01—Abstract
Summary
Summary of the 10-K filed January 27, 2016. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) reported a modest increase in total revenues to $5.82 billiona for the fiscal year ended December 31, 2015, up from $5.69 billion in 2014.
This growth was primarily driven by a 2.7%b increase in equipment rentals, fueled by a 3.2% rise in equipment volume on rent, although rental rates saw a slight increase of only 0.5%. The company's strategy continues to focus on improving profitability through enhanced customer service, operational efficiencies via Lean management techniques, and optimizing its customer and fleet mix. Despite facing some pricing and volume pressures, particularly in its general rental business and the Pump Solutions region due to its exposure to upstream oil and gas customers, United Rentals maintained a strong market position as the largest equipment rental company globally.
The company also made significant strides in strengthening its capital structure through debt redemptions and extensions of credit facilities, improving financial flexibility and liquidity, ending the year with $1.10 billionc in available liquidity. The company's net income grew to $585 million in 2015, a 8.3% increase from $540 million in 2014, resulting in diluted earnings per share of $6.07, up from $5.15. United Rentals' balance sheet remained substantial, with total assets of $12.08 billion and total debt of $8.16 billion.
The company demonstrated a commitment to shareholder returns by continuing its share repurchase program, authorized for up to $1 billiond. Looking ahead to 2016, United Rentals anticipates continued industry growth and plans to further expand its specialty rental offerings.
02—Key points
Key Highlights
- Total revenues increased by 2.3% to $5.82 billion in 2015, driven by a 2.7% rise in equipment rentals.
- Net income grew by 8.3% to $585 million, with diluted EPS increasing to $6.07 from $5.15 in the prior year.
- The company's strategic focus on operational efficiency through 'Lean' management techniques (Operation United 2) aims to improve profitability.
- United Rentals completed significant debt refinancing and extension activities, enhancing financial flexibility with $1.10 billion in available liquidity at year-end 2015.
- Despite industry pressures, the company maintained its position as the world's largest equipment rental provider.
- A $1 billion share repurchase program was active, demonstrating a commitment to returning capital to shareholders.
- The company anticipates 6% industry growth in North America for 2016 and plans to open at least 14 new specialty rental branches.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, United Rentals, Inc. kept $0.10.
- Revenue$5.82B100.0%
- Cost of revenue−$3.34B57.4%
- Gross profit$2.48B42.6%
- Operating costs−$962.0M16.5%
- Operating income$1.52B26.1%
- Interest, other & tax−$933.0M16.0%
- Net income$585.0M10.1%
Where FY2015 revenue went
$5.82B- Cost of revenue: $3.34B, 57% of revenue
- Interest, other & tax: $933.0M, 16% of revenue
- SG&A: $714.0M, 12% of revenue
- Net income: $585.0M, 10% of revenue
- Other operating costs: $248.0M, 4.3% of revenue
Kept 10% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed January 27, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $5.82B$5.68B | +2.3% |
| Cost of Revenue | $3.34B$3.25B | +2.6% |
| Gross Profit | $2.48B$2.43B | +2.0% |
| SG&A Expenses | $714.00M$758.00M | −5.8% |
| Operating Income | $1.52B$1.39B | +9.1% |
| Net Income | $585.00M$540.00M | +8.3% |
| EPS (Basic) | $6.14$5.54 | +10.8% |
| EPS (Diluted) | $6.07$5.15 | +17.9% |
| Shares Outstanding (Basic) | 95.17M97.49M | −2.4% |
| Shares Outstanding (Diluted) | 96.38M104.96M | −8.2% |
05—Questions
Frequently Asked Questions
What was United Rentals' financial performance in 2015?
In 2015, United Rentals reported total revenues of $5.82 billion, a 2.3% increase from 2014. Net income rose by 8.3% to $585 million, and diluted earnings per share improved to $6.07 from $5.15 in the prior year. The company benefited from increased equipment rental volume and a slight rise in rental rates.
What are the key strategic initiatives United Rentals is pursuing?
United Rentals is focused on improving profitability through a strategy that includes enhancing customer service with a single point of contact, optimizing its customer and fleet mix, implementing 'Lean' management techniques (Operation United 2) to drive operational efficiencies, and expanding its specialty rental segments (Trench, Power, and Pump).
How is the company managing its debt and liquidity?
United Rentals has actively managed its capital structure by redeeming and extending debt facilities. As of December 31, 2015, the company had $1.10 billion in available liquidity and maintained compliance with its debt covenants. The company's total debt stood at $8.16 billion.
What are the primary risks and challenges facing United Rentals?
The company's business is cyclical and sensitive to construction and industrial activity. Key risks include potential economic slowdowns, increased competition, fluctuations in commodity prices impacting equipment costs, and risks associated with its significant debt levels. The company also noted pricing and volume pressures, particularly in the Pump Solutions segment linked to upstream oil and gas customers.
06—Continue