United Rentals (URI) FY19 Revenue Guidance Tops Views, Resumes Share Repurchase Program

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December 11, 2018 4:32 PM EST

United Rentals, Inc. (NYSE: URI), the world’s largest equipment rental company, held its biennial Investor Day in New York City on December 11, 2018, to provide an in-depth look at a range of key initiatives. The event, hosted by senior leadership for members of the investment community, focused on the company’s strategic vision, sustainable competitive advantages and emphasis on long-term value maximization.

The company reaffirmed its 2018 financial guidance and announced full year financial guidance for 2019:

2018 Outlook 2019 Outlook
Total revenue $7.89 billion to $7.99 billion $9.15 billion to $9.55 billion
Adjusted EBITDA1 $3.815 billion to $3.865 billion $4.35 billion to $4.55 billion
Net rental capital expenditures after gross purchases $1.35 billion to $1.45 billion, after gross purchases of $2.0 billion to $2.1 billion $1.40 billion to $1.55 billion, after gross purchases of $2.15 billion to $2.3 billion
Net cash provided by operating activities $2.725 billion to $2.875 billion $2.85 billion to $3.20 billion
Free cash flow (excluding the impact of merger and restructuring related costs)2 $1.25 billion to $1.35 billion $1.3 billion to $1.5 billion
1. Adjusted EBITDA is a non-GAAP measure. Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below.
2.

Free cash flow is a non-GAAP measure, as discussed below. The table below provides a reconciliation between 2018 and 2019 forecasted net cash provided by operating activities and free cash flow (in millions).

Michael Kneeland, chief executive officer of United Rentals, said, “We’re continuing to position the company for enduring success by balancing growth, margins, returns and free cash flow. Differentiation is a critical element of our strategy – our business is firmly grounded in sustainable competitive advantages that we believe will benefit our shareholders in any environment.”

Kneeland continued, “Our 2019 guidance reflects the healthy momentum we see going into year-end and our confidence that positive conditions will prevail in the coming year. Our five 2018 acquisitions have been successfully integrated, increasing the tailwinds in our gen-rent and specialty segments. We look forward to reporting our fourth quarter results on January 23.”

Additionally, the company announced that it will resume its $1.25 billion share repurchase program this month. The program was initiated in July 2018, with approximately $210 million of shares purchased through September 30, 2018. The Company subsequently paused the program on November 1, 2018 to focus on the integration of the BlueLine acquisition. The company intends to complete the program by the end of 2019.

Amounts in millions 2018 Outlook 2019 Outlook
Net cash provided by operating activities $2,725 to $2,875 $2,850 to $3,200
Purchases of rental equipment $(2,000) to $(2,100) $(2,150) to $(2,300)
Proceeds from sales of rental equipment $600 to $700 $700 to $800
Purchases of non-rental equipment, net of proceeds from sales and insurance proceeds from damaged equipment $(75) to $(125) $(100) to $(200)
Free cash flow (excluding the impact of merger and restructuring related costs) $1,250 to $1,350 $1,300 to $1,500

(**Street sees FY19 Revenue of $9.15 billion)


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