United Rentals Q4 Volume Totals Slow, But EBITDA Remains Strong
United Rentals fourth quarter total revenue was $1.523 billion, down from $1.564 billion in the fourth quarter of 2014, a 2.6 percent decline, while rental revenue was $1.278 billion, down from $1.320 billion, a 3.2-percent drop. On a GAAP basis, the company reported fourth quarter net income of $169 million, compared to $194 million in last year’s fourth quarter, a 12.9-percent slide.
For the full year 2015, total revenue was $5.817 billion, up from $5.685 billion, a 2.3-percent hike. Rental revenue was $4.949 billion, compared to $4.819 billion in 2014, a 2.7-percent jump.
For the fourth quarter and full year 2015, the company’s Trench Safety and Power & HVAC businesses' rental revenue increased by a combined 12 percent and 21 percent, respectively, year over year, primarily on a same-store basis. Return on invested capital was 8.8 percent for full year 2015, which was flat year-over-year.
Time utilization decreased 240 basis points year over year to 68.2 percent for the fourth quarter of 2015. Full year time utilization decreased 150 basis points to 67.3 percent.
"While 2015 proved to be challenging in many ways, it also showcased the resilience and flexibility of our business,” said United Rentals CEO Michael Kneeland. “Our full year adjusted EBITDA dollars and margin were both records for our company, as was our strong free cash flow after capex. This was a solid performance in light of the decline in upstream oil and gas and its knock-on effects, particularly in Canada.
"Although we agree with industry forecasters that there is further growth ahead, there is still market uncertainty. For 2016, our stance is to be cautious on capex and proactive about pursuing profitable growth opportunities in areas such as our specialty rental services. In the first quarter, we plan to spend less than half of the capex we spent in the first quarter last year, and we’ll adjust our full year spend up or down based on the level of demand we experience. We expect to use our nearly billion dollars of free cash flow this year to buy back shares and pay down debt."
United Rentals expects total revenue for 2016 in the range of $5.65 billion to $5.95 billion, with adjusted EBITDA between $2.7 billion to $2.9 billion.
Based in Stamford, Conn., United Rentals has 897 rental locations in 49 states and 10 Canadian provinces, and is No. 1 on the RER 100.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.