Maintenance, Repair & OperationsNews and Events

United Rentals Announces Second Quarter 2021 Results

STAMFORD, Conn.–United Rentals, Inc. (NYSE: URI) today announced financial results for the second quarter of 2021 and raised its full-year 2021 guidance.

Second Quarter 2021 Highlights

  • Total revenue of $2.287 billion, including rental revenue1 of $1.951 billion.
  • Fleet productivity2 increased 17.8% year-over-year; fleet productivity improved by over 1,800 basis points sequentially, driven primarily by better fleet absorption.
  • Net income of $293 million, implying a net income margin3 of 12.8%. GAAP diluted earnings per share of $4.02, and adjusted EPS3 of $4.66, including approximately $0.13 of one-time costs related to acquisitions.
  • Adjusted EBITDA3 of $999 million, implying an adjusted EBITDA marginof 43.7%, which includes approximately $13 million of one-time costs related to recent acquisition activity.
  • $1.934 billion of net cash from operating activities year-to-date; free cash flow4 of $1.162 billion, including gross rental capital spending of $1.208 billion.
  • Net leverage ratio of 2.5x, with total liquidity5 of $2.826 billion, at June 30, 2021.

CEO Comment
Matthew Flannery, chief executive officer of United Rentals, said, “We were pleased with our second quarter results, which were in line with our expectations and reflected a continued recovery across our construction and industrial markets. I continue to be proud of the job our team does every day to safely support our customers as their activity levels rebound.”

Flannery continued, “Looking forward, we remain encouraged by the gains we’ve seen in end-market indicators, including our customers’ sentiment and project visibility. We are raising our guidance to reflect the expected contribution from our recently completed acquisitions, as well as accelerated momentum in our underlying business. Combined, we believe this positions us well to deliver strong growth and returns in the second half of the year.”


1.Rental revenue includes owned equipment rental revenue, re-rent revenue and ancillary revenue.
2.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.
3.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 reconciliations to the most comparable GAAP measures. Net income margin and adjusted EBITDA margin represent net income or adjusted EBITDA divided by total revenue.
4.Free cash flow is a non-GAAP measure. See the table below for a reconciliation to the most comparable GAAP measure.
5.Reflects cash and cash equivalents plus availability under the asset-based revolving credit facility (“ABL facility”) and the accounts receivable securitization facility.

Updated 2021 Outlook
The company has updated its 2021 outlook as shown below, in large part to reflect the expected contribution from the May 2021 acquisition of General Finance Corporation (“General Finance”).

 Prior Outlook Current Outlook
Total revenue$9.05 billion to $9.45 billion $9.45 billion to $9.75 billion
Adjusted EBITDA6$4.1 billion to $4.3 billion $4.225 billion to $4.375 billion
Net rental capital expenditures after gross purchases$1.25 billion to $1.45 billion, after gross purchases of $2.2 billion to $2.4 billion $1.5 billion to $1.7 billion, after gross purchases of $2.5 billion to $2.7 billion
Net cash provided by operating activities$3.1 billion to $3.5 billion $3.25 billion to $3.65 billion
Free cash flow (excluding the impact of merger and restructuring related payments)$1.7 billion to $1.9 billion $1.6 billion to $1.8 billion

Summary of Second Quarter 2021 Financial Results

  • Rental revenue for the quarter was $1.951 billion, reflecting an increase of 18.8% year-over-year. The increase reflects, in part, the pronounced impact of COVID-19 in the second quarter of 2020. Fleet productivity increased 17.8% year-over-year, primarily as a result of better fleet absorption.
  • Used equipment sales in the quarter increased 10.2% year-over-year, reflecting a strong used equipment market. These sales generated $194 million of proceeds at a GAAP gross margin of 43.3% and an adjusted gross margin7 of 47.9%; this compares with $176 million at a GAAP gross margin of 40.3% and an adjusted gross margin of 46.0% for the same period last year. The gross margin increases were primarily due to stronger pricing, which rose sequentially for the third consecutive quarter. Used equipment proceeds in the quarter were 59% of original equipment cost (“OEC”), compared to 54% in the year-ago period.
  • Net income for the quarter increased 38.2% year-over-year to $293 million, while net income margin increased 190 basis points to 12.8%, primarily reflecting improved rental gross margin, decreased non-rental depreciation and amortization, and a $30 million (23%) reduction in net interest expense due to decreases in both average debt and the average cost of debt. The impact of these items was partially offset by higher selling, general and administrative (“SG&A”) and income tax expenses. Income tax expense increased $45 million, or 115%, and the effective income tax rate increased by 680 basis points, primarily reflecting the release in 2020 of a valuation allowance on foreign tax credits.
  • Adjusted EBITDA for the quarter increased 11.1% year-over-year to $999 million, while adjusted EBITDA margin decreased 270 basis points to 43.7%. The decrease in adjusted EBITDA margin included a 240 basis point reduction in rental margin (excluding depreciation), largely reflecting a higher bonus accrual and increased delivery expense. Adjusted EBITDA margin was also impacted by $13 million in one-time costs in the quarter related to recent acquisitions, of which $8 million was included in SG&A expense. SG&A expense also included increased bonus expense.
  • General rentals segment had a 16.8% year-over-year increase in rental revenue to $1.466 billion for the quarter. Rental gross margin increased by 250 basis points to 35.9%, primarily due to a reduction in depreciation expense as a percentage of revenue, partially offset by a higher bonus accrual and increases in certain operating expenses, including delivery costs, as a percentage of revenue.


6.Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below.
7.Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of fleet acquired in certain major acquisitions that was subsequently sold, as explained further in the tables below.
  • Specialty rentals segment (formerly “Trench, Power and Fluid Solutions”) rental revenue increased 25.3% year-over-year to $485 million for the quarter, including $24 million from the recent acquisition of General Finance. Rental gross margin decreased by 40 basis points to 46.4%, due primarily to the expected dilutive impact of the General Finance acquisition.
  • Cash flow from operating activities increased 32.4% year-over-year to $1.934 billion for the first six months of 2021, and free cash flow, including aggregated merger and restructuring payments, decreased 18.3% to $1.162 billion. The decrease in free cash flow was mainly due to increased net rental capital expenditures, partially offset by higher net cash from operating activities. Net rental capital expenditures increased $778 million.
  • Capital management. The company’s net leverage ratio was 2.5x at June 30, 2021, as compared to 2.4x at December 31, 2020. Year-to-date, net debt increased by $344 million, primarily reflecting the use of cash and borrowings under the ABL facility to fund the acquisition of General Finance, offset in part by cash generated from operations.
  • Total liquidity was $2.826 billion as of June 30, 2021, including $336 million of cash and cash equivalents, a decrease of $247 million from December 31, 2020.
  • Return on invested capital (ROIC)8 was 9.2% for the 12 months ended June 30, 2021, compared with 8.9% for the 12 months ended March 31, 2021 and 9.6% for the 12 months ended June 30, 2020. The year-over-year decrease was primarily due to a decline in after-tax operating income, offset in part by a reduction in invested capital, primarily from lower average debt. ROIC exceeded the company’s current weighted average cost of capital of approximately 8.0%.

Conference Call
United Rentals will hold a conference call tomorrow, Thursday, July 29, 2021, at 11:00 a.m. Eastern Time. The conference call number is 855-458-4217 (international: 574-990-3618). The conference call will also be available live by audio webcast at, where it will be archived until the next earnings call. The replay number for the call is 404-537-3406, passcode is 8277784.


8.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 U.S. federal corporate statutory tax rate of 21% was used to calculate after-tax operating income.

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, and plus proceeds from, equipment. The equipment purchases and proceeds represent cash flows from investing activities. 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. Adjusted EPS represents EPS plus the sum of the merger related costs, restructuring charge, the impact on depreciation related to acquired fleet and property and equipment, the impact of the fair value mark-up of acquired fleet, merger related intangible asset amortization and asset impairment charge. 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 help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made a
d debt is serviced; 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 adjusted EBITDA to GAAP financial measures is unavailable to the company without unreasonable effort. The company is not able to provide reconciliations of adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of the company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort. The company provides a range for its adjusted EBITDA forecast that it believes will be achieved, however it cannot accurately predict all the components of the adjusted EBITDA calculation. The company provides an adjusted EBITDA forecast because it believes that adjusted EBITDA, when viewed with the company’s results under GAAP, provides useful information for the reasons noted above. However, adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity.

About United Rentals
United Rentals, Inc. is the largest equipment rental company in the world. The company has an integrated network of 1,275 rental locations in North America, 11 in Europe, 28 in Australia and 18 in New Zealand. In North America, the company operates in 49 states and every Canadian province. The company’s approximately 19,900 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers approximately 4,200 classes of equipment for rent with a total original cost of $15.06 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

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,” “may,” “will,” “should,” “seek,” “on-track,” “plan,” “project,” “forecast,” “intend” or “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 cyclical nature of our business, which is highly sensitive to North American construction and industrial activities; if construction or industrial activity decline, our revenues and, because many of our costs are fixed, our profitability may be adversely affected; (2) uncertainty regarding emerging variant strains of the coronavirus (COVID-19), and regarding the length of time it will take for the COVID-19 pandemic to subside, including the time it will take for vaccines to be broadly distributed and accepted in the United States and the rest of the world, and the effectiveness of such vaccines in slowing or stopping the spread of COVID-19 and mitigating the economic effects of the pandemic; (3) the impact of the COVID-19 pandemic on global economic conditions, including the impact of the various measures that have been implemented to protect public health, many of which reduced, and could in the future again reduce, demand for equipment rentals; (4) the impact of global economic conditions (including potential trade wars) and public health crises and epidemics, such as COVID-19, on us, our customers and our suppliers, in the United States and the rest of the world; (5) rates we charge and time utilization we achieve being less than anticipated (including as a result of COVID-19); (6) excess fleet in the equipment rental industry, including as a result of reduced demand for fleet due to the impacts of COVID-19 on our customers; (7) inability to benefit from government spending, including spending associated with infrastructure projects; (8) trends in oil and natural gas could adversely affect the demand for our services and products; (9) competition from existing and new competitors; (10) 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; (11) the inability to refinance our indebtedness on terms that are favorable to us (including as a result of volatility and uncertainty in capital markets due to COVID-19), or at all; (12) the incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness; (13) noncompliance with financial or other covenants in our debt agreements, which could result in our lenders terminating the agreements and requiring us to repay outstanding borrowings; (14) restrictive covenants and amount of borrowings permitted in our debt instruments, which can limit our financial and operational flexibility; (15) inability to access the capital that our businesses or growth plans may require (including as a result of uncertainty in capital or other financial markets due to COVID-19); (16) the possibility that companies that we have acquired or may acquire could have undiscovered liabilities or involve other unexpected costs, may strain our management capabilities or may be difficult to integrate; (17) the incurrence of impairment charges; (18) fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated (for example, due to COVID-19); (19) our charter provisions as well as provisions of certain debt agreements and our significant indebtedness may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; (20) inability to manage credit risk adequately or to collect on contracts with a large number of customers; (21) turnover in our management team and inability to attract and retain key personnel, as well as loss, absenteeism or the inability of employees to work or perform key functions in light of public health crises or epidemics (including COVID-19); (22) costs we incur being more than anticipated and the inability to realize expected savings in the amounts or time frames planned; (23) inability to obtain equipment and other supplies for our business from our key suppliers on acceptable terms or at all, as a result of supply chain disruptions, insolvency, financial difficulties or other factors; (24) increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment; (25) inability to sell our new or used fleet in the amounts, or at the prices, we expect; (26) risks related to security breaches, cybersecurity attacks, failure to protect personal information, compliance with data protection laws and other significant disruptions in our information technology systems; (27) risks related to climate change and climate change regulation; (28) the fact that our holding company structure requires us to depend in part on distributions from subsidiaries and such distributions could be limited by contractual or legal restrictions; (29) shortfalls in our insurance coverage; (30) increases in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves; (31) incurrence of additional expenses (including indemnification obligations) and other costs in connection with litigation, regulatory and investigatory matters; (32) 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, and tariffs; (33) the outcome or other potential consequences of regulatory matters and commercial litigation; (34) labor disputes, work stoppages or other labor difficulties, which may impact our productivity, and potential enactment of new legislation or other changes in law affecting our labor relations or operations generally; and (35) the effect of changes in tax law.

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, 2020, 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.

Courtesy of -(BUSINESS WIRE)-

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