01—Abstract
Summary
Summary of the 10-K filed January 22, 2014. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) reported strong performance in its 2013 annual filing, demonstrating significant recovery and growth following the 2012 acquisition of RSC Holdings Inc. (RSC).
Total revenues increased by 20.4% to $5.0 billiona, driven by a 21.4% rise in equipment rentals. This growth was supported by a 4.2% increase in rental rates and a substantial 22.1% increase in the volume of equipment on rent, reflecting the integration of RSC and improved asset productivity. The company also achieved a 1.3 percentage point improvement in SG&A expenses as a percentage of revenue, benefiting from approximately $236 million in realized synergies from the RSC merger.
Looking ahead to 2014, United Rentals anticipates continued market recovery, projecting an 8% increase in overall North American construction activity and equipment rental revenue. The company's strategy remains focused on profitability, return on invested capital, optimizing customer and fleet mix, and implementing lean management techniques. With a robust fleet valued at $7.7 billionb at year-end 2013 and a commitment to operational efficiencies, United Rentals is well-positioned to capitalize on the expanding construction and industrial markets.
02—Key points
Key Highlights
- Total revenues grew 20.4% to $5.0 billion in 2013, up from $4.1 billion in 2012, primarily driven by the RSC acquisition and market recovery.
- Equipment rental revenue increased by 21.4% year-over-year, boosted by a 4.2% increase in rental rates and a 22.1% rise in the volume of equipment on rent.
- The company realized approximately $236 million in total synergies from the RSC acquisition, with $110 million in SG&A savings and $126 million in cost of equipment rentals.
- SG&A expenses improved by 1.3 percentage points as a percentage of revenue, reflecting cost synergies and operational efficiencies.
- Time utilization for the fleet remained strong at 68.2% in 2013, slightly up from 67.5% in 2012.
- Key accounts, a focus of the company's strategy, represented 61% of equipment rental revenue, an increase from 60% in 2012.
- United Rentals forecasts an 8% increase in North American construction activity and equipment rental revenue for 2014.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, United Rentals, Inc. kept $0.08.
- Revenue$4.96B100.0%
- Cost of revenue−$2.97B59.9%
- Gross profit$1.99B40.1%
- Operating costs−$909.0M18.3%
- Operating income$1.08B21.8%
- Interest, other & tax−$691.0M13.9%
- Net income$387.0M7.8%
Where FY2013 revenue went
$4.96B- Cost of revenue: $2.97B, 60% of revenue
- Interest, other & tax: $691.0M, 14% of revenue
- SG&A: $642.0M, 13% of revenue
- Net income: $387.0M, 7.8% of revenue
- Other operating costs: $267.0M, 5.4% of revenue
Kept 7.8% as net incomeNet income $387.0M · 7.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed January 22, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $4.96B$4.12B | +20.4% |
| Cost of Revenue | $2.97B$2.53B | +17.3% |
| Gross Profit | $1.99B$1.59B | +25.2% |
| SG&A Expenses | $642.00M$588.00M | +9.2% |
| Operating Income | $1.08B$591.00M | +82.4% |
| Net Income | $387.00M$75.00M | +416.0% |
| EPS (Basic) | $4.14$0.91 | +354.9% |
| EPS (Diluted) | $3.64$0.79 | +360.8% |
| Shares Outstanding (Basic) | 93.44M82.96M | +12.6% |
| Shares Outstanding (Diluted) | 106.29M94.85M | +12.1% |
05—Questions
Frequently Asked Questions
What was the impact of the RSC Holdings acquisition on United Rentals' financial performance in 2013?
The acquisition of RSC Holdings Inc. in April 2012 significantly impacted United Rentals' financial performance in 2013. It drove a substantial increase in total revenues and equipment rental volume. The integration also yielded approximately $236 million in cost synergies, contributing to improved profitability and operational efficiencies, including a 1.3% reduction in SG&A as a percentage of revenue.
How did United Rentals manage its debt and liquidity in 2013?
In 2013, United Rentals continued to strengthen its financial position by taking actions to improve financial flexibility and liquidity. These included amending and increasing its ABL facility to $2.3 billion and its accounts receivable securitization facility to $550 million. The company also retired all outstanding subordinated convertible debentures and announced the redemption of its 10 1/4 percent Senior Notes. As of December 31, 2013, the company reported available liquidity of $1.37 billion, indicating a healthy cash position to support operations.
What is United Rentals' outlook for the construction and equipment rental market in 2014?
United Rentals expressed an optimistic outlook for 2014, expecting continued recovery in its end markets. Based on industry forecasts and macroeconomic indicators, the company anticipates overall North American construction activity and equipment rental revenue to increase by approximately 8%.
What strategic priorities is United Rentals focusing on for future growth?
United Rentals' strategy is centered on improving profitability and return on invested capital. Key priorities include optimizing its customer and fleet mix to focus on accounts best suited for profitable growth, implementing 'Lean' management techniques through its 'Operation United 2' program to enhance operational efficiency, and continuing to expand its specialty rental segments (trench safety, power, and HVAC) to further solidify its position as a single-source provider of total jobsite solutions.
06—Continue