United Rentals Announces First Quarter 2008 Results and Revises Full Year Outlook

Business Wire, April 29, 2008

GREENWICH, Conn. -- United Rentals, Inc. (NYSE: URI) today announced first quarter 2008 continuing operations diluted earnings per share of $0.34, an increase of 13.3% compared with $0.30 for the first quarter 2007. Income from continuing operations for the first quarter 2008 increased 18.8% to $38 million from $32 million for the first quarter 2007, reflecting the beneficial impact of the company's renewed focus on its core rental business and ongoing initiatives to reduce operating costs.

Rental revenue was $571 million and total revenue was $772 million for the first quarter 2008, compared with $567 million and $838 million, respectively, for the same period last year. The increase in rental revenue and decrease in total revenue are consistent with the company's previously announced plan to refocus on its core business of equipment rental.

First Quarter 2008 Financial Highlights Compared with First Quarter 2007

* EBITDA improved $11 million to $224 million and EBITDA margin improved 3.6 percentage points to 29.0%. EBITDA is a non-GAAP measure.

* SG&A expense as a percent of revenue improved 0.5 percentage points to 17.0% of revenue.

* Operating income margin improved 1.4 percentage points to 13.2% of revenue.

* Time utilization, on a larger fleet, increased 0.7 percentage points, offsetting a rental rate decline of 0.6%.

Free cash flow for the first quarter 2008 improved significantly to $143 million after total rental and non-rental capital expenditures of $151 million, compared with negative free cash flow of $83 million after total rental and non-rental capital expenditures of $296 million for the same period last year. The year-over-year change in free cash flow was largely the result of a decrease in rental and non-rental capital expenditures and reduced working capital employed in 2008 compared with 2007. Free cash flow is a non-GAAP measure.

The size of the rental fleet, measured by the original equipment cost, was $4.2 billion and the average age of the fleet was 39 months at March 31, 2008, compared with $4.2 billion and 38 months at year-end 2007 and $4.0 billion and 38 months at March 31, 2007.

Full Year 2008 Outlook

Based on current utilization trends and considering recent industry forecasts for spending in its primary end markets, the company revised its full year 2008 outlook for earnings per share to a range of $2.65 to $2.85. The revised outlook anticipates total revenue of $3.4 billion to $3.5 billion, EBITDA of $1.15 billion to $1.19 billion, and $400 million to $450 million of free cash flow after total capital expenditures of approximately $715 million.

CEO Comments

Michael Kneeland, chief executive officer for United Rentals, said, "Our increased emphasis on equipment rental and cost containment is directly responsible for the record first quarter earnings and EBITDA that we reported today. We are committed to pursuing profitable rental volume, with the result that our employees were successful in increasing both rental revenue and time utilization for the quarter despite the challenges faced in some of our end markets. In addition, we continued to target excess costs and reduced our SG&A expense by $16 million compared with last year. Our focus remains on making systemic improvements that will enable us to generate value in any external environment."

Mr. Kneeland continued, "We expect that the disciplined execution of our strategy will continue to benefit our 2008 results. Nevertheless, we concur with many construction industry experts and the experience of our own customers who see a slowdown in construction starts. This will constrain the demand for equipment as the year progresses. In light of the current operating environment, we have made a modest revision to our outlook. The board continues to review alternatives for enhancing shareholder value, taking account of the environment, our cash flow, capital structure and covenants."

Return on Invested Capital (ROIC)

Return on invested capital was 14.3% for the twelve months ended March 31, 2008, flat as compared with the same period last year. The company's ROIC metric uses operating income for the trailing twelve months divided by the averages of stockholders' equity, debt and deferred taxes, net of average cash. The company reports ROIC to provide information on its efficiency and effectiveness in deploying capital and improving shareholder value.

Additional Information on First Quarter 2008 Results and Status of SEC Inquiry

For additional information concerning the company's first quarter 2008 results, including segment performance for its general rentals and trench safety, pump and power businesses, as well as the status of the previously announced SEC inquiry of the company and related matters, please see the company's first quarter 2008 Form 10-Q filed today with the SEC.

Conference Call

United Rentals will hold a conference call tomorrow, Wednesday, April 30th, at 11 a.m. Eastern Time. The conference will be available live by audio webcast at unitedrentals.com, where it will be archived. The conference call is available by calling (703) 639-1365.