Matthew J. Flannery, President & Chief Executive Officer
Michael J. Kneeland Chairman of the Board

Letter to stockholdersFrom Our CEO and Chairman

We marked our first 25 years in business by delivering the best financial performance in our history. Now we intend to raise the bar again in 2023.

2022 was another year of strong demand for equipment rental services, driven by major tailwinds in our end-markets. We leaned into that opportunity, continuing to invest in the business and growing rental revenue by double digits across our general rental and specialty segments.

In December, we acquired Ahern Rentals at an ideal time to expand our resources. While the transaction had little impact on our 2022 financial results, it enabled us to begin integrating approximately 2,100 employees, 60,000 fleet units and over 100 branches at year-end, ahead of seasonal demand. The acquisition is consistent with our strategy to “grow the core” to capture market share; it increased our service capacity to 24,600 employees and more than 1,500 branches.

For the full year 2022, we reported record total revenue of $11.6 billion, GAAP diluted earnings per share of $29.65, and adjusted EPS1 of $32.50. Net income was $2.1 billion, at a margin of 18.1%. Adjusted EBITDA was also a record at $5.6 billion, at a margin of 48.3%1. We generated $4.4 billion of net cash from operating activities and $1.8 billion of free cash flow1 after investing $3.4 billion of gross capital expenditures in rental fleet.

Our year-end return on invested capital (ROIC) set a new high-water mark at 12.7%. This was an improvement of 240 basis points year-over- year. Our net leverage ratio was within our target range at 2.0x, and our liquidity was essentially unchanged year-over-year at a robust $2.9 billion.

Strong demand now and in the long-term

Our current operating landscape has picked up where 2022 left off: ongoing growth in non- residential construction activity, including in the industrial sector, and continued demand for our specialty solutions. The scale of the total opportunity is reflected in key industry indicators, including our customer confidence surveys, which indicate that contractors remain in expansion mode.

Longer-term, the outlook for our industry continues to be very favorable, driven by a number of tailwinds that we believe are largely independent of macro conditions. These include the secular shift toward renting equipment, the return of manufacturing to North America, investments in the energy and power sector and, notably, U.S. infrastructure spending and other government legislation.

We have a responsibility to step up our service to customers as their needs for equipment increase. Our expansive capacity and strong, people- centric culture are pillars of our growth strategy, and they receive our constant attention. In 2022, we grew our employee base by over 20% and strengthened the diversity of our organization. We also continued to invest in employee engagement and our best-in-class safety culture, with the result that the team delivered another excellent safety recordable rate for the year.

We made good progress with sustainability as well, including notable investments in zero- emission vehicles and rental fleet. Our goal is to reduce the greenhouse gas emissions intensity of our business by 35% by 2030, from 2018. In November, we deployed a new emissions tracking tool on our Total Control® platform to help our customers meet their own sustainability targets — this tool is an industry-first, and it furthers our differentiation as both a partner and an innovator.

Ultimately, we define success as operating in the best interests of our shareholders while also providing superior customer service at scale. We do this through operational excellence and a balanced capital allocation strategy that provides multiple levers we use to adjust for operating conditions, including acquisitions and organic expansion, fleet size and mix, and technology developments.

While it’s important to have this flexibility, we also have a durable business model that allows us to leverage our strengths. In January of this year, it was gratifying to announce the reactivation of our share repurchase program and the initiation of a quarterly dividend program. These two decisions will return a total $1.4 billion of capital to holders of our common stock this year.


Based on our continued momentum, we issued 2023 guidance that reflects our expectations for total revenue of $13.7 billion to $14.2 billion, and adjusted EBITDA of $6.6 billion to $6.85 billion. Our outlook anticipates net rental capex of $2.0 billion to $2.25 billion, after a gross capex investment of $3.3 billion to $3.55 billion in fleet. We expect to generate net cash from operating activities of $4.4 billion to $4.8 billion, and free cash flow of $2.1 billion to $2.35 billion.

As our company officially enters its next quarter century in business, we’re proud of the legacy Team United has already established — financial, operational and cultural leadership underscored by a determination to always do better. We’ll continue to convert strong growth into compelling returns for our investors as we explore every avenue for value creation.

March 22, 2023

Matthew J. Flannery
Chief Executive Officer

Michael J. Kneeland
Chair of the Board