SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934 (No Fee Required)
For the fiscal year ended December 31, 2001
OR
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No Fee Required)
For the transition period from ___ to ___
Commission file number 1-14387
A. Full title of the plan and address of the plan, if different from that of
the issuer named below: United Rentals, Inc. 401(k) Investment Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
United Rentals, Inc.
Five Greenwich Office Park
Greenwich, Connecticut 06830
REQUIRED INFORMATION
United Rentals, Inc. 401(k) Investment Plan
Audited Financial Statements
and Supplemental Schedule
December 31, 2001 and 2000
Contents
Report of Independent Auditors ............................................... 1
Audited Financial Statements
Statements of Net Assets Available for Benefits .............................. 2
Statements of Changes in Net Assets Available for Benefits ................... 3
Notes to Financial Statements ................................................ 4
Supplemental Schedule
Schedule H, Line 4 (i)--Schedule of Assets (Held at End of Year) ............. 9
Report of Independent Auditors
To Participants and Administrator of
United Rentals, Inc. 401(k) Investment Plan
We have audited the accompanying statements of net assets available for benefits
of United Rentals, Inc. 401(k) Investment Plan as of December 31, 2001 and 2000,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
June 25, 2002
1
United Rentals, Inc. 401(k) Investment Plan
Statements of Net Assets Available for Benefits
December 31
2001 2000
------------------------------------
Assets:
Cash $ 4,943 $ 599
Investments, at fair value:
T. Rowe Price Equity Index Trust 9,950,897 9,401,243
T. Rowe Price Tradelink Investments 57,327 39,925
United Rentals, Inc. Common Stock 8,370,205 4,469,690
Mutual Funds:
T. Rowe Price Spectrum Bond Income Fund 4,212,799 3,272,995
T. Rowe Price Balanced Fund 1,160,855 647,140
T. Rowe Price Blue Chip Growth Fund 5,600,185 4,229,716
T. Rowe Price Growth and Income Fund 1,529,057 686,385
T. Rowe Price International Stock Fund 3,104,652 3,125,539
T. Rowe Price New Horizons Fund 6,240,989 4,863,496
T. Rowe Price Prime Reserve Fund 13,092,869 9,666,912
T. Rowe Price Science & Technology Fund 2,196,409 1,684,928
T. Rowe Price Value Fund 6,444,838 4,268,483
------------------------------------
Total mutual funds 43,582,653 32,445,594
Participant loans 2,834,335 1,593,192
Contribution receivables:
Participants 189,898 356,559
Company 71,294 102,623
------------------------------------
Total receivables 261,192 459,182
------------------------------------
Net assets available for benefits $65,061,552 $48,409,425
====================================
See accompanying notes.
2
United Rentals, Inc. 401(k) Investment Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
2001 2000
------------------------------------------
Additions
Contributions:
Participants $17,096,518 $17,525,149
Company 4,871,949 5,789,089
Rollovers 2,257,959 7,591,318
Investment income:
Interest and dividend income 1,471,205 2,089,956
Net depreciation in fair value of investments (735,907) (6,237,847)
------------------------------------------
24,961,724 26,757,665
Deductions
Benefits paid directly to participants 8,264,659 4,041,879
Other, net 44,938 78,324
------------------------------------------
Net increase 16,652,127 22,637,462
Net assets available for benefits, beginning of year 48,409,425 25,771,963
------------------------------------------
Net assets available for benefits, end of year $65,061,552 $48,409,425
==========================================
See accompanying notes.
3
United Rentals, Inc. 401(k) Investment Plan
Notes to Financial Statements
December 31, 2001
1. Description of the Plan
The following description of the United Rentals, Inc. 401(k) Investment Plan
(the "Plan") provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan, which was established by United
Rentals, Inc. (the "Company"). All employees of the Company were eligible to
participate in the Plan on the first day of the month following completion of
six months of employment through March 1, 2001 (provided they have reached the
minimum age of 21 years). Effective March 1, 2001, the Plan was amended so that
all employees are eligible to participate in the Plan following completion of
twelve months of employment (provided they have reached the minimum age of 21
years). The Plan has been designed to allow tax deferred contributions by the
participants with discretionary Company contributions. The Plan is subject to
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Participants may elect to contribute up to 15% of their annual wages paid by the
Company, limited to $10,500 per annum in 2001 and 2000, respectively.
Participants can suspend their contributions at any time and still remain in the
Plan. Participants can resume contributions and change their elected
contribution rate at any time.
The Company may contribute a discretionary amount to the Plan, which is
determined annually by the Board of Directors of the Company. During the years
ended December 31, 2001 and 2000, the Company contributed 50% of the first 6% of
each participant's compensation up to a maximum contribution of $1,500.
Participant Accounts
Each participant account is credited with the participant's contribution, the
Company's discretionary contribution, if any, and an allocation of Plan
earnings. Allocations are based on the account balance of the participants.
4
United Rentals, Inc. 401(k) Investment Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are always 100% vested in their contributions plus actual earnings
thereon. Company contributions plus actual earnings thereon begin vesting 20%
per year after one year of service and are 100% vested after five years of
service (365 days minimum service per year). Forfeitures of Company
contributions, which aggregated $703,135 for 2001 and $404,662 for 2000, are
applied to reduce future Company contributions or to pay for Plan administrative
expenses.
Investment Options
Participants may direct their elective contributions and the related Company
discretionary contributions into any of the Plan's investment options. From
January 1 to April 30, 2000 all investment options were through the Plan's
trustee, Merrill Lynch and Company. Effective May 1, 2000, the Plan changed its
trustee to T. Rowe Price Trust Company.
Participants Loans
Participants may borrow from their vested balances in the Plan, subject to
certain restrictions and limitations set forth in the Plan document and the
Internal Revenue Code. Loan terms range from one to five years for personal
loans and up to a reasonable period of time as established by the Plan
Administrator for the purchase of a primary residence. The loans are secured by
the vested balance in the participant's account and bear interest at a rate
determined by the Plan Administrator. Interest rates range from 7.00% to 10.50%.
Principal and interest are paid ratably through payroll deductions.
Distributions and Withdrawals
A participant may not make withdrawals from their account prior to attaining age
59 1/2, except in the event of retirement, termination of employment or proven
hardship. Hardship withdrawals must be authorized by the Plan Administrator and
are subject to the requirements and limitations set forth in the Plan document,
the Internal Revenue Code and the regulations thereunder.
5
United Rentals, Inc. 401(k) Investment Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and terminate the
Plan subject to the provision of ERISA. In the event that the Plan is
terminated, the participants will become 100% vested in their accounts.
Administrative Expenses
Substantially all of the Plan's administrative expenses are paid by the Company.
All investment related expenses are charged directly to the participants'
accounts.
2. Summary of Significant Accounting Policies
Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting.
Investments
The Plan's investments are stated at fair value. Participant loans are valued at
their outstanding principal balances, which approximate fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Income Tax Status
The Plan has applied for but has not received a determination letter from the
Internal Revenue Service stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code. The Plan Administrator believes that the Plan is
qualified and, therefore, the related trust is exempt from taxation. The Company
has indicated that it will take the necessary steps, if any, to maintain the
Plan's qualified status.
6
United Rentals, Inc. 401(k) Investment Plan
Notes to Financial Statements (continued)
4. Investments
Individual investments that represent 5% or more of the Plan's net assets
available for benefits are as follows:
December 31
2001 2000
------------------------------------
T. Rowe Price Equity Index Trust $ 9,950,897 $9,401,243
T. Rowe Price Spectrum Bond Income Fund 4,212,799 3,272,995
T. Rowe Price Blue Chip Growth Fund 5,600,185 4,229,716
T. Rowe Price International Stock Fund - 3,125,539
T. Rowe Price New Horizons Fund 6,240,989 4,863,496
T. Rowe Price Prime Reserve Fund 13,092,869 9,666,912
T. Rowe Price Value Fund 6,444,838 4,268,483
United Rentals, Inc. Common Stock 8,370,205 4,469,690
For the year ended December 31, 2001, net appreciation (depreciation) by
investment was as follows:
T. Rowe Price Equity Index Trust $ (978,997)
T. Rowe Price Value Fund (137,890)
T. Rowe Price International Stock Fund (708,817)
T. Rowe Price New Horizons Fund (63,463)
T. Rowe Price Growth and Income Fund (45,423)
T. Rowe Price Science and Technology Fund (707,203)
T. Rowe Price Balanced Fund (59,154)
T. Rowe Price Spectrum Bond Income Fund (64,673)
T. Rowe Price Blue Chip Growth (485,567)
United Rentals, Inc. Common Stock 2,515,280
------------------
$ (735,907)
==================
For the year ended December 31, 2000, T. Rowe Price Trust Company, the Plan's
trustee, was unable to provide net appreciation (depreciation) by investment
type.
7
United Rentals, Inc. 401(k) Investment Plan
EIN: 06-1493538
Plan #: 001
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
Description of Investment,
Identity of Issue, Borrower, Including Maturity Date, Rate Shares/ Current
Lessor or Similar Party of Interest, Par or Maturity Value Units Value
----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Trust Company* Spectrum Bond Income Fund 397,434 $ 4,212,799
Balanced Fund 66,373 1,160,855
Blue Chip Growth Fund 193,310 5,600,185
Growth and Income Fund 67,005 1,529,057
International Stock Fund 282,498 3,104,652
New Horizons Fund 275,784 6,240,989
Prime Reserve Fund 13,092,869 13,092,869
Science & Technology Fund 104,901 2,196,409
Value Fund 341,358 6,444,838
Equity Index Trust 322,767 9,950,897
T. Rowe Price Tradelink Investments
(see detail of investments in the Tradelink
Investments on page 9) 57,327
United Rentals, Inc. Common Stock* 368,731 8,370,205
------------------
61,961,082
Participant loans* Interest rates range from 7.00% to 10.5%;
maturities range from 5 to 10 years 2,834,335
------------------
$64,795,417
==================
* Indicates party-in-interest to the Plan.
Note: The "cost" column is not applicable because all of the Plan's investment
options are participant directed.
8
United Rentals, Inc. 401(k) Investment Plan
EIN: 06-1493538
Plan #: 001
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
December 31, 2001
Description of Investment,
Identity of Issue, Borrower, Including Maturity Date, Rate Shares/ Current
Lessor or Similar Party of Interest, Par or Maturity Value Units Value
--------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Trust Company* Tradelink Investments:
Stocks:
AT&T Corp. 201 $ 3,650
AT&T Wireless Services 64 920
Ames Department Stores, Inc. 200 48
Bradley Pharmaceuticals, Inc. 100 2,069
Cisco Systems, Inc. 52 942
Cooper Industries 50 1,746
DSL.Net, Inc. 2,000 2,440
JDS Uniphase Corp. 75 650
Lockheed Martin Corp. 9 420
Lucent Technologies, Inc. 50 316
Mercator Software Ltd. 200 1,672
Nortel Networks Corp. 75 560
Oak Technology, Inc. 150 2,063
PetroQuest Energy, Inc. 260 1,383
Priceline.com, Inc. 200 1,166
Sonus Pharmaceuticals, Inc. 91 735
Syms Corp. 500 2,840
Target Corp. 68 2,804
21st Century 10,000 280
United-Guardian, Inc. 200 1,040
Weblink Wireless, Inc. 100 5
Mutual Funds:
Credit Suisse (formerly Warburg Pincus)
178 3,188
Gabelli Growth Fund 180 5,167
Oakmark Select Fund 126 3,440
T. Rowe Price Prime Reserve Fund 17,783 17,783
------------------
$57,327
==================
* Indicates party-in-interest to the Plan.
9
EXHIBITS
23 Consent of Ernst & Young LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
United Rentals, Inc. 401(k)
Investment Plan
Date: June 27, 2002 By: /s/ MICHAEL J. NOLAN
--------------------- --------------------------
Name: Michael J. Nolan
Title: Chief Financial Officer
10