[URI] United Rentals
I.
United Rentals rents equipment that customers use to build and maintain commercial structures – office buildings, refineries, bridges, roads, etc. This includes general construction equipment, things like bulldozers, backhoes and excavators that dig and move dirt and rubble on construction sites…
aerial work platforms – scissor and boom lifts – that carry workers to high elevations…
as well as a long tail of “specialty” equipment, things like pumps and tanks to remove and store wastewater; trench safety structures to keep trench walls from caving in; generators and lighting equipment to supply power and lighting.
By equipment type, United’s revenue breaks down like this:
General Rentals and Specialty refer to different kinds of equipment but they have a few other relevant differences. First, the own/rent ratio in Specialty equipment is around 90/10 compared to 45/55 for general rentals. Second, gen rent is more heavily represented in the early stages of the construction lifecycle (holes are being dug, dirt is being moved) while Specialty is overweighted in the intermediate and end stages (holes are being reinforced or dewatered, fixtures are being installed), which smooth some of the construction cyclicality.
Third, the two categories have different service demands. With gen rent, the customer specifies what they want, where and when – “I need 3 dozers delivered to this construction site at this time on this day”. With Specialty, the customer specifies a problem – “my trenches are filled with rainwater, please fix” and United will show up with technicians and the right kinds of pumps and generators. They may assign a civil engineer to design a trench shoring program that is appropriate for the depth of a hole and its soil type. For a contractor working on a site that is off the utility grid, United will install a generator, connect it to a fuel tank, and refill it as needed. The equipment rental, labor, installation fees, fuel, and other services are bundled into a single service fee.