01—Abstract
Summary
Summary of the 10-K filed January 25, 2023. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) demonstrated robust growth in its 2022 fiscal year, reporting a significant increase in total revenues to $11.64 billiona, up 19.8% from the previous year.
This growth was driven by strong performance in equipment rentals, which saw a 23.3%b increase, supported by a larger fleet (OEC up 13.6%) and improved fleet productivity. The company also successfully navigated economic headwinds such as inflation and rising interest rates by strategically managing its fleet capacity and passing on some cost increases to customers. The acquisition of Ahern Rentals in December 2022 further expanded URI's market presence and fleet, contributing to a 17% estimated North American market share.
Despite increased debt levels to fund acquisitions, the company maintained strong liquidity and generated substantial free cash flow of $1.76 billionc. The company also announced its intention to initiate a quarterly dividend, signaling confidence in its financial position and commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Total revenues increased by 19.8% to $11.64 billion in 2022.
- Equipment rental revenue grew by 23.3%, driven by a 13.6% increase in fleet OEC and a 9.4% rise in fleet productivity.
- The company completed the acquisition of Ahern Rentals in December 2022, enhancing its market position and fleet.
- Free cash flow generation was strong at $1.76 billion for the year.
- United Rentals' estimated North American market share increased to 17% following the Ahern Rentals acquisition.
- The company ended the year with $2.896 billion in available liquidity.
- A quarterly dividend program was approved in January 2023, with the first dividend payable in February 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, United Rentals, Inc. kept $0.18.
- Revenue$11.64B100.0%
- Cost of revenue−$6.65B57.1%
- Gross profit$5.00B42.9%
- Operating costs−$1.76B15.2%
- Operating income$3.23B27.8%
- Interest, other & tax−$1.13B9.7%
- Net income$2.10B18.1%
Where FY2022 revenue went
$11.64B- Cost of revenue: $6.65B, 57% of revenue
- Net income: $2.10B, 18% of revenue
- SG&A: $1.40B, 12% of revenue
- Other operating costs: $364.0M, 3.1% of revenue
- Interest, other & tax: $1.13B, 9.7% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed January 25, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $11.64B$9.72B | +19.8% |
| Cost of Revenue | $6.65B$5.86B | +13.4% |
| Gross Profit | $5.00B$3.85B | +29.7% |
| SG&A Expenses | $1.40B$1.20B | +16.8% |
| Operating Income | $3.23B$2.28B | +41.9% |
| Net Income | $2.10B$1.39B | +51.9% |
| EPS (Basic) | $29.77$19.14 | +55.5% |
| EPS (Diluted) | $29.65$19.04 | +55.7% |
| Shares Outstanding (Basic) | 70.70M72.43M | −2.4% |
| Shares Outstanding (Diluted) | 70.97M72.82M | −2.5% |
05—Questions
Frequently Asked Questions
What were the key drivers of United Rentals' revenue growth in 2022?
United Rentals' revenue growth in 2022 was primarily driven by a 23.3% increase in equipment rental revenue, fueled by a larger fleet (represented by a 13.6% increase in Original Equipment Cost or OEC) and improved fleet productivity (up 9.4%). Acquisitions, specifically the General Finance acquisition in May 2021 and the Ahern Rentals acquisition in December 2022, also significantly contributed to the expanded fleet and revenue.
How did United Rentals manage inflationary pressures and rising interest rates?
United Rentals managed inflationary pressures by passing on a portion of cost increases to customers, particularly for fuel and delivery. To address rising interest rates, the company issued $1.5 billion in senior secured notes and also amended and extended its credit facilities, including an increase in its ABL facility size. The company also intentionally held back on equipment sales to ensure fleet availability for strong customer demand, which helped maintain rental capacity.
What is the significance of the Ahern Rentals acquisition?
The acquisition of Ahern Rentals in December 2022 was a significant strategic move that increased United Rentals' capacity in key geographies, expanded its high-demand aerial and material handling equipment offerings, and created cross-selling opportunities with an enlarged customer base. This acquisition contributed to United Rentals' estimated North American market share increasing to 17%.
What is the company's outlook for the equipment rental industry in 2023?
United Rentals projects that the North American equipment rental industry revenue will grow by approximately 4% in 2023, based on their analyses of industry forecasts and macroeconomic indicators.
06—Continue