United Rentals Narrows Range of Full Year 2008 Outlook
July 10 2008 - 5:00PM
Business Wire
United Rentals, Inc. (NYSE: URI) today narrowed its outlook range
for full year 2008 earnings per share to $2.65 to $2.75, which
maintains the low end of the company�s previously announced EPS
outlook range of $2.65 to $2.85. Total revenue guidance was
narrowed to $3.3 billion to $3.4 billion from $3.3 billion to $3.5
billion primarily due to lower than expected rental revenue. In
addition, the company narrowed its outlook for full year 2008
EBITDA to $1.15 billion to $1.17 billion from $1.15 billion to
$1.19 billion while maintaining its free cash flow outlook of $400
million to $450 million. In consideration of the anticipated
upcoming expiration of United Rentals� previously announced
�modified Dutch auction� tender offer, in which the company is
offering to purchase up to 27,160,000 shares of its common stock at
a price not less than $22.00 nor greater than $25.00 per share,
management believes it is appropriate to provide shareholders with
an update at this time. The company�s full year 2008 outlook noted
above excludes the impacts of the previously disclosed second
quarter charge of $14 million related to the ongoing SEC inquiry,
the company�s preferred stock repurchase completed on June 9, 2008,
and any share repurchases ultimately made pursuant to the above
referenced tender offer for common stock. Additionally, the company
expects to record aggregate charges of $6 million after-tax in the
second quarter, primarily related to the establishment of a
valuation allowance related to certain foreign tax credits. As
previously disclosed, the company expects that the preferred stock
repurchase referred to above will require recording a one time
charge in the second quarter of approximately $240 million as a
reduction of net income available to common stockholders. The
company estimates that the combined impact of the SEC inquiry
charge, foreign tax credit valuation allowance, and
recapitalization will reduce full year EBITDA by $14 million. On a
GAAP basis, the combined estimated impact of these items will
reduce full year earnings per share by approximately $2.50 per
share. These expectations are based on preliminary information and
are subject to change, pending completion of the company�s normal
quarterly close process and the completion of the tender offer. The
company expects to further update its full year 2008 outlook to
reflect the impact of these items upon the release of its second
quarter 2008 results on or about July 29, 2008. As previously
stated, the company believes that the completed and planned share
repurchases, excluding the one-time charges noted above, represent
an opportunity to capture immediate and meaningful earnings per
share accretion. About United Rentals United Rentals, Inc. is the
largest equipment rental company in the world, with an integrated
network of approximately 670 rental locations in 48 states, 10
Canadian provinces and Mexico. The company�s approximately 10,500
employees serve construction and industrial customers, utilities,
municipalities, homeowners and others. The company offers for rent
over 2,900 classes of rental equipment with a total original cost
of $4.3 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. These statements can generally be
identified by words such as "believes," "expects," "plans,"
"intends," "projects," "forecasts," "may," "will," "should," "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 from those projected include, but
are not limited to, the following: (1) weaker or unfavorable
economic or industry conditions can reduce demand and prices for
our products and services, (2) non-residential construction
spending, or governmental funding for infrastructure and other
construction projects, may not reach expected levels, (3) we may
not always have access to capital that our businesses or growth
plans may require, (4) any companies we acquire could have
undiscovered liabilities, may strain our management capabilities or
may be difficult to integrate, (5) rates we can charge and time
utilization we can achieve may be less than anticipated, (6) costs
we incur may be more than anticipated, including by having expected
savings not be realized in the amounts or time frames we have
planned, (7) competition in our industry for talented employees is
intense, which can affect our employee costs and retention rates,
(8) we have and expect to incur additional significant leverage in
connection with the announced and pending share repurchase
transactions, which leverage requires us to use a substantial
portion of our cash flow for debt service and will constrain our
flexibility in responding to unanticipated or adverse business
conditions, (9) we are subject to an ongoing inquiry by the SEC,
and there can be no assurance as to its outcome, or any other
potential consequences thereof for us, (10) we are subject to
purported class action lawsuits and derivative actions filed in
light of the SEC inquiry and additional purported class action
lawsuits relating to the terminated merger transaction with
Cerberus affiliates, and there can be no assurance as to their
outcome or any other potential consequences thereof for us, and
(11) we may incur additional significant costs and expenses
(including indemnification obligations) in connection with the SEC
inquiry, the purported class action lawsuits and derivative actions
referenced above, the U.S. Attorney's Office inquiry, or other
litigation, regulatory or investigatory matters, related to the
foregoing or otherwise. 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, 2007, 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.
Non-GAAP Measures Free cash flow and EBITDA 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
income from continuing operations before provision for income
taxes, interest expense, net, interest expense-subordinated
convertible debentures, depreciation-rental equipment and
non-rental depreciation and amortization. The company believes that
free cash flow provides useful additional information concerning
cash flow available to meet future debt service obligations and
working capital requirements and EBITDA provides an enhanced
perspective of our operating performance. However, neither of these
measures should be considered an alternative to net income or cash
flows from operating activities under GAAP as indicators of
operating performance or liquidity. Information reconciling
forward-looking free cash flow and EBITDA expectations to a GAAP
financial measure is unavailable to the company without
unreasonable effort.
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