United Rentals Announces Preliminary Second Quarter 2005 Earnings and Reaffirms 2005 Outlook

Preliminary Second Quarter 2005 Financial Highlights

For the second quarter 2005 compared with last year's secondquarter:

-- Total revenues increased 15.5% to $896 million.

-- Same-store rental revenues increased 11.4%.

-- Contractor supplies sales increased 48% to $85 million.

-- Dollar utilization was 64.8%, an increase of 4.7 percentage points.

-- Rental rates for the general rentals segment increased 5.2%.

Second Quarter and First Half 2005 Selected Business andPreliminary Financial Data

As previously announced, the company has delayed reporting finalresults for 2004 and will delay finalizing results for 2005 interimperiods until after it reports 2004 results. Accordingly, the companywill delay filing its second quarter Form 10-Q beyond the due date andthe five-day extension period. The earnings, financial highlights,other selected financial data and 2005 outlook provided in this pressrelease are preliminary and subject to change based on completion ofthe 2004 audit or the outcome of the previously announced SEC inquiryand the related internal review. This data should not be viewed as asubstitute for full financial statements.

Total revenues for the second quarter of 2005 were $896 million,an increase of 15.5% compared with $776 million for the same periodlast year. The size of the rental fleet, as measured by the originalequipment cost, was $3.9 billion and the age of the rental fleet was39 months at June 30, 2005, compared with $3.7 billion and 40 monthsat year-end 2004.

Total revenues for the first six months of 2005 were $1.63billion, an increase of 14.6% compared with $1.42 billion for thefirst six months of 2004. Cash flow from operations was $356 millionduring the first half of 2005 compared with $359 million during the2004 period. Cash flow from operations during the first half of 2005was essentially the same as in the first half of 2004 due primarily tothe impact of lower cash generated from working capital in 2005.

Purchases of rental equipment were $482 million in the first halfof 2005 compared with $322 million in the first half of 2004. Freecash flow during the first half of 2005 was negative $21 millioncompared with free cash flow generation of $110 million during thefirst half of 2004. The decline in free cash flow was largely theresult of the $160 million increase in rental fleet investment. Thetotal cash balance was $254 million at June 30, 2005, a decrease of$48 million from year-end 2004.

General Rentals Segment

Second quarter 2005 revenues for general rentals were $823million, an increase of 16.0% compared with $709 million for thesecond quarter of 2004. Rental rates for the second quarter increased5.2% and same-store rental revenues increased 11.3% from the secondquarter of 2004.

First half 2005 revenues for general rentals were $1.51 billion,an increase of 15.4% compared with $1.31 billion for the first half of2004. Rental rates for the first half increased 7.1% and same-storerental revenues increased 11.2% from the first half of 2004.

General rentals segment revenues represented 93% of total revenuesin the first six months of 2005.

Traffic Control Segment

Second quarter 2005 revenues for traffic control were $73 million,an increase of 10.2% compared with $67 million for the second quarterof 2004. Same-store rental revenues for the second quarter increased12.6% from the second quarter of 2004.

First half 2005 revenues for traffic control were $117 million, anincrease of 4.7% compared with $112 million for the first half of2004. Same-store rental revenues for the first half increased 6.3%from the first half of 2004.

CEO Comments and Outlook

Wayland Hicks, chief executive officer, said, "Our strongperformance this quarter reflects our success in continuing to improverental rates, while at the same time expanding our rental fleet andincreasing time utilization.

"To drive future growth, we are opening new branches in attractivemarkets. We expect to open 30 to 35 new branches in 2005, includingthe 18 we've already opened. These branches will increase our presencein existing markets and expand our footprint into new areas.

"We are also continuing to grow our sales of contractor suppliesat a rapid pace. These sales were up 48% compared with last year'ssecond quarter, and we have opened eight regional distribution centersto support future growth.

"The significant investment we are making in our branch networkand our rental fleet should allow us to capitalize on the continuedimprovement in private non-residential construction spending. Firsthalf spending rose 5.9% year-over-year according to Department ofCommerce data."

Hicks concluded, "We are working diligently to finalize ourresults as soon as possible. In the meantime, our organization iscontinuing to focus on providing superior customer service and growingthe business. For the full year 2005, we are on track to achieve totalrevenues of $3.4 billion, diluted earnings per share of $1.60 to $1.70and free cash flow of at least $200 million."

Update on Restatements for Prior Periods

Self-Insurance Reserve Restatement

The company previously announced that it expects to restate itsfinancial statements for the years 2000 through 2003 and the firstnine months of 2004 to correct the expense associated with itsself-insurance reserve. This expense was too high in 2004 and 2003 andtoo low in 2002 and prior years. The company has concluded that thereserve level at year-end 2004 is appropriate.

Income Tax Restatement

The company previously announced that it expects to restate itsfinancial statements for years prior to 2004 to correct the provisionfor income taxes. While the analysis is not yet complete, the companycontinues to believe that this restatement is likely to decrease theaggregate income tax expense for periods prior to 2004, although theexpense in particular periods could increase. The company alsocontinues to believe that this restatement will not impact 2004.Further analysis is required to confirm these conclusions.

Status of Special Committee Review Relating to PreviouslyDisclosed SEC Inquiry

The special committee of independent directors of the company'sboard of directors is continuing to review matters relating to the SECinquiry. As previously stated, this inquiry appears to relate to abroad range of the company's accounting practices and is not confinedto a specific period.

As previously reported, the matters being reviewed by the specialcommittee include several short-term equipment sale-leasebacktransactions that occurred in 2000, 2001 and 2002. The specialcommittee review of these transactions, as well as its broader reviewrelating to the SEC inquiry, is ongoing and no final conclusions havebeen reached. However, as previously reported, the committee hasinformation that suggests that the accounting for at least some ofthese sale-leaseback transactions was incorrect. The company reportedaggregate gross profit from these transactions of $12.5 million, $20.2million and $1.5 million in 2000, 2001 and 2002, respectively.

Status of 2004 Results

As previously disclosed, the company has delayed finalizing its2004 results in order to review matters relating to the SEC inquiryand complete the self-insurance and income tax restatements. Thecompany expects to finalize its results for the first and secondquarters of 2005 after it reports final results for 2004. The companywill also set its 2004 annual meeting date at that time.

Conference Call

United Rentals will hold a conference call today, Tuesday, August9th, at 11 a.m. Eastern Time. The conference will be available live byaudio webcast at unitedrentals.com, where it will be archived.

About United Rentals

United Rentals, Inc. is the largest equipment rental company inthe world, with an integrated network of more than 730 rentallocations in 48 states, 10 Canadian provinces and Mexico. Thecompany's 13,200 employees serve construction and industrialcustomers, utilities, municipalities, homeowners and others. Thecompany offers for rent over 600 different types of equipment with atotal original cost of $3.9 billion. United Rentals is a member of theStandard & Poor's MidCap 400 Index and the Russell 2000 Index(R) andis headquartered in Greenwich, Connecticut. Additional informationabout United Rentals is available at unitedrentals.com.

The company's results for 2004 and the second quarter and firsthalf of 2005 have not been finalized and, consequently, the resultsand other data for these periods are preliminary and subject tochange. Certain statements contained in this press release areforward-looking in nature. These statements can be identified by theuse of forward-looking terminology such as "believes," "expects,""plans," "intends," "projects," "forecasts," "may," "will," "should,""on track" or "anticipates" or the negative thereof or comparableterminology, or by discussions of strategy or outlook. The company'sbusiness and operations are subject to a variety of risks anduncertainties and, consequently, actual results may differ materiallyfrom those projected by any forward-looking statements. Factors thatcould cause actual results to differ from those projected include, butare not limited to, the following: (1) unfavorable economic andindustry conditions can reduce demand and prices for the company'sproducts and services, (2) governmental funding for highway and otherconstruction projects may not reach expected levels, (3) the companymay not have access to capital that it may require, (4) any companiesthat United Rentals acquires could have undiscovered liabilities andmay be difficult to integrate, (5) rates may increase less thananticipated or costs may increase more than anticipated, (6) the auditof the company's 2004 results has not yet been completed and,accordingly, previously announced data for 2004 are subject to change,(7) the evaluation and testing of the company's internal controls overfinancial reporting have not yet been completed and additionalmaterial weaknesses may be identified, (8) the company may incursignificant expenses in connection with the SEC inquiry of the companyand the class action lawsuits and derivative actions that were filedin light of the SEC inquiry, (9) there can be no assurance that theoutcome of the SEC inquiry or internal review will not require changesin the company's accounting policies and practices, restatement offinancial statements, revisions of preliminary results or guidance,and/or otherwise be adverse to the company, and (10) consents orwaivers from lenders may not be obtained or may be costly to obtain,or security holders may elect to declare an event of default undervarious indentures based on the company's delay in filing SEC reports.Certain of these risks and uncertainties, as well as others, arediscussed in greater detail in the company's filings with the SEC. Thecompany makes no commitment to revise or update any forward-lookingstatements in order to reflect events or circumstances after the dateany such statement is made.
UNITED RENTALS, INC.

FREE CASH FLOW GAAP RECONCILIATION

FIRST HALF 2005

We define "free cash flow" as (i) net cash provided by operating
activities less (ii) purchases of rental equipment and other property
and equipment plus (iii) proceeds from sales of rental equipment and
proceeds from sales of rental locations. Free cash flow is presented
to provide 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 Generally Accepted Accounting Principles ("GAAP").
Accordingly, free cash flow should not be considered an alternative to
net income or cash flow from operating activities as indicators of
operating performance or liquidity. The table below provides a
reconciliation between preliminary net cash provided by operating
activities and free cash flow.

Six Months Ended
June 30
-----------------------
2005 2004
------------ ----------
(in millions)
Net cash provided by operating activities $355.8 $359.0
Purchases of rental equipment (482.3) (321.7)
Purchases of property and equipment ( 37.7) ( 37.8)
Proceeds from sales of rental equipment 140.2 110.9
Proceeds from sales of rental locations 2.9 -
------------ ----------
Free Cash Flow $(21.1) $110.4
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