United Rentals Announces First Quarter 2009 Results

GREENWICH, Conn.--(Business Wire)--
United Rentals, Inc. (NYSE: URI) today announced financial results for the first
quarter 2009. Total revenue was $594 million and rental revenue was $448
million, compared with $772 million and $578 million, respectively, for the same
period last year. Operating income was $18 million for the quarter, compared
with $102 million for the same period last year.

On a GAAP basis, the company reported a first quarter 2009 net loss of $19
million, or $0.32 per diluted share, compared with net income of $38 million, or
$0.34 earnings per diluted share, for the same period in 2008. Adjusted EPS,
which excludes the impact of a $3 million after-tax restructuring charge related
to branch closures and severance, was a loss of $0.28 per diluted share,
compared with earnings of $0.36 per diluted share for the prior year, excluding
the impact of a $2 million after-tax restructuring charge. Adjusted EBITDA
margin, which also excludes the impact of the restructuring charges, was 24.4%
for the first quarter, compared with 29.7% in 2008. The decline in profitability
reflects continued weakness in non-residential construction, partially offset by
the savings realized from the company`s ongoing cost-cutting measures.

First Quarter 2009 Highlights

* Total debt was reduced by $113 million during the quarter, including $22
million related to the repurchase of outstanding senior notes.
* Free cash flow was $129 million, compared with $143 million for the same
period last year. The year-over-year decline in free cash flow reflects lower
profitability, partially offset by the favorable impact of lower purchases of
rental equipment. As previously stated, the company expects to generate
approximately $300 million of free cash flow for full-year 2009.
* SG&A expense decreased by $21 million, compared to the first quarter last
year. The company expects to reduce full year SG&A expense by $50 million to $60
million, as compared to its previous estimate of $40 million to $50 million.
* A first quarter record $1.3 billion of rental equipment (original equipment
cost) was transferred among branches, in line with the company`s fleet
management strategy.
* 10 branches were closed or consolidated in the quarter, and headcount was
reduced by approximately 500.
* Time utilization decreased 2.4 percentage points to 56.1%, and rental rates
declined 11.5%, compared with the first quarter last year.
* Contractor supplies gross margin improved year-over-year by 6.7 percentage
points to 28.1%.

CEO Comments

Michael Kneeland, chief executive officer of United Rentals, said, "Weak
construction markets and intense pressure on rates constrained both our top line
and our gross margin throughout the first quarter. While the decline has yet to
run its course, there are many actions we are taking to mitigate its impact. We
took another $21 million of SG&A expense out of the business in the quarter,
further reduced our headcount by 5%, closed or consolidated 10 of our least
profitable branches, continued to defleet, and accelerated our pursuit of
National Account customers. We plan to close an additional 39 branches in the
second quarter, further evidence of the levers at our disposal."

Mr. Kneeland continued, "Given the depth and the potential duration of the
downturn, liquidity is of paramount importance to our plan. We are maintaining
our earlier estimate of $300 million of free cash flow this year. In the first
quarter, we generated $129 million of free cash flow and made prudent use of it
by reducing our debt by $113 million. As a result, we improved both our
liquidity and capital structure. Proceeds from the sale of used equipment
exceeded rental capex spent in the quarter by $15 million, and we now expect net
rental capex for the year to be near zero. We will continue to manage our
business in a way that is consistent with our long-term vision."

Free Cash Flow and Fleet Size

For the first quarter 2009, free cash flow was $129 million after total rental
and non-rental capital expenditures of $64 million, compared with free cash flow
of $143 million after total rental and non-rental capital expenditures of $151
million for the same period last year.

The size of the rental fleet, as measured by the original equipment cost, was
$4.0 billion and the age of the rental fleet was 40 months at March 31, 2009,
compared with $4.1 billion and 39 months at December 31, 2008.

Return on Invested Capital (ROIC)

Return on invested capital was 6.6% for the 12 months ended March 31, 2009, a
decrease of 2.4 percentage points from the same period last year. The company`s
ROIC metric uses after-tax operating income for the trailing 12 months divided
by the averages of stockholders` equity, debt and deferred taxes, net of average
cash.

Second Quarter Restructuring and Asset Impairment Charge

The company announced that it expects to record a charge in the second quarter
2009 of between $25 million and $30 million principally related to the planned
closure of 39 branches. The charge is expected to include a non-cash component
of approximately $14 million related to the aggregate impact of impairing
certain rental assets and writing off leasehold improvements.

Conference Call

United Rentals will hold a conference call tomorrow, Thursday, April 30, 2009,
at 11:00 a.m. Eastern Time. The conference call will be available live by audio
webcast at unitedrentals.com, where it will be archived, and by calling
866-793-1344.

Non-GAAP Measures

Free cash flow, earnings before interest, taxes, depreciation and amortization
(EBITDA), adjusted EBITDA, and adjusted earnings per share (EPS) are non-GAAP
financial measures as defined under the rules of the SEC. Free cash flow
represents net cash provided by operating activities, less purchases of rental
and non-rental equipment plus proceeds from sales of rental and non-rental
equipment and excess tax benefits from share-based payment arrangements. EBITDA
represents the sum of (loss) income before (benefit) provision for income taxes,
interest expense, net, interest expense-subordinated convertible debentures,
depreciation-rental equipment, non-rental depreciation and amortization and
stock compensation expense. Adjusted EBITDA represents EBITDA plus the
restructuring charge. Adjusted EPS represents EPS plus the restructuring charge.
The company believes that: (i) free cash flow provides useful additional
information concerning cash flow available to meet future debt service
obligations and working capital requirements; and (ii) EBITDA and adjusted
EBITDA provide useful information about operating performance and
period-over-period growth and (iii) adjusted EPS provides useful information
concerning future profitability. However, none of these measures should be
considered as alternatives to net income, cash flows from operating activities
or earnings per share under GAAP as indicators of operating performance or
liquidity. Information reconciling forward-looking free cash flow to a GAAP
financial measure is unavailable to the company without unreasonable effort.

About United Rentals

United Rentals, Inc. is the largest equipment rental company in the world, with
an integrated network of over 615 rental locations in 48 states, 10 Canadian
provinces and Mexico. The company`s approximately 9,400 employees serve
construction and industrial customers, utilities, municipalities, homeowners and
others. The company offers for rent approximately 2,800 classes of equipment
with a total original cost of $4.0 billion. United Rentals is a member of the
Standard & Poor`s MidCap 400 Index and the Russell 2000 Index and is
headquartered in Greenwich, Conn. Additional information about United Rentals is
available at unitedrentals.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements within
the meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements can generally be identified by words such
as "believes," "expects," "plans," "intends," "projects," "forecasts," "may,"
"will," "should," "seek," "on track" or "anticipates," or the negative thereof
or comparable terminology, or by discussions of vision, strategy or outlook. Our
businesses and operations are subject to a variety of risks and uncertainties,
many of which are beyond our control, and, consequently, actual results may
differ materially from those projected by any forward-looking statements.
Factors that could cause actual results to differ materially from those
projected include, but are not limited to, the following: (1) the depth and
duration of the current economic downturn and accompanying decreases in North
American construction and industrial activities, which have significantly
affected revenues and, because many of our costs are fixed, our profitability,
and which may further reduce demand and prices for our products and services;
(2) our highly leveraged capital structure, which requires us to use a
substantial portion of our cash flow for debt service and can constrain our
flexibility in responding to unanticipated or adverse business conditions; (3)
noncompliance with financial or other covenants in our debt agreements, which
could result in our lenders terminating our credit facilities and requiring us
to repay outstanding borrowings; (4) inability to access the capital that our
businesses or growth plans may require; (5) increases in our maintenance and
replacement costs as we age our fleet, and decreases in the residual value of
our equipment; (6) inability to sell our used fleet in the amounts, or at the
prices, we expect; (7) rates we can charge and time utilization we can achieve
being less than anticipated; and (8) costs we incur being more than anticipated,
and the inability to realize expected savings in the amounts or time frames
planned. For a fuller description of these and other possible uncertainties,
please refer to our Annual Report on Form 10-K for the year ended December 31,
2008, as well as to our subsequent filings with the SEC. Our forward-looking
statements contained herein speak only as of the date hereof, and we make no
commitment to update or publicly release any revisions to forward-looking
statements in order to reflect new information or subsequent events,
circumstances or changes in expectations.

UNITED RENTALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)

Three Months Ended
March 31,
2009 2008 % Change

Revenues:
Equipment rentals $ 448 $ 578 (22.5 %)
Sales of rental equipment 67 66 1.5 %
New equipment sales 23 42 (45.2 %)
Contractor supplies sales 32 56 (42.9 %)
Service and other revenues 24 30 (20.0 %)
Total revenues 594 772 (23.1 %)
Cost of revenues:
Cost of equipment rentals, excluding depreciation 233 276 (15.6 %)
Depreciation of rental equipment 106 108 (1.9 %)
Cost of rental equipment sales 59 49 20.4 %
Cost of new equipment sales 20 34 (41.2 %)
Cost of contractor supplies sales 23 44 (47.7 %)
Cost of service and other revenues 9 12 (25.0 %)
Total cost of revenues 450 523 (14.0 %)
Gross profit 144 249 (42.2 %)
Selling, general and administrative expenses 108 129 (16.3 %)
Restructuring charge 4 3 33.3 %
Non-rental depreciation and amortization 14 15 (6.7 %)
Operating income 18 102 (82.4 %)
Interest expense, net 50 41 22.0 %
Interest expense - subordinated convertible debentures 2 2
Other income, net (1 ) -
(Loss) income before (benefit) provision for
income taxes (33 ) 59
(Benefit) provision for income taxes (14 ) 21
Net (loss) income (19 ) 38

Diluted (loss) earnings per share $ (0.32 ) $ 0.34

UNITED RENTALS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)

March 31, December 31,
2009 2008
ASSETS
Cash and cash equivalents $ 96 $ 77
Accounts receivable, net 359 454
Inventory 59 59
Prepaid expenses and other assets 33 37
Deferred taxes 75 76
Total current assets 622 703

Rental equipment, net 2,620 2,746
Property and equipment, net 444 447
Goodwill and other intangible assets, net 229 229
Other long-term assets 62 66

Total assets $ 3,977 $ 4,191

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current maturities of long-term debt $ 11 $ 13
Accounts payable 154 157
Accrued expenses and other liabilities 191 257
Total current liabilities 356 427

Long-term debt 3,075 3,186
Subordinated convertible debentures 146 146
Deferred taxes 410 414
Other long-term liabilities 46 47
Total liabilities 4,033 4,220

Common stock 1 1
Additional paid-in capital 467 466
Accumulated deficit (531 ) (512 )
Accumulated other comprehensive income 7 16
Total stockholders' deficit (56 ) (29 )

Total liabilities and stockholders' deficit $ 3,977 $ 4,191

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

Three Months Ended
March 31,
2009 2008
Cash Flows From Operating Activities:
Net (loss) income $ (19 ) $ 38
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
Depreciation and amortization 120 123
Amortization and write-off of deferred financing and related costs 4 2
Gain on sales of rental equipment (8 ) (17 )
Gain on sales of non-rental equipment (1 ) -
Non-cash adjustments to equipment 4 1
Stock compensation expense, net 2 1
Gain on repurchase of high yield notes (4 ) -
(Decrease) increase in deferred taxes (3 ) 18
Changes in operating assets and liabilities:
Decrease in accounts receivable 93 65
Increase in inventory - (4 )
Decrease in prepaid expenses and other assets 4 2
(Decrease) increase in accounts payable (3 ) 81
Decrease in accrued expenses and other liabilities (65 ) (84 )
Net cash provided by operating activities 124 226

Cash Flows From Investing Activities:
Purchases of rental equipment (52 ) (136 )
Purchases of non-rental equipment (12 ) (15 )
Proceeds from sales of rental equipment 67 66
Proceeds from sales of non-rental equipment 3 2
Purchases of other companies (2 ) -
Net cash provided by (used in) investing activities 4 (83 )

Cash Flows From Financing Activities:
Proceeds from debt 2,564 -
Payments of debt (2,670 ) (7 )
Other (1 ) -

Net cash used in financing activities (107 ) (7 )

Effect of foreign exchange rates (2 ) (2 )

Net increase in cash and cash equivalents 19 134
Cash and cash equivalents at beginning of period 77 381

Cash and cash equivalents at end of period $ 96 $ 515

UNITED RENTALS, INC.
SEGMENT PERFORMANCE
($ in millions)

Three Months Ended
March 31,
2009 2008 % Change

General Rentals
Reportable segment revenue $ 558 $ 727 (23.2 %)
Reportable segment operating income 15 93 (83.9 %)
Reportable segment operating margin 2.7 % 12.8 % (10.1 pts)

Trench Safety, Pump and Power
Reportable segment revenue $ 36 $ 45 (20.0 %)
Reportable segment operating income 3 9 (66.7 %)
Reportable segment operating margin 8.3 % 20.0 % (11.7 pts)

Total United Rentals
Reportable segment revenue $ 594 $ 772 (23.1 %)
Reportable segment operating income 18 102 (82.4 %)
Reportable segment operating margin 3.0 % 13.2 % (10.2 pts)

DILUTED EARNINGS PER SHARE CALCULATION
(In millions, except per share data)

Three Months Ended
March 31,
2009 2008

Net (loss) income $ (19 ) $ 38
Convertible debt interest - -
Net (loss) income $ (19 ) $ 38

Weighted average common shares 60.0 86.3
Series C and D preferred stock - 17.0
Employee stock options and warrants - 0.6
Convertible shares - 6.5
Restricted stock units and other - 0.4
Total weighted-average diluted shares 60.0 110.8

Diluted (loss) earnings per share $ (0.32 ) $ 0.34

UNITED RENTALS, INC.

ADJUSTED (LOSS) EARNINGS PER SHARE RECONCILIATION

We define "adjusted (loss) earnings per share" as the sum of (i) diluted (loss)
earnings per share - GAAP, as reported, plus the after-tax impact of the
restructuring charge. Management believes adjusted (loss) earnings per share
provides useful information concerning future profitability. However, adjusted
(loss) earnings per share is not a measure of financial performance under GAAP.
Accordingly, adjusted (loss) earnings per share should not be considered an
alternative to GAAP (loss) earnings per share. The table below provides a
reconciliation between diluted (loss) earnings per share - GAAP, as reported and
diluted (loss) earnings per share - adjusted.

Three Months Ended
March 31,
2009 2008

Diluted (loss) earnings per share - GAAP, as reported $ (0.32 ) $ 0.34

After-tax impact of restructuring charge 0.04 $ 0.02

Diluted (loss) earnings per share - adjusted $ (0.28 ) $ 0.36

UNITED RENTALS, INC.

EBITDA AND ADJUSTED EBITDA GAAP RECONCILIATION

(In millions)

"EBITDA" represents the sum of (loss) income before (benefit) provision for
income taxes, interest expense, net, interest expense-subordinated convertible
debentures, depreciation-rental equipment, non-rental depreciation and
amortization and stock compensation expense. Adjusted EBITDA represents EBITDA
plus the restructuring charge. Management believes EBITDA and adjusted EBITDA
provide useful information about operating performance and period-over-period
growth. However, EBITDA and adjusted EBITDA are not measures of financial
performance or liquidity under GAAP and, accordingly, should not be considered
as alternatives to net income or cash flow from operating activities as
indicators of operating performance or liquidity. The table below provides a
reconciliation between (loss) income before (benefit) provision for income taxes
and EBITDA and adjusted EBITDA.

Three Months Ended
March 31,
2009 2008

(Loss) income before (benefit) provision for income taxes $ (33 ) $ 59
Interest expense, net 50 41
Interest expense - subordinated convertible debentures 2 2
Depreciation - rental equipment 106 108
Non-rental depreciation and amortization 14 15
Stock compensation expense 2 1
EBITDA (1) 141 226
Restructuring charge 4 3
Adjusted EBITDA (2) $ 145 $ 229

(1) Our EBITDA margin was 23.7% and 29.3% for the three months ended March 31, 2009
and 2008, respectively.

(2) Our adjusted EBITDA margin was 24.4% and 29.7% for the three months ended March
31, 2009 and 2008, respectively.

UNITED RENTALS, INC.

FREE CASH FLOW GAAP RECONCILIATION

(In millions)

We define "free cash flow" as (i) net cash provided by operating activities less
(ii) purchases of rental and non-rental equipment plus (iii) proceeds from sales
of rental and non-rental equipment and (iv) excess tax benefits from share-based
payment arrangements. Management believes free cash flow provides useful
additional information concerning cash flow available to meet future debt
service obligations and working capital requirements. However, free cash flow is
not a measure of financial performance or liquidity under GAAP. Accordingly,
free cash flow should not be considered an alternative to net income or cash
flow from operating activities as an indicator of operating performance or
liquidity. The table below provides a reconciliation between net cash provided
by operating activities and free cash flow.

Three Months Ended
March 31,
2009 2008

Net cash provided by operating activities $ 124 $ 226
Purchases of rental equipment (52 ) (136 )
Purchases of non-rental equipment (12 ) (15 )
Proceeds from sales of rental equipment 67 66
Proceeds from sales of non-rental equipment 3 2
Excess tax benefits from share-based payment arrangements (1 ) -
Free Cash Flow $ 129 $ 143

United Rentals, Inc.
Fred Bratman, 203-618-7318
Cell: 917-847-4507
fbratman@ur.com

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