United Rentals, Inc. announced financial results for the fourth quarter and full year 2011. For the fourth quarter, total revenues were $746 million and rental revenue was $589 million, compared with $597 million and $497 million, respectively, for 2010. For the full year 2011, total revenues were $2.6 billion and rental revenue was $2.2 billion, compared with $2.2 billion and $1.8 billion, respectively, for 2010.
 
For the fourth quarter 2011, adjusted EBITDA, which excludes the impact of special items, was $281 million and adjusted EBITDA margin was 37.7%, an increase of $100 million, or 55.2%, and 7.4 percentage points from the fourth quarter 2010. For the full year 2011, adjusted EBITDA was $929 million and adjusted EBITDA margin was 35.6%, an increase of $238 million, or 34.4%, and 4.7 percentage points from last year. The company’s EBITDA and adjusted EBITDA for the fourth quarter and full year 2011 include an $8 million benefit related to the reduction of the company’s self-insurance reserves, as compared to an $18 million charge in the fourth quarter and full year 2010.
 
2011 Highlights

• For the fourth quarter 2011, on a GAAP basis, the company reported income from continuing operations of $28 million, or $0.39 per diluted share, compared with a loss of $17 million, or $0.29 per diluted share, for the same period in 2010. On an adjusted basis, excluding the impact of special items2, EPS for the fourth quarter 2011 was $0.82 per diluted share, compared with $0.16 per diluted share in 2010. The effective tax rate for the fourth quarter 2011 was 50.0%.

• Rental revenue increased 18.5% for the fourth quarter 2011, compared with the fourth quarter of the prior year, reflecting year-over-year increases of 6.7% in rental rates and 15.1% in the volume of equipment on rent. For the full year, rental rates increased 6.1% from 2010.

• Time utilization for the fourth quarter 2011 increased 1.5 percentage points year-over-year to 70.8%, a fourth quarter record for the company. Time utilization for the full year 2011 was 69.1%, an increase of 3.5 percentage points and a full year record for the company.

• Free cash flow was $23 million for the full year 2011, compared with $227 million for 2010. Full year net rental capital expenditures (defined as purchases of rental equipment less the proceeds from sales of rental equipment) were $566 million in 2011, compared with $202 million in 2010.

• For the full year 2011, the company recognized $208 million from sales of rental equipment at a gross margin of 31.7%, compared with $144 million in sales at a gross margin of 28.5% last year.

 The company provided the following outlook for the full year 2012:

• An increase of rental rates of 5% year over year;

• An increase in time utilization of approximately 0.5 percentage points year-over-year;

• Net rental capital expenditures of between $770 million and $820 million, after gross purchases of approximately $1.0 billion; and

• Free cash usage (negative flow) in the range of $50 million to $100 million.

Michael Kneeland, chief executive officer of United Rentals, said, "The fourth quarter marked a strong end to a stellar year for our company, particularly in light of the sluggish economy. Once again, we drove rental revenue ahead of the construction recovery through a combination of rate improvement and record time utilization on a larger fleet. The fundamentals of our growth are rock solid: our strategic focus on customer service excellence, rigorous efficiency and rental rate expansion. I’m very proud of the way our employees have delivered in all of these areas. Through their efforts, we are in an excellent position to capitalize on the emerging up-cycle as well as the broader secular shift toward equipment rental.”
 
Kneeland continued, "We are tremendously excited about the opportunities of 2012, which we expect will be a transformative year for United Rentals. We’re making good progress on all fronts toward our intended acquisition of RSC and the integration planning. With our markets in recovery, the timing is ideal to combine these two companies into a best-in-class United Rentals with a wealth of best practices for value creation.”