01—Abstract
Summary
Summary of the 10-K filed February 3, 2010. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) faced a challenging economic environment in 2009, with total revenues declining by 27.8% to $2.36 billiona, primarily due to a significant drop in equipment rental revenue.
This was driven by an 11.8% decrease in rental rates and a 2.9 percentage point decline in equipment utilization. Despite the revenue decline, the company demonstrated resilience by generating $367 millionb in free cash flow and implementing significant cost-reduction measures, including a reduction in employee headcount by 20% and closing 64 branches. Management is focused on optimizing the core rental business, increasing revenue from national accounts, and capitalizing on opportunities in the industrial marketplace to drive future growth and profitability.
Financially, United Rentals managed its debt effectively, issuing new senior notes and using proceeds to repurchase existing debt, improving its debt maturity profile. The company ended 2009 with $954 millionc in borrowing capacity under its ABL facility and $19 million under its accounts receivable securitization facility, alongside $169 million in cash, indicating sufficient liquidity for the near term. The company anticipates continued revenue declines in 2010, though at a slower pace than in 2009, and plans for net rental capital expenditures between $100 million and $120 million.
02—Key points
Key Highlights
- Total revenues decreased by 27.8% to $2.36 billion in 2009, impacted by a challenging economic environment.
- Equipment rental revenue declined by 26.7% due to lower rental rates and utilization.
- The company successfully generated $367 million in free cash flow in 2009.
- Significant cost-saving measures were implemented, including a 20% reduction in headcount and closure of 64 branches.
- Focus on increasing revenue from National Accounts, which grew to 24% of total revenue in 2009.
- The company improved its debt maturity profile by repurchasing outstanding debt securities.
- Management expects continued revenue decline in 2010 but at a slower pace than in 2009.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, United Rentals, Inc. lost $0.03.
- Revenue$2.36B100.0%
- Cost of revenue−$1.75B74.1%
- Gross profit$610.0M25.9%
- Operating costs−$496.0M21.0%
- Operating income$114.0M4.8%
- Interest, other & tax−$176.0M7.5%
- Net income−$62.0M2.6%
Where FY2009 revenue went
$2.36B- Cost of revenue: $1.75B, 74% of revenue
- SG&A: $408.0M, 17% of revenue
- Operating income: $114.0M, 4.8% of revenue
- Other operating costs: $88.0M, 3.7% of revenue
Kept 4.8% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 3, 2010Financial Statements
| Revenue | $2.36B |
| Cost of Revenue | $1.75B |
| Gross Profit | $610.00M |
| SG&A Expenses | $408.00M |
| Operating Income | $114.00M |
| Net Income | -$62.00M |
| EPS (Basic) | $-1.02 |
| EPS (Diluted) | $-1.02 |
| Shares Outstanding (Basic) | 60.10M |
| Shares Outstanding (Diluted) | 60.10M |
05—Questions
Frequently Asked Questions
What was the main driver of the revenue decline in 2009?
The primary driver of the revenue decline was the challenging economic environment, which significantly impacted the construction and industrial sectors. This led to an 11.8% decrease in rental rates and a 2.9 percentage point decrease in equipment utilization, resulting in a 26.7% drop in equipment rental revenue.
How did the company manage its costs during the economic downturn?
United Rentals implemented several cost-saving measures, including a significant reduction in employee headcount (approximately 20% from the prior year), closure of 64 underperforming branches, and reductions in SG&A expenses by 19.8%. These initiatives helped to partially offset the impact of lower revenues.
What is the company's outlook for 2010?
The company anticipates continued revenue decline in 2010, though at a slower rate than experienced in 2009. Management plans to focus on optimizing its core rental business, enhancing customer service, maintaining disciplined cost controls, and generating free cash flow. Key strategic priorities include increasing revenue from national accounts and expanding into the industrial marketplace.
How is the company positioned financially, particularly regarding debt?
United Rentals managed its debt by issuing new senior notes and using the proceeds to repurchase existing debt, thereby improving its debt maturity profile. As of December 31, 2009, the company had $954 million in borrowing capacity under its ABL facility and $19 million under its accounts receivable securitization facility, along with $169 million in cash, indicating adequate liquidity for its operations over the next 12 months.
06—Continue