01—Abstract
Summary
Summary of the 10-K filed January 23, 2013. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc.'s 2012 10-K report highlights a year of significant growth and strategic advancement, primarily driven by the transformative acquisition of RSC Holdings Inc. This acquisition nearly doubled the company's total assets and substantially increased its revenue, positioning United Rentals as the largest equipment rental company globally.
The company demonstrated resilience in a challenging economic environment, achieving a 6.9% increase in rental rates on a pro forma basis and a substantial 63.2% rise in the volume of equipment on rent. This growth was supported by a strategic focus on customer service, increased penetration with national accounts, and disciplined cost control. Financially, the company reported net income of $75 milliona for 2012, a decrease from $101 million in 2011, largely due to significant merger-related costs and restructuring charges.
However, the company's adjusted EBITDA saw a substantial increase of 90.7%b, indicating strong operational performance beyond one-time expenses. Management expressed confidence in the company's positioning for continued recovery in 2013, expecting mid-to-high single-digit revenue growth for the equipment rental industry. The company also took steps to improve its financial flexibility by restructuring its debt and increasing its available liquidity.
02—Key points
Key Highlights
- The acquisition of RSC Holdings Inc. in April 2012 significantly expanded United Rentals' scale, fleet, and market presence, nearly doubling its asset base and revenue.
- The company reported a 6.9% pro forma increase in rental rates and a 63.2% increase in the volume of Original Equipment Cost (OEC) on rent for 2012, reflecting improved pricing power and higher utilization.
- Revenue for 2012 reached $4.1 billion, a 57.7% increase over 2011, primarily driven by equipment rentals which grew 60.6%.
- Despite a reported net income of $75 million (down from $101 million in 2011), Adjusted EBITDA increased by 90.7% to $1.77 billion, indicating strong underlying operational performance.
- The company successfully improved its financial flexibility by issuing new debt, increasing its revolving credit facility, and amending its accounts receivable securitization facility.
- United Rentals continues to emphasize its strategic focus on customer service differentiation, customer segmentation, rate management, fleet management, and disciplined cost control.
- The company anticipates mid-to-high single-digit revenue growth for the equipment rental industry in 2013, reflecting an improving economic environment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, United Rentals, Inc. kept $0.02.
- Revenue$4.12B100.0%
- Cost of revenue−$2.53B61.5%
- Gross profit$1.59B38.5%
- Operating costs−$996.0M24.2%
- Operating income$591.0M14.4%
- Interest, other & tax−$516.0M12.5%
- Net income$75.0M1.8%
Where FY2012 revenue went
$4.12B- Cost of revenue: $2.53B, 61% of revenue
- SG&A: $588.0M, 14% of revenue
- Interest, other & tax: $516.0M, 13% of revenue
- Net income: $75.0M, 1.8% of revenue
- Other operating costs: $408.0M, 9.9% of revenue
Kept 1.8% as net incomeNet income $75.0M · 1.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed January 23, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $4.12B$2.61B | +57.7% |
| Cost of Revenue | $2.53B$1.71B | +47.7% |
| Gross Profit | $1.59B$898.00M | +76.7% |
| SG&A Expenses | $588.00M$407.00M | +44.5% |
| Operating Income | $591.00M$396.00M | +49.2% |
| Net Income | $75.00M$101.00M | −25.7% |
| EPS (Basic) | $0.91$1.62 | −43.8% |
| EPS (Diluted) | $0.79$1.38 | −42.8% |
| Shares Outstanding (Basic) | 82.96M62.18M | +33.4% |
| Shares Outstanding (Diluted) | 94.85M73.35M | +29.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of United Rentals' performance in 2012?
The acquisition of RSC Holdings Inc. in April 2012 was the primary driver of United Rentals' performance in 2012, significantly increasing the company's size, fleet, market share, and revenue.
How did the RSC acquisition impact the company's financial results?
The RSC acquisition led to a substantial increase in revenues and fleet size. However, it also resulted in significant merger-related costs and restructuring charges, which impacted net income. Despite these one-time costs, the underlying operational performance, as indicated by Adjusted EBITDA, showed strong growth.
What is United Rentals' outlook for 2013?
United Rentals expects the equipment rental industry to experience mid-to-high single-digit revenue growth in 2013, driven by an improving economic environment. The company plans to continue focusing on optimizing its core business through enhanced customer service, increased penetration with large accounts, and cost efficiencies.
How is United Rentals managing its debt levels?
In 2012, United Rentals took several actions to improve its financial flexibility and liquidity, including issuing new debt and increasing its credit facilities. The company's stated intention is to use expected positive free cash flow in 2013 to reduce its leverage.
06—Continue