Name: United Rentals Inc. (NYSE:URI) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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United Rentals Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	2,105)	1,386)	890)	1,174)	1,096)
Depreciation and amortization	2,217)	1,983)	1,988)	2,038)	1,671)
Amortization of deferred financing costs and original issue discounts	13)	13)	14)	15)	12)
Gain on sales of rental equipment	(566)	(431)	(332)	(313)	(278)
Gain on sales of non-rental equipment	(9)	(10)	(8)	(6)	(6)
Insurance proceeds from damaged equipment	(32)	(25)	(40)	(24)	(22)
Stock compensation expense, net	127)	119)	70)	61)	102)
Merger related costs	—)	3)	—)	1)	36)
Restructuring charge	—)	2)	17)	18)	31)
Loss on repurchase/redemption of debt securities	17)	30)	183)	61)	—)
Increase (decrease) in deferred taxes	537)	268)	(121)	204)	257)
(Increase) decrease in accounts receivable	(329)	(300)	218)	39)	(115)
(Increase) decrease in inventory	(25)	9)	(5)	(8)	(20)
(Increase) decrease in prepaid expenses and other assets	(164)	248)	(228)	(59)	75)
Increase (decrease) in accounts payable	304)	307)	10)	(86)	49)
Increase (decrease) in accrued expenses and other liabilities	238)	87)	2)	(91)	(35)
Changes in operating assets and liabilities, net of amounts acquired	24)	351)	(3)	(205)	(46)
Adjustments to reconcile net income to net cash provided by operating activities	2,328)	2,303)	1,768)	1,850)	1,757)
Net cash provided by operating activities	4,433)	3,689)	2,658)	3,024)	2,853)
Purchases of rental equipment	(3,436)	(2,998)	(961)	(2,132)	(2,106)
Purchases of non-rental equipment and intangible assets	(254)	(200)	(197)	(218)	(185)
Proceeds from sales of rental equipment	965)	968)	858)	831)	664)
Proceeds from sales of non-rental equipment	24)	30)	42)	37)	23)
Insurance proceeds from damaged equipment	32)	25)	40)	24)	22)
Purchases of other companies, net of cash acquired	(2,340)	(1,436)	(2)	(249)	(2,966)
Purchases of investments	(7)	—)	(3)	(3)	(3)
Net cash used in investing activities	(5,016)	(3,611)	(223)	(1,710)	(4,551)
Proceeds from debt	9,885)	8,364)	9,260)	9,260)	12,178)
Payments of debt	(8,241)	(8,462)	(11,245)	(9,678)	(9,942)
Payments of financing costs	(24)	(8)	(23)	(28)	(24)
Proceeds from the exercise of common stock options	—)	—)	1)	11)	2)
Common stock repurchased, including tax withholdings for share based compensation	(1,068)	(34)	(286)	(870)	(817)
Net cash provided by (used in) financing activities	552)	(140)	(2,293)	(1,305)	1,397)
Effect of foreign exchange rates	(7)	4)	8)	—)	(8)
Net increase (decrease) in cash and cash equivalents	(38)	(58)	150)	9)	(309)
Cash and cash equivalents at beginning of year	144)	202)	52)	43)	352)
Cash and cash equivalents at end of year	106)	144)	202)	52)	43)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial data indicates a period of substantial growth in operational cash generation and aggressive capital investment between 2018 and 2022. Net income exhibited a general upward trajectory, rising from 1,096 million USD in 2018 to 2,105 million USD in 2022, despite a temporary contraction in 2020. This growth in profitability is mirrored by net cash provided by operating activities, which increased from 2,853 million USD to 4,433 million USD over the same period, reflecting strong core business cash flow.

Operating Cash Flow and Reconciliation: Operating cash flows are heavily influenced by significant non-cash adjustments. Depreciation and amortization costs remained high and generally increased, reaching 2,217 million USD in 2022, acting as a primary add-back to net income. A consistent trend is observed in the gain on sales of rental equipment, which increased from 278 million USD in 2018 to 566 million USD in 2022; as a non-cash gain, this serves to reduce net cash provided by operations. Working capital adjustments showed volatility, particularly in accounts receivable, which experienced significant increases in 2021 and 2022, creating a cash drag of 300 million USD and 329 million USD, respectively.
Investing Activities and Asset Expansion: Cash flows from investing activities were consistently negative, reflecting a strategy of aggressive fleet expansion and strategic acquisitions. Purchases of rental equipment saw a marked increase, rising from 2,106 million USD in 2018 to 3,436 million USD in 2022. This expenditure was partially offset by proceeds from the sale of rental equipment, which grew from 664 million USD to 965 million USD over the period. Furthermore, significant capital was deployed for the acquisition of other companies, with major outflows occurring in 2018 (2,966 million USD), 2021 (1,436 million USD), and 2022 (2,340 million USD), indicating a sustained inorganic growth strategy.
Financing and Liquidity Management: Financing activities are characterized by high volumes of debt issuance and repayment, suggesting an active debt management strategy to fund CapEx and acquisitions. Proceeds from debt remained substantial throughout the period, averaging approximately 9 billion USD annually. Shareholder returns were prioritized through common stock repurchases, which were most aggressive in 2018 (817 million USD), 2019 (870 million USD), and 2022 (1,068 million USD). Despite these activities, the ending cash and cash equivalents remained relatively low relative to the scale of operations, fluctuating between 43 million USD and 202 million USD.

Overall, the transition from 2018 to 2022 shows a company leveraging strong operating cash flows and debt markets to fund a massive expansion of its rental fleet and a series of strategic acquisitions. The increasing gap between net income and operating cash flow is largely driven by higher depreciation and the increasing profitability of equipment disposals.

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