
|
|
730
|
|
|
3,024
|
|
|
2,853
|
|
||||
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
||||||||
Purchases of rental equipment
|
(158
|
)
|
|
(144
|
)
|
|
(2,132
|
)
|
|
(2,106
|
)
|
||||
Purchases of non-rental equipment
|
(61
|
)
|
|
(51
|
)
|
|
(218
|
)
|
|
(185
|
)
|
||||
Proceeds from sales of rental equipment
|
244
|
|
|
186
|
|
|
831
|
|
|
664
|
|
||||
Proceeds from sales of non-rental equipment
|
11
|
|
|
10
|
|
|
37
|
|
|
23
|
|
||||
Insurance proceeds from damaged equipment
|
6
|
|
|
4
|
|
|
24
|
|
|
22
|
|
||||
Purchases of other companies, net of cash acquired
|
(2
|
)
|
|
(2,161
|
)
|
|
(249
|
)
|
|
(2,966
|
)
|
||||
Purchases of investments
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Net cash provided by (used in) investing activities
|
39
|
|
|
(2,158
|
)
|
|
(1,710
|
)
|
|
(4,551
|
)
|
||||
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from debt
|
3,135
|
|
|
5,116
|
|
|
9,260
|
|
|
12,178
|
|
||||
Payments of debt
|
(3,409
|
)
|
|
(3,478
|
)
|
|
(9,678
|
)
|
|
(9,942
|
)
|
||||
Payments of financing costs
|
(10
|
)
|
|
(23
|
)
|
|
(28
|
)
|
|
(24
|
)
|
||||
Proceeds from the exercise of common stock options
|
1
|
|
|
—
|
|
|
11
|
|
|
2
|
|
||||
Common stock repurchased (1)
|
(206
|
)
|
|
(211
|
)
|
|
(870
|
)
|
|
(817
|
)
|
||||
Net cash (used in) provided by financing activities
|
(489
|
)
|
|
1,404
|
|
|
(1,305
|
)
|
|
1,397
|
|
||||
Effect of foreign exchange rates
|
—
|
|
|
2
|
|
|
—
|
|
|
(8
|
)
|
||||
Net (decrease) increase in cash and cash equivalents
|
(8
|
)
|
|
(22
|
)
|
|
9
|
|
|
(309
|
)
|
||||
Cash and cash equivalents at beginning of period
|
60
|
|
|
65
|
|
|
43
|
|
|
352
|
|
||||
Cash and cash equivalents at end of period
|
$
|
52
|
|
|
$
|
43
|
|
|
$
|
52
|
|
|
$
|
43
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
||||||||
Cash paid for income taxes, net
|
$
|
142
|
|
|
$
|
21
|
|
|
$
|
238
|
|
|
$
|
71
|
|
Cash paid for interest
|
101
|
|
|
76
|
|
|
581
|
|
|
455
|
|
(1)
|
In 2019, we completed our $1.25 billion share repurchase program. The common stock repurchases include i) shares repurchased pursuant to our share repurchase programs and ii) shares withheld to satisfy tax withholding obligations upon the vesting of restricted stock unit awards. As discussed above, our Board of Directors authorized a new $500 million
|
|
Year-over-year change in average OEC
|
|
Assumed year-over-year inflation impact (1)
|
|
Fleet productivity (2)
|
|
Contribution from ancillary and re-rent revenue (3)
|
|
Total change in rental revenue
|
Three Months Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
Actual
|
7.6%
|
|
(1.5)%
|
|
(2.4)%
|
|
—%
|
|
3.7%
|
Pro forma (4)
|
4.0%
|
|
(1.5)%
|
|
(1.8)%
|
|
0.1%
|
|
0.8%
|
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
Actual
|
17.7%
|
|
(1.5)%
|
|
(2.2)%
|
|
0.8%
|
|
14.8%
|
Pro forma (4)
|
4.9%
|
|
(1.5)%
|
|
0.6%
|
|
0.1%
|
|
4.1%
|
(1)
|
Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
|
(2)
|
Reflects the combined impact of changes in rental rates, time utilization and mix on owned equipment rental revenue. Changes in customers, fleet, geographies and segments all contribute to changes in mix.
|
(3)
|
Reflects the combined impact of changes in other types of equipment rental revenue: ancillary and re-rent (excludes owned equipment rental revenue).
|
(4)
|
Includes the standalone, pre-acquisition results of BakerCorp and BlueLine.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||||||
|
2019
|
|
|
2018
|
|
|
Change
|
|
2019
|
|
|
2018
|
|
|
Change
|
||||
General Rentals
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reportable segment equipment rentals revenue
|
$
|
1,610
|
|
|
$
|
1,573
|
|
|
2.4%
|
|
$
|
6,202
|
|
|
$
|
5,550
|
|
|
11.7%
|
Reportable segment equipment rentals gross profit
|
642
|
|
|
695
|
|
|
(7.6)%
|
|
2,407
|
|
|
2,293
|
|
|
5.0%
|
||||
Reportable segment equipment rentals gross margin
|
39.9
|
%
|
|
44.2
|
%
|
|
(430) bps
|
|
38.8
|
%
|
|
41.3
|
%
|
|
(250) bps
|
||||
Trench, Power and Fluid Solutions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reportable segment equipment rentals revenue
|
$
|
452
|
|
|
$
|
416
|
|
|
8.7%
|
|
$
|
1,762
|
|
|
$
|
1,390
|
|
|
26.8%
|
Reportable segment equipment rentals gross profit
|
198
|
|
|
188
|
|
|
5.3%
|
|
800
|
|
|
670
|
|
|
19.4%
|
||||
Reportable segment equipment rentals gross margin
|
43.8
|
%
|
|
45.2
|
%
|
|
(140) bps
|
|
45.4
|
%
|
|
48.2
|
%
|
|
(280) bps
|
||||
Total United Rentals
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total equipment rentals revenue
|
$
|
2,062
|
|
|
$
|
1,989
|
|
|
3.7%
|
|
$
|
7,964
|
|
|
$
|
6,940
|
|
|
14.8%
|
Total equipment rentals gross profit
|
840
|
|
|
883
|
|
|
(4.9)%
|
|
3,207
|
|
|
2,963
|
|
|
8.2%
|
||||
Total equipment rentals gross margin
|
40.7
|
%
|
|
44.4
|
%
|
|
(370) bps
|
|
40.3
|
%
|
|
42.7
|
%
|
|
(240) bps
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders
|
$
|
338
|
|
|
$
|
310
|
|
|
$
|
1,174
|
|
|
$
|
1,096
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share—weighted-average common shares
|
75.1
|
|
|
80.6
|
|
|
77.3
|
|
|
82.7
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Employee stock options
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
||||
Restricted stock units
|
0.3
|
|
|
0.5
|
|
|
0.3
|
|
|
0.4
|
|
||||
Denominator for diluted earnings per share—adjusted weighted-average common shares
|
75.4
|
|
|
81.5
|
|
|
77.7
|
|
|
83.5
|
|
||||
Diluted earnings per share
|
$
|
4.49
|
|
|
$
|
3.80
|
|
|
$
|
15.11
|
|
|
$
|
13.12
|
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Earnings per share - GAAP, as reported
|
$
|
4.49
|
|
|
$
|
3.80
|
|
|
$
|
15.11
|
|
|
$
|
13.12
|
|
After-tax impact of:
|
|
|
|
|
|
|
|
||||||||
Merger related costs (2)
|
—
|
|
|
0.21
|
|
|
0.01
|
|
|
0.32
|
|
||||
Merger related intangible asset amortization (3)
|
0.60
|
|
|
0.58
|
|
|
2.48
|
|
|
1.76
|
|
||||
Impact on depreciation related to acquired fleet and property and equipment (4)
|
0.05
|
|
|
—
|
|
|
0.39
|
|
|
0.19
|
|
||||
Impact of the fair value mark-up of acquired fleet (5)
|
0.16
|
|
|
0.11
|
|
|
0.72
|
|
|
0.59
|
|
||||
Restructuring charge (6)
|
0.03
|
|
|
0.15
|
|
|
0.18
|
|
|
0.28
|
|
||||
Asset impairment charge (7)
|
(0.01
|
)
|
|
—
|
|
|
0.05
|
|
|
—
|
|
||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
0.28
|
|
|
—
|
|
|
0.58
|
|
|
—
|
|
||||
Earnings per share - adjusted
|
$
|
5.60
|
|
|
$
|
4.85
|
|
|
$
|
19.52
|
|
|
$
|
16.26
|
|
Tax rate applied to above adjustments (1)
|
25.1
|
%
|
|
25.7
|
%
|
|
25.3
|
%
|
|
25.5
|
%
|
(1)
|
The tax rates applied to the adjustments reflect the statutory rates in the applicable entities.
|
(2)
|
Reflects transaction costs associated with the 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 BlueLine had annual revenues of approximately $786 million.
|
(3)
|
Reflects the amortization of the intangible assets acquired in the RSC, National Pump, NES, Neff, BakerCorp and BlueLine acquisitions.
|
(4)
|
Reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff, BakerCorp and BlueLine 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 BlueLine 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 four restructuring programs. We have cumulatively incurred total restructuring charges of $333 million under our restructuring programs.
|
(7)
|
Reflects write-offs of leasehold improvements and other fixed assets.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
338
|
|
|
$
|
310
|
|
|
$
|
1,174
|
|
|
$
|
1,096
|
|
Provision for income taxes
|
95
|
|
|
115
|
|
|
340
|
|
|
380
|
|
||||
Interest expense, net
|
170
|
|
|
142
|
|
|
648
|
|
|
481
|
|
||||
Depreciation of rental equipment
|
420
|
|
|
375
|
|
|
1,631
|
|
|
1,363
|
|
||||
Non-rental depreciation and amortization
|
96
|
|
|
95
|
|
|
407
|
|
|
308
|
|
||||
EBITDA (A)
|
$
|
1,119
|
|
|
$
|
1,037
|
|
|
$
|
4,200
|
|
|
$
|
3,628
|
|
Merger related costs (1)
|
—
|
|
|
22
|
|
|
1
|
|
|
36
|
|
||||
Restructuring charge (2)
|
2
|
|
|
16
|
|
|
18
|
|
|
31
|
|
||||
Stock compensation expense, net (3)
|
16
|
|
|
29
|
|
|
61
|
|
|
102
|
|
||||
Impact of the fair value mark-up of acquired fleet (4)
|
17
|
|
|
13
|
|
|
75
|
|
|
66
|
|
||||
Adjusted EBITDA (B)
|
$
|
1,154
|
|
|
$
|
1,117
|
|
|
$
|
4,355
|
|
|
$
|
3,863
|
|
(1)
|
Reflects transaction costs associated with the 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 BlueLine had annual revenues of approximately $786 million.
|
(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 $333 million under our restructuring programs.
|
(3)
|
Represents non-cash, share-based payments associated with the granting of equity instruments.
|
(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.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net cash provided by operating activities
|
$
|
442
|
|
|
$
|
730
|
|
|
$
|
3,024
|
|
|
$
|
2,853
|
|
Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA:
|
|
|
|
|
|
|
|
||||||||
Amortization of deferred financing costs and original issue discounts
|
(4
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|
(12
|
)
|
||||
Gain on sales of rental equipment
|
89
|
|
|
82
|
|
|
313
|
|
|
278
|
|
||||
Gain on sales of non-rental equipment
|
3
|
|
|
2
|
|
|
6
|
|
|
6
|
|
||||
Gain on insurance proceeds from damaged equipment
|
6
|
|
|
4
|
|
|
24
|
|
|
22
|
|
||||
Merger related costs (1)
|
—
|
|
|
(22
|
)
|
|
(1
|
)
|
|
(36
|
)
|
||||
Restructuring charge (2)
|
(2
|
)
|
|
(16
|
)
|
|
(18
|
)
|
|
(31
|
)
|
||||
Stock compensation expense, net (3)
|
(16
|
)
|
|
(29
|
)
|
|
(61
|
)
|
|
(102
|
)
|
||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
(29
|
)
|
|
—
|
|
|
(61
|
)
|
|
—
|
|
||||
Changes in assets and liabilities
|
387
|
|
|
192
|
|
|
170
|
|
|
124
|
|
||||
Cash paid for interest
|
101
|
|
|
76
|
|
|
581
|
|
|
455
|
|
||||
Cash paid for income taxes, net
|
142
|
|
|
21
|
|
|
238
|
|
|
71
|
|
||||
EBITDA
|
$
|
1,119
|
|
|
$
|
1,037
|
|
|
$
|
4,200
|
|
|
$
|
3,628
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Merger related costs (1)
|
—
|
|
|
22
|
|
|
1
|
|
|
36
|
|
||||
Restructuring charge (2)
|
2
|
|
|
16
|
|
|
18
|
|
|
31
|
|
||||
Stock compensation expense, net (3)
|
16
|
|
|
29
|
|
|
61
|
|
|
102
|
|
||||
Impact of the fair value mark-up of acquired fleet (4)
|
17
|
|
|
13
|
|
|
75
|
|
|
66
|
|
||||
Adjusted EBITDA
|
$
|
1,154
|
|
|
$
|
1,117
|
|
|
$
|
4,355
|
|
|
$
|
3,863
|
|
(1)
|
Reflects transaction costs associated with the 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 BlueLine had annual revenues of approximately $786 million.
|
(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 $333 million under our restructuring programs.
|
(3)
|
Represents non-cash, share-based payments associated with the granting of equity instruments.
|
(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.
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
As-reported
|
|
As-reported
|
|
BlueLine
|
|
Pro forma
|
Net income (loss)
|
$338
|
|
$310
|
|
$(139)
|
|
$171
|
Provision for income taxes
|
95
|
|
115
|
|
—
|
|
115
|
Interest expense, net
|
170
|
|
142
|
|
11
|
|
153
|
Depreciation of rental equipment
|
420
|
|
375
|
|
17
|
|
392
|
Non-rental depreciation and amortization
|
96
|
|
95
|
|
—
|
|
95
|
EBITDA (A)
|
$1,119
|
|
$1,037
|
|
$(111)
|
|
$926
|
Merger related costs (1)
|
—
|
|
22
|
|
138
|
|
160
|
Restructuring charge (2)
|
2
|
|
16
|
|
—
|
|
16
|
Stock compensation expense, net (3)
|
16
|
|
29
|
|
—
|
|
29
|
Impact of the fair value mark-up of acquired fleet (4)
|
17
|
|
13
|
|
—
|
|
13
|
Other (5)
|
—
|
|
—
|
|
1
|
|
1
|
Adjusted EBITDA (B)
|
$1,154
|
|
$1,117
|
|
$28
|
|
$1,145
|
|
Year Ended
|
|
Year Ended
|
||||||
|
December 31,
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
As-reported
|
|
As-reported
|
|
BakerCorp
|
|
BlueLine
|
|
Pro forma
|
Net income (loss)
|
$1,174
|
|
$1,096
|
|
$(46)
|
|
$(169)
|
|
$881
|
Provision (benefit) for income taxes
|
340
|
|
380
|
|
(38)
|
|
—
|
|
342
|
Interest expense, net
|
648
|
|
481
|
|
30
|
|
106
|
|
617
|
Depreciation of rental equipment
|
1,631
|
|
1,363
|
|
21
|
|
167
|
|
1,551
|
Non-rental depreciation and amortization
|
407
|
|
308
|
|
14
|
|
6
|
|
328
|
EBITDA (A)
|
$4,200
|
|
$3,628
|
|
$(19)
|
|
$110
|
|
$3,719
|
Merger related costs (1)
|
1
|
|
36
|
|
57
|
|
142
|
|
235
|
Restructuring charge (2)
|
18
|
|
31
|
|
—
|
|
—
|
|
31
|
Stock compensation expense, net (3)
|
61
|
|
102
|
|
—
|
|
—
|
|
102
|
Impact of the fair value mark-up of acquired fleet (4)
|
75
|
|
66
|
|
—
|
|
—
|
|
66
|
Other (5)
|
—
|
|
—
|
|
7
|
|
12
|
|
19
|
Adjusted EBITDA (B)
|
$4,355
|
|
$3,863
|
|
$45
|
|
$264
|
|
$4,172
|
(1)
|
Reflects transaction costs associated with the 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 BlueLine had annual revenues of approximately $786 million. The BlueLine merger costs reflect merger related costs recognized by BlueLine prior to the acquisition.
|
(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 $333 million under our restructuring programs.
|
(3)
|
Represents non-cash, share-based payments associated with the granting of equity instruments.
|
(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.
|
(5)
|
Includes various adjustments reflected in historic adjusted EBITDA for BakerCorp and BlueLine.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net cash provided by operating activities
|
$
|
442
|
|
|
$
|
730
|
|
|
$
|
3,024
|
|
|
$
|
2,853
|
|
Purchases of rental equipment
|
(158
|
)
|
|
(144
|
)
|
|
(2,132
|
)
|
|
(2,106
|
)
|
||||
Purchases of non-rental equipment
|
(61
|
)
|
|
(51
|
)
|
|
(218
|
)
|
|
(185
|
)
|
||||
Proceeds from sales of rental equipment
|
244
|
|
|
186
|
|
|
831
|
|
|
664
|
|
||||
Proceeds from sales of non-rental equipment
|
11
|
|
|
10
|
|
|
37
|
|
|
23
|
|
||||
Insurance proceeds from damaged equipment
|
6
|
|
|
4
|
|
|
24
|
|
|
22
|
|
||||
Free cash flow (1)
|
$
|
484
|
|
|
$
|
735
|
|
|
$
|
1,566
|
|
|
$
|
1,271
|
|
(1)
|
Free cash flow included aggregate merger and restructuring related payments of $4 million and $31 million for the three months ended December 31, 2019 and 2018, respectively, and $26 million and $63 million for the years ended December 31, 2019 and 2018, respectively.
|
Net cash provided by operating activities
|
$2,850- $3,350
|
|
Purchases of rental equipment
|
$(1,900)-$(2,200)
|
|
Proceeds from sales of rental equipment
|
$800-$900
|
|
Purchases of non-rental equipment, net of proceeds from sales
|
$(150)-$(250)
|
|
Free cash flow (excluding the impact of merger and restructuring related payments)
|
$1,600- $1,800
|
|