United Rentals ends 2013 with 'pretty good' liquidity of $1.37 billion

By Lisa Kerner

Charlotte, N.C., Jan. 23 - United Rentals, Inc. ended the fourth quarter with about $1.37 billion of liquidity, including $1.1 billion of ABL capacity and $175 million of cash on hand, said chief financial officer Bill Plummer during the company's earnings call on Thursday.

Subsequent to quarter-end, the company used its upsized ABL to redeem $200 million of 10¼%, according to Plummer.

United Rentals' liquidity position is "pretty good" overall, said the CFO, and the company's leverage for 2014 is expected to be between 2.7 times and 2.8 times, from three times at year-end.

For the full year 2013, free cash flow was $383 million after total rental and non-rental capital expenditures of about $1.68 billion and total cash payments of $38 million related to merger and restructuring activities.

The company repurchased $9 million of common stock in the fourth quarter as part of the $500 million share repurchase program announced in October.

During 2014, United Rentals expects to spend $450 million on share repurchases, Plummer said.

Financial highlights

United Rentals reported total revenue for the quarter of about $1.34 billion and rental revenue was $1.13 billion, compared with about $1.25 billion and $1.04 billion, respectively, for the same period last year.

For the full year 2013, total revenue was about $4.96 billion and rental revenue was $4.2 billion.

Fourth quarter 2013 adjusted EBITDA and adjusted EBITDA margin increased $98 million and 440 basis points, respectively, from the same period in 2012. For the full year 2013, adjusted EBITDA and adjusted EBITDA margin increased $305 million and 370 basis points, respectively, from 2012, the release stated.

United Rentals outlook for 2014 included total revenue in a range of $5.25 billion to $5.45 billion; adjusted EBITDA in a range of $2.45 billion to $2.55 billion; and free cash flow in the range of $400 million to $450 million.

"This year, we will continue to implement our strategy to profitably grow the business, drive down leverage and return cash to shareholders," said chief executive Michael Kneeland.

United Rentals is a Greenwich, Conn.-based equipment rental company.

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