United Rentals Experiences Strong Third Quarter

November 1, 2006 • United Rentals, Inc., Greenwich, Conn., announced record results for third quarter 2006. Highlights from the quarter compared to the same quarter last year include a return on invested capital improvement of 2.3 percentage points to 13%, an operating income increase of 25% to $216 million, a rental rate increase of 5.1%, and a 23% increase of contractor supplies sales to $109 million. The size of the rental fleet, as measured by original equipment cost, was $4.1 billion, and the age of the rental fleet was 38 month as of Sept. 30, 2006, compared with $3.9 billion and 40 months at year-end 2005, and $4.0 billion and 39 months at Sept. 30, 2005.

 

The company reported a record third quarter 2006 diluted earning per share of $0.85. The diluted earning per share, which absorb charges of $.03 per diluted share related to two previously announce debt prepayments, represent an increase of 20% compared with $0.71 for the third quarter 2005.

 

United Rentals saw total revenues of $1.1 billion for the third quarter, which is an increase of 9.3% from the same quarter last year. Third quarter net income increased 25% to $95 million. United Rentals' same-store rental revenues increased 3.5% from the same quarter last year, and dollar utilization was essentially flat at 72.2%. Free cash flow, a non-GAAP measure, for the third quarter was $135 million after total capital expenditures of $192 million.

 

Continued strong performance in the quarter is attributed to a combination of improved rental rates and profit flow-through, according to Wayland Hicks, chief executive officer of United Rentals. “The investments we have been making to take advantage of the growth opportunities in our markets are paying off in the form of free cash flow generation, debt reduction, and return on invested capital improvement,” he said.

 

After absorbing the impact of the second and third quarter items, United Rentals is adjusting its outlook range for the full year 2006 for diluted earnings per share from $2.12 to $2.22 after absorbing the charges of $.03 per diluted share for the debt prepayments. Diluted earnings per share for 2005 were $1.80. The company expects to generate $3.95 billion in total revenues in 2006, and raised its outlook for free cash flow to $175 million after total capital expenditures of approximately $955 million.