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Actionable news in URI: UNITED RENTALS Inc,

United: 100 First Stamford Place

The following excerpt is from the company's SEC filing.

Suite 700

Stamford, CT 06902

Telephone: 203 622 3131

Fax: 203 622 6080

unitedrentals.com

United Rentals Announces First Quarter 2016 Results

Updates Full Year Outlook

STAMFORD, Conn.

April 20, 2016

– United Rentals, Inc. (NYSE: URI) today announced financial results for the

quarter 2016. Total revenue was $

1.310 billion

and rental revenue was $

1.117 billion

quarter, compared with $

1.315 billion

and $

1.125 billion

, respectively, for the same period last year. On a GAAP basis , the company reported

quarter net income of $

million, or $

per diluted share, compared with $

per diluted share, for the same period last year

Adjusted EPS

for the quarter was

per diluted share for the same period last year. Adjusted EBITDA

million and adjusted EBITDA margin was

%, reflecting decreases of $

basis points, respectively, from the same period last year.

First Quarter 2016 Highlights

Within rental revenue

, owned equipment rental revenue decreased

year-over-year, reflecting a

drop in rental rates, offset by an increase of

in the volume of equipment on rent, which included the adverse impact from currency.

Combined rental revenue from the company’s Trench Safety and Power & HVAC businesses increased by 12% year-over-year, primarily on a same store basis.

Time utilization decreased

basis points year-over-year to

. In the month of March, time utilization increased 100 basis points year-over-year.

The company generated $

million of proceeds from used equipment sales at an adjusted gross margin of

_______________

GAAP net income and diluted earnings per share for the first quarter 2015 include an after-tax merger benefit of $17 million, or $0.17 per diluted share, associated with the National Pump acquisition.

Adjusted EPS (earnings per share) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) are non-GAAP measures that exclude the impact of the items noted in the tables below. See the tables below for amounts.

Total rental revenue decreased

including the adverse impact from currency. Excluding this impact, rental revenue would have increased

Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of acquired RSC fleet that was sold.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "During the first quarter we saw broad-based, improving demand in many of our core markets, which was most apparent in accelerating volume. On the other hand, we continue to face significant headwinds from oil and gas and from our Canadian business, pressuring rental rates. We are encouraged, however, by industry data that shows that fleet supply-demand dynamics are moving towards equilibrium in the U.S."

Kneeland continued, "Based on what we see and hear in the marketplace, we continue to expect our business to improve both seasonally and cyclically, with our updated guidance reflecting the net impact of weaker rental rates due primarily to what we believe are temporary factors. Our business is larger, more diverse and more operationally effective than it has ever been, and we have the tools to maintain our industry leadership and financial strength, including significant flexibility to manage both our costs and capital plans in any environment. We remain confident in our ability to generate at least $900 million of free cash flow and then to redeploy this capital in an optimal manner."

2016 Outlook

The company has updated its full year outlook as follows:

Prior Outlook

Current Outlook

$5.65 billion to $5.95 billion

$5.6 billion to $5.8 billion

$2.7 billion to $2.9 billion

$2.65 billion to $2.75 billion

Decrease in rental rates (year-over-year)

(1%) to (2%)

(3%) to (4%)

Approximately 68% (+70 bps year-over-year)

Approximately 68.3% (+100 bps year-over-year)

Net rental capital expenditures after gross purchases

Approximately $700 million, after gross purchases of approximately $1.2 billion

Free cash flow

$900 million to $1.0 billion

Free Cash Flow and Fleet Size

For the first

months of 2016, free cash flow was $

million, after total rental and non-rental gross capital expenditures of $

million. By comparison, free cash flow for the first

months of 2015 was $

million after total rental and non-rental gross capital expenditures of $

The size of the rental fleet was $

billion of original equipment cost at

March 31, 2016

, compared with $8.73 billion at December 31, 2015. The age of the rental fleet was

months on an OEC-weighted basis at

Return on Invested Capital (ROIC)

Return on invested capital was

for the 12 months ended

a decrease

basis points from the 12 months ended

March 31, 2015

. The company’s ROIC metric uses after-tax operating income for the trailing 12 months divided by average stockholders’ equity, debt and deferred taxes, net of average cash. To mitigate the volatility related to fluctuations in the company’s tax rate from period to period, the federal statutory tax rate of 35% is used to calculate after-tax operating income.

Free cash flow is a non-GAAP measure as defined in the table below.

When adjusting the denominator of the ROIC calculation to also exclude average goodwill, ROIC was

Conference Call

United Rentals will hold a conference call tomorrow, Thursday, April 21, 2016, at 11:00 a.m. Eastern Time. The conference call number is 866-764-6147 (international: 973-935-8698). The conference call will also be available live by audio webcast at unitedrentals.com, where it will be archived until the next earnings call. The replay number for the call is 703-925-2533, passcode is 1671263.

Non-GAAP Measures

Free cash flow, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, and adjusted earnings per share (adjusted EPS) are non-GAAP financial measures as defined under the rules of the SEC. Free cash flow represents net cash provided by operating activities, less purchases of rental and non-rental equipment plus proceeds from sales of rental and non-rental equipment and excess tax benefits from share-based payment arrangements. 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 RSC fleet. Adjusted EPS represents EPS plus the sum of the merger related costs, restructuring charge, the impact on interest expense related to the fair value adjustment of acquired RSC indebtedness, the impact on depreciation related to acquired RSC fleet and property and equipment, the impact of the fair value mark-up of acquired RSC fleet, merger related intangible asset amortization, asset impairment charge and the loss on repurchase/redemption of debt securities and amendment of ABL facility. The company believes that: (i) free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements; (ii) EBITDA and adjusted EBITDA provide useful information about operating performance and period-over-period growth; and (iii) adjusted EPS provides useful information concerning future profitability. However, none of these measures should be considered as alternatives to net income, cash flows from operating activities or earnings per share under GAAP as indicators of operating performance or liquidity. Information reconciling forward-looking free cash flow and adjusted EBITDA to GAAP financial measures is unavailable to the company without unreasonable effort.

About United Rentals

United Rentals, Inc. is the largest equipment rental company in the world. The company has an integrated network of

rental locations in 49 states and 10 Canadian provinces. The company’s approximately

12,500

employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers approximately

classes of equipment for rent with a total original cost of $

billion. United Rentals is a member of the Standard & Poor’s 500 Index, the Barron’s 400 Index and the Russell 3000 Index® and is headquartered in Stamford, Conn. Additional information about United Rentals is available at unitedrentals.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section

21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA.

These statements can generally be identified by the use of forward-looking terminology such as

believe,

expect,

should,

on-track,

project,

forecast,

intend

anticipate,

or the negative thereof or comparable terminology, or by discussions of vision, strategy or outlook. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Factors that could cause actual results to differ materially from those projected include, but are not limited to, the following: (1) the challenges associated with past or future acquisitions, such as undiscovered liabilities, costs, integration issues and/or the inability to achieve the cost and revenue synergies expected; (2) a slowdown in North American construction and industrial activities, which occurred during the economic downturn and significantly affected our revenues and profitability, could reduce demand for equipment and prices that we can charge; (3) our significant indebtedness, which requires us to use a substantial portion of our cash flow for debt service and can constrain our flexibility in responding to unanticipated or adverse business conditions; (4) the inability to refinance our indebtedness at terms that are favorable to us, or at all; (5) the incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness; (6) noncompliance with covenants in our debt agreements, which could result in termination of our credit facilities and acceleration of outstanding borrowings; (7) restrictive covenants and amount of borrowings permitted under our debt agreements, which could limit our financial and operational flexibility; (8) an overcapacity of fleet in the equipment rental industry; (9) a decrease in levels of infrastructure spending, including lower than expected government funding for construction projects; (10) fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated; (11) our rates and time utilization being less than anticipated; (12) our inability to manage credit risk adequately or to collect on contracts with customers; (13) our inability to access the capital that our business or growth plans may require; (14) the incurrence of impairment charges; (15) trends in oil and natural gas could adversely affect demand for our services and products; (16) our dependence on distributions from subsidiaries as a result of our holding company structure and the fact that such distributions could be limited by contractual or legal restrictions; (17) an increase in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves; (18) the incurrence of additional costs and expenses (including indemnification obligations) in connection with litigation, regulatory or investigatory matters; (19) the outcome or other potential consequences of litigation and other claims and regulatory matters relating to our business, including certain claims that our insurance may not cover; (20) the effect that certain provisions in our charter and certain debt agreements and our significant indebtedness may have of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; (21) management turnover and inability to attract and retain key personnel; (22) our costs being more than anticipated and/or the inability to realize expected savings in the amounts or time frames planned; (23) our dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms; (24) our inability to sell our new or used fleet in the amounts, or at the prices, we expect; (25) competition from existing and new competitors; (26) security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; (27) the costs of complying with environmental, safety and foreign laws and regulations, as well as other risks associated with non-U.S. operations, including currency exchange risk; (28) labor difficulties and labor-based legislation affecting our labor relations and operations generally; and (29) increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment. For a more complete description of these and other possible risks and uncertainties, please refer to our Annual Report on Form 10-K for the year ended December 31, 2015, as well as to our subsequent filings with the SEC. The forward-looking statements contained herein speak only as of the date hereof, and we make no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations.

Contact:

Fred Bratman

(203) 618-7318

Cell: (917) 847-4507

fbratman@ur.com

UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In millions, except per share amounts)

Three Months Ended

Revenues:

Equipment rentals

Sales of rental equipment

Sales of new equipment

Contractor supplies sales

Service and other revenues

Total revenues

Cost of revenues:

Cost of equipment rentals, excluding depreciation

Depreciation of rental equipment

Cost of rental equipment sales

Cost of new equipment sales

Cost of contractor supplies sales

Cost of service and other revenues

Total cost of revenues

Gross profit

Selling, general and administrative expenses

Merger related costs

Restructuring charge

Non-rental depreciation and amortization

Operating income

Interest expense, net

Other income, net

Income before provision for income taxes

Provision for income taxes

Net income

Diluted earnings per share

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions)

ASSETS

Cash and cash equivalents

Accounts receivable, net

Inventory

Prepaid expenses and other assets

Total current assets

Rental equipment, net

Property and equipment, net

Goodwill

Other intangible assets, net

Other long-term assets

Total assets

11,784

12,083

LIABILITIES AND STOCKHOLDERS’ EQUITY

Short-term debt and current maturities of long-term debt

Accounts payable

Accrued expenses and other liabilities

Total current liabilities

Long-term debt

Deferred taxes

Other long-term liabilities

Total liabilities

10,283

10,607

Common stock

Additional paid-in capital

Retained earnings

Treasury stock

(1,714

(1,560

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders’ equity

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Cash Flows From Operating Activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Amortization of deferred financing costs and original issue discounts

Gain on sales of rental equipment

Gain on sales of non-rental equipment

Stock compensation expense, net

Loss on repurchase/redemption of debt securities and amendment of ABL facility

Excess tax benefits from share-based payment arrangements

Increase in deferred taxes

Changes in operating assets and liabilities:

Decrease in accounts receivable

Increase in inventory

Decrease in prepaid expenses and other assets

Increase in accounts payable

Increase (decrease) in accrued expenses and other liabilities

Net cash provided by operating activities

Cash Flows From Investing Activities:

Purchases of rental equipment

Purchases of non-rental equipment

Proceeds from sales of rental equipment

Proceeds from sales of non-rental equipment

Purchases of other companies, net of cash acquired

Net cash used in investing activities

Cash Flows From Financing Activities:

Proceeds from debt

Payments of debt

(1,337

(2,704

Payments of financing costs

Common stock repurchased

Net cash used in financing activities

Effect of foreign exchange rates

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Cash received for income taxes, net

Cash paid for interest

SEGMENT PERFORMANCE

($ in millions)

General Rentals

Reportable segment equipment rentals revenue

(2.2)%

Reportable segment equipment rentals gross profit

(6.8)%

Reportable segment equipment rentals gross margin

(180) bps

Trench, Power and Pump

(30) bps

Total United Rentals

Total equipment rentals revenue

$1,117

$1,125

(0.7)%

Total equipment rentals gross profit

(4.7)%

Total equipment rentals gross margin

(160) bps

DILUTED EARNINGS PER SHARE CALCULATION

(In millions, except per share data)

Numerator:

Net income available to common stockholders

Denominator:

Denominator for basic earnings per share—weighted-average common shares

Effect of dilutive securities:

Employee stock options

4 percent Convertible Senior Notes

Restricted stock units

Denominator for diluted earnings per share—adjusted weighted-average common shares

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 RSC fleet and property and equipment, impact of the fair value mark-up of acquired RSC fleet, impact on interest expense related to fair value adjustment of acquired RSC indebtedness, 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.

Earnings per share - GAAP, as reported

After-tax impact of:

Merger related costs (1)

Merger related intangible asset amortization (2)

Impact on depreciation related to acquired RSC fleet and property and equipment (3)

Impact of the fair value mark-up of acquired RSC fleet (4)

Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (5)

Restructuring charge (6)

Asset impairment charge (7)

Earnings per share - adjusted

Reflects transaction costs associated with the April 2014 National Pump acquisition. The income for the

reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price.

Reflects the amortization of the intangible assets acquired in the RSC and National Pump acquisitions.

Reflects the impact of extending the useful lives of equipment acquired in the RSC acquisition, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.

Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC acquisition and subsequently sold.

Reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition.

Reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program.

Reflects write-offs of fixed assets in connection with our restructuring programs.

EBITDA AND ADJUSTED EBITDA GAAP RECONCILIATION

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 RSC fleet. These items are excluded from adjusted EBITDA internally when evaluating our operating performance 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. 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. However, EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity. The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA.

EBITDA (A)

Restructuring charge (2)

Stock compensation expense, net (3)

Adjusted EBITDA (B)

A) Our EBITDA margin was

and 2015, respectively.

B) Our adjusted EBITDA margin was

Represents non-cash, share-based payments associated with the granting of equity instruments.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES

TO EBITDA AND ADJUSTED EBITDA

Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA:

Changes in assets and liabilities

Add back:

UNITED RENTALS, INC.

FREE CASH FLOW GAAP RECONCILIATION

We define free cash flow as (i) net cash provided by operating activities less (ii) purchases of rental and non-rental equipment plus (iii) proceeds from sales of rental and non-rental equipment and excess tax benefits from share-based payment arrangements. Management believes that free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements. However, free cash flow is not a measure of financial performance or liquidity under GAAP. Accordingly, free cash flow should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. The table below provides a reconciliation between net cash provided by operating activities and free cash flow.

Excess tax benefits from share-based payment arrangements (1)

The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes, and are reported as financing cash flows. We added the excess tax benefits back to our calculation of free cash flow to generally classify cash flows from income taxes as operating cash flows. However, these excess tax benefits did not impact free cash flow for the

, as they do not result in increased cash flows until the associated income taxes are settled.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Quarterly report [Sections 13 or 15(d)] - April 20, 2016
United Rentals director just picked up 230 shares - April 4, 2016