United Rentals
 | |
| Public | |
| Traded as |
(NYSE: URI) S&P 500 component |
| Founded | 1997 |
| Headquarters | Greenwich, Connecticut |
Key people |
Michael J. Kneeland, CEO William B. Plummer, CFO Matthew Flannery, COO |
| Products | Construction & Industrial Rentals and Sales |
| Slogan | "Consider It Done." |
| Website | http://www.ur.com |
United Rentals, Inc. is the largest equipment rental company in the world, with over 880 rental locations throughout the United States and Canada.[1] The company was founded in 1997 by Bradley Jacobs and seven others, and its customer base includes construction and industrial companies, utilities, municipalities, and homeowners. In addition to equipment rentals, the company offers new and used equipment sales, safety training, and 24/7 equipment service support.
United Rentals is headed up by Michael J. Kneeland (President & CEO) and William B. Plummer (Executive Vice President & CFO). Total annual revenue in 2008 was $3.3 billion, including $2.5 billion in equipment rental revenue. United Rentals also holds about a 13 percent share of construction and industrial equipment rentals in North America. Having the largest fleet of rental equipment in the world, United Rentals employs more than 12,000 employees, servicing over 300 metropolitan areas, 49 states, and ten Canadian provinces.
The company has five main divisions: General Rentals & Aerial, Power & HVAC, Trench Safety, Industrial Tools, and Pump Solutions. While the general rental branches are the most prolific and yielding for the company, the other divisions are increasingly a larger portion of United's revenue.
Business operations
United Rentals operates through two business segments:
General Rentals: United Rentals offers construction and industrial equipment rentals, as well as homeowner equipment and tool rentals. This also includes aerial equipment, and United Rentals offers North America’s largest rental fleet of aerial work platforms.
Specialty Products (Trench Safety, Power and HVAC, Tools, Pump Solutions): This segment includes specialty equipment rentals for underground construction (plus related training services), temporary power, climate control, jobsite tool rentals and management, and pump equipment. Primary customers for this include infrastructure contractors, industrial companies, municipalities and the military.
History
SEC investigation
In 2004, the United States Securities and Exchange Commission announced it was conducting an inquiry into the accounting records of the company. A class action lawsuit was filed on behalf of the stock and securities holders of United Rentals to allege its earnings manipulation.[2] While exonerated from any misdoings, United Rentals did have to recalculate its earnings for the fiscal years, 2003-2004.
Abramoff scandal
In 2008, former Senate staffer Trevor Blackann pleaded guilty and United Rentals lobbyists James Hirni and Todd Boulanger were named for defrauding the government on behalf of United Rentals in 2003. Boulanger and Hirni gave Blackann and a House staffer an all-expenses-paid trip to Game 1 of the 2003 World Series in exchange for amendments to the Federal Highway Bill that favored United Rentals. At the time, Hirni and Boulanger were lobbyists in Jack Abramoff's group at Greenberg Traurig.[3]
Business outlook and transformation
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In general, recent U.S.contractors have increasingly relied on rentals of equipment rather than owning or leasing, as had been the case in the past. United Rentals, resultantly, is poised to benefit tremendously from this shift given its current market share. Nonetheless, URI seeks to improve its overall business model and, subsequently, has undertaken new initiatives to achieve this goal:
On December 26, 2006 United Rentals announced the sale of their Highway Technology division to HTS Acquisition, Inc., an entity newly formed by affiliates of private equity investors Wynnchurch Capital Partners and Oak Hill Special Opportunities Fund, L.P.
On April 10, 2007 United Rentals announced that the board of directors would be exploring strategic alternatives for the entity, including a potential sale of the company. It was also announced that Wayland Hicks, CEO, would be retiring in Summer 2007. Michael Kneeland is now the acting CEO.
On July 23, 2007 United Rentals announced a definitive agreement to sell the company to Cerberus Capital Management in a transaction valued at approximately $6.6 billion, including the assumption of approximately $2.6 billion in debt obligations. The board of directors of United Rentals approved the merger agreement and had recommended the approval of the transaction by United Rentals' stockholders. In anticipation of the merger, United Rentals embarked on a series of restructuring moves which included department closures and layoffs.
On November 15, 2007 United Rentals announced that Cerberus Capital Management, L.P. informed it that Cerberus was not prepared to proceed with the purchase of United Rentals on the terms set forth in its merger agreement, dated July 22, 2007. The company noted that Cerberus had specifically confirmed that there had not been a material adverse change at United Rentals. On December 21, 2007 a Delaware Chancery Court ruling denied United Rentals attempt to force Cerberus to follow through on the takeover bid. However, the court did order Cerberus to pay a $100 million termination fee.
On December 16, 2011, United Rentals and RSC Holdings, Inc. announced that they had entered into a definitive merger agreement, under which United Rentals would acquire RSC in a cash-and-stock transaction.[4] The merger was finalized on April 30, 2012.[5]
URI rents over 2,900 different classes of equipment. With the acquisition of RSC Rentals finalized, United Rentals now holds about 13% of the equipment rental industry by revenue, the biggest share of any company in its segment.[6]
Fortune 500
In 2014, United Rentals was listed in the Fortune 500 for the first time. Based on 2013 revenues of $4.955 billion, the company was ranked at no. 500 exactly.[7]
Restatement
On March 14, 2005, the company restated results for 1999 to 2003 to correct an overstated income tax provision.[8] On January 26, 2006, the securities and exchange commission investigatd United's sale-leaseback transactions from December 2000 through March 2002 and said the company would have to restate years of financial results.[9] On March 31, 2006, The company's final results for 2005 include revenues of $3.56 billion and diluted earnings per share of $1.80, compared with preliminary earnings per share of $1.81, reflecting an additional restatement, related to the allocation of the purchase price of acquisitions completed since July 2001. [10]
References
- ↑ United Rentals overview at linkedin.com
- ↑ "Shareholder class action lawsuit filed against United Rentals". October 4, 2004. Retrieved Jul 26, 2013.
- ↑ Zachary Roth (November 24, 2008). "Abramoff Lobbyists Wanted Measure Attached To Young's Transportation Bill". TPM Muckraker.
- ↑ "United Rentals to acquire RSC Holdings"
- ↑ Equipment World, April 30, 2012
- ↑ Illia, Tony. "Merger Complete, Will United and RSC Get A New Name?" Article at enr.construction.com on May 14, 2012.
- ↑ "United Rentals Makes Fortune 500 List". rermag.com. June 6, 2014. Retrieved June 16, 2014.
- ↑ "United Rentals delays results, to restate earnings.".
- ↑ "United Rentals probe leads to more dismissals".
- ↑ "United Rentals Files 2005 and 2004 Annual Reports on Form 10-K".