United Rentals, Greenwich, Conn., last week announced financial results for the fourth quarter and full year 2009. For the fourth quarter, total revenue was $557 million and rental revenue was $450 million, compared with $791 million and $606 million, respectively, for the fourth quarter 2008. For the full year, total revenue was $2.4 billion and rental revenue was $1.8 billion, compared with $3.3 billion and $2.5 billion, respectively, for the full year 2008.

While revenues for the fourther quarter and full-year 2009 were down, the company listed the following as positive highlights of its results:

• Free cash flow increased to $367 million for the full year 2009, compared with $335 million for 2008.
• Total debt at year-end 2009 decreased by $270 million compared with year-end 2008, and net debt, which includes the impact of cash and cash equivalents, decreased by $362 million. The company has no significant debt maturities until 2013.
• SG&A expense decreased by $20 million for the fourth quarter year-over-year, and decreased by $101 million for the full year 2009 compared with 2008.
• The company sold $653 million of fleet on an original equipment cost basis in 2009, with an average age of 78 months.
• Cost of equipment rentals, excluding depreciation, decreased by $51 million for the fourth quarter and by $227 million for the full year 2009, compared with 2008.
• Time utilization was 61.8 percent for the fourth quarter and 60.7 percent for the full year 2009, representing decreases of 2.4 percentage points and 2.9 percentage points, respectively, from 2008. Rental rates declined 9.6 percent for the quarter and 11.8 percent for the year. Dollar utilization, which reflects the impact of both rental rates and time utilization, was 46.0 percent for the fourth quarter and 45.5 percent for full year 2009, representing decreases of 9.3 percentage points and 11.4 percentage points, respectively, from 2008.

Michael Kneeland, United Rentals CEO, said, “We can point to a number of significant contrasts between the strategic progress we made as a company in 2009 and our operating environment. Externally, the economic turmoil took a toll on our end markets, with the expected constraint on our revenues and margins. We responded with disciplined cost cutting and capital management, improving our free cash flow and SG&A reduction beyond projections.”

Kneeland continued, "At this time we are still seeing an environment that is very similar to the last half of 2009. Despite the challenges of a lingering downturn, we believe that the transformation of our customer service and sales operations, and our strong capital structure, put us in a unique position to gain share that will be accretive to earnings over time. We are becoming increasingly adept at balancing local market development with the pursuit of national accounts, industrial accounts and government business — the segments most closely aligned with our strategy for long-term profitable growth.”

For the fourth quarter 2009, on a GAAP continuing operations basis, the company reported a loss of $24 million or $0.39 per diluted share, compared with a loss of $853 million, or a loss of $14.25 per diluted share, for the fourth quarter 2008. Adjusted earnings per share, which excludes the impact of restructuring and impairment charges and other special items, was a loss of $0.21 per diluted share for the quarter, compared with earnings of $0.74 per diluted share for the prior year. Adjusted EBITDA margin, which also excludes the impact of restructuring and impairment charges and other special items, was 26.8 percent for the quarter, compared with 31.6 percent for the prior year.

For the full year 2009, on a GAAP continuing operations basis, the company reported a loss of $60 million or $0.98 per diluted share, compared with a loss of $704 million or $12.62 per diluted share, for 2008. Adjusted EPS, which excludes the impact of restructuring and impairment charges and other special items, was a loss of $0.76 per diluted share for 2009, compared with earnings of $2.96 per diluted share for the prior year. Adjusted EBITDA margin, which also excludes the impact of restructuring and impairment charges and other special items, was 26.6 percent for 2009, compared with 32.8 percent for the prior year.

The change in profitability for the fourth quarter and full year 2009, compared with 2008, primarily reflects the continued decline in nonresidential construction activity and its negative impact on pricing, partially offset by the savings realized from the company’s ongoing cost-cutting initiatives.

For full year 2009, free cash flow, a non-GAAP measure, was $367 million after total rental and non-rental capital expenditures of $311 million, compared with free cash flow of $335 million after total rental and non-rental capital expenditures of $704 million for full year 2008. The year-over-year increase in free cash flow was largely the result of a reduction in capital expenditures, partially offset by lower cash generated from operating activities.

The size of the rental fleet, as measured by the original equipment cost, was $3.8 billion at Dec. 31, 2009, compared with $4.1 billion at Dec. 31, 2008. The age of the rental fleet was 42.4 months on a unit-weighted basis at Dec. 31, 2009, compared with 39.2 months at Dec. 31, 2008.

The Feb. 4 conference call is available archived at www.ur.com.