##### Table of Contents



FORM 10-Q
 UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 001-33485
 RSC Holdings Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    22-1669012(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)6929 E. Greenway Pkwy.Scottsdale, Arizona
    
    85254(Address of principal executive offices)
    
    (Zip code)
 (480) 905-3300
 Registrants telephone number,
  N/A
 (Former name or former address, if changed since
   þ o
  o o þ
  o þ




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##### 



Table of Contents
 Cautionary Note Regarding Forward-Looking Information
    
    
    1PART I.Financial Information
    
    
    2ITEM 1.
    
    Financial Statements (unaudited)
    
    
    2Condensed Consolidated Balance Sheets at September 30, 2007 and December 31, 2006
    
    
    2Condensed Consolidated Statements of Income for the three and nine months ended
September 30, 2007 and September 30, 2006
    
    
    3Condensed Consolidated Statements of Cash Flows for the nine months ended September
30, 2007 and September 30, 2006
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27ITEM 4.
    
    Controls and Procedures
    
    
    27PART II.Other Information
    
    
    28ITEM 1.
    
    Legal Proceedings
    
    
    28ITEM 1A.
    
    Risk Factors
    
    
    28ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28ITEM 3.
    
    Defaults Upon Senior Securities
    
    
    29ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    29ITEM 5.
    
    Other Information
    
    
    29ITEM 6.
    
    Exhibits
    
    
    29SIGNATURES
    
    
    30EX-31.1EX-31.2EX-32.1




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##### Table of Contents



Cautionary Note Regarding Forward-Looking Information
    
    
    the effect of an economic downturn or other factors resulting in a decline in
non-residential construction and capital investment;
    
    increased competition from other companies in our industry and our inability to
increase or maintain our prices;
    
    our ability to obtain equipment at competitive prices;
    
    changes in the attitude of our customers toward renting, as compared with purchasing
equipment;
    
    our ability to generate cash and/or incur additional indebtedness to finance equipment
purchases;
    
    heavy reliance on centralized information systems;
    
    exposure to claims for personal injury, death and property damage resulting from the
use of equipment rented or sold by us;
    
    the ability and willingness of Atlas Copco AB (ACAB) and Atlas Copco Finance S.à.r.l
(ACF) to continue to meet and/or perform their obligations under the Recapitalization
Agreement (as defined herein) to indemnify and defend us against various matters,
including, but not limited to, litigation relating to alleged exposure to silica and
asbestos;
    
    the effect of changes in laws and regulations, including those relating to the
environment and customer privacy, among others;
    
    risks related to our substantial amount of indebtedness;
    
    fluctuations in fuel or supply costs; and
    
    claims that the software products and information systems on which we rely infringe on
the intellectual property rights of others.
  1




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##### Table of Contents



PART I. Financial Information
 
 Item 1. Financial Statements
 RSC HOLDINGS INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 (Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    2,170
    
    
    $
    46,188Accounts receivable, net
    
    
    300,858
    
    
    
    268,383Inventory
    
    
    20,662
    
    
    
    18,489Rental equipment, net
    
    
    1,972,218
    
    
    
    1,738,670Property and equipment, net
    
    
    193,589
    
    
    
    170,192Goodwill
    
    
    925,621
    
    
    
    925,621Deferred financing costs
    
    
    57,979
    
    
    
    67,915Other assets
    
    
    80,644
    
    
    
    90,498Total assets
    
    $
    3,553,741
    
    
    $
    3,325,956Liabilities and Stockholders DeficitAccounts payable
    
    $
    389,261
    
    
    $
    296,086Accrued expenses and other liabilities
    
    
    217,915
    
    
    
    163,996Debt
    
    
    2,702,283
    
    
    
    3,006,426Deferred income taxes
    
    
    317,457
    
    
    
    294,081Total liabilities
    
    
    3,626,916
    
    
    
    3,760,589Commitments and contingenciesStockholders deficitPreferred stock, no par value, (500,000
shares authorized, no shares issued and
outstanding at September 30, 2007 and
December 31, 2006)
    
    
    
    
    
    
    Common stock, no par value, (300,000,000
shares authorized, 103,147,591 shares issued
and outstanding at September 30, 2007 and
90,647,591 shares issued and outstanding at
December 31, 2006)
    
    
    818,888
    
    
    
    556,482Accumulated deficit
    
    
    (914,682
    )
    
    
    (999,899
    )Accumulated other comprehensive income
    
    
    22,619
    
    
    
    8,784Total stockholders deficit
    
    
    (73,175
    )
    
    
    (434,633
    )Total liabilities and stockholders deficit
    
    $
    3,553,741
    
    
    $
    3,325,956
  2




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RSC HOLDINGS INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended September 30,
    
    

Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Equipment rental revenue
    
    $
    411,585
    
    
    $
    366,420
    
    
    $
    1,144,206
    
    
    $
    1,008,646Sale of merchandise
    
    
    19,909
    
    
    
    22,585
    
    
    
    60,896
    
    
    
    70,773Sale of used rental equipment
    
    
    30,460
    
    
    
    38,594
    
    
    
    106,027
    
    
    
    147,893Total revenues
    
    
    461,954
    
    
    
    427,599
    
    
    
    1,311,129
    
    
    
    1,227,312Cost of revenues:Cost of equipment rentals, excluding
depreciation
    
    
    163,693
    
    
    
    151,132
    
    
    
    479,676
    
    
    
    436,339Depreciation  rental equipment
    
    
    76,485
    
    
    
    65,988
    
    
    
    216,553
    
    
    
    186,277Cost of merchandise sales
    
    
    12,080
    
    
    
    14,048
    
    
    
    36,880
    
    
    
    43,649Cost of used rental equipment sales
    
    
    21,288
    
    
    
    29,478
    
    
    
    75,180
    
    
    
    112,889Total cost of revenues
    
    
    273,546
    
    
    
    260,646
    
    
    
    808,289
    
    
    
    779,154Gross profit
    
    
    188,408
    
    
    
    166,953
    
    
    
    502,840
    
    
    
    448,158Operating expenses:Selling, general, and administrative
    
    
    40,431
    
    
    
    34,160
    
    
    
    111,120
    
    
    
    99,164Management fees
    
    
    
    
    
    
    
    
    
    
    23,000
    
    
    
    Depreciation and amortization 
non-rental equipment
    
    
    11,843
    
    
    
    9,986
    
    
    
    34,152
    
    
    
    28,419Total operating expenses
    
    
    52,274
    
    
    
    44,146
    
    
    
    168,272
    
    
    
    127,583Operating income
    
    
    136,134
    
    
    
    122,807
    
    
    
    334,568
    
    
    
    320,575Interest expense, net
    
    
    58,204
    
    
    
    26,277
    
    
    
    195,093
    
    
    
    73,553Other income, net
    
    
    (22
    )
    
    
    (102
    )
    
    
    (224
    )
    
    
    (311
    )Income before provision for income taxes
    
    
    77,952
    
    
    
    96,632
    
    
    
    139,699
    
    
    
    247,333Provision for income taxes
    
    
    30,403
    
    
    
    37,029
    
    
    
    54,482
    
    
    
    92,848Net income
    
    $
    47,549
    
    
    $
    59,603
    
    
    $
    85,217
    
    
    $
    154,485Preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,997
    )Net income available for common
stockholders
    
    $
    47,549
    
    
    $
    59,603
    
    
    $
    85,217
    
    
    $
    146,488Weighted average shares outstanding used in
computing net income per common share :Basic
    
    
    103,148
    
    
    
    330,697
    
    
    
    96,600
    
    
    
    330,697Diluted
    
    
    104,642
    
    
    
    330,697
    
    
    
    98,100
    
    
    
    330,697Net income per common share:Basic
    
    $
    0.46
    
    
    $
    0.18
    
    
    $
    0.88
    
    
    $
    0.44Diluted
    
    $
    0.45
    
    
    $
    0.18
    
    
    $
    0.87
    
    
    $
    0.44
  3




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RSC HOLDINGS INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    85,217
    
    
    $
    154,485Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    250,705
    
    
    
    214,696Amortization of deferred financing costs
    
    
    10,709
    
    
    
    Share-based compensation expense
    
    
    2,843
    
    
    
    810Gain on sales of rental and non-rental property and
equipment, net of non-cash writeoffs
    
    
    (32,407
    )
    
    
    (40,417
    )Deferred income taxes
    
    
    21,482
    
    
    
    50,311Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (29,911
    )
    
    
    (22,522
    )Inventory
    
    
    (2,174
    )
    
    
    215Other assets
    
    
    2,690
    
    
    
    1,298Accounts payable
    
    
    123,325
    
    
    
    82,164Accrued expenses and other liabilities
    
    
    63,242
    
    
    
    49,750Net cash provided by operating activities
    
    
    495,721
    
    
    
    490,790Cash flows from investing activities:Purchases of rental equipment
    
    
    (516,105
    )
    
    
    (640,238
    )Purchases of property and equipment
    
    
    (14,751
    )
    
    
    (16,757
    )Proceeds from sales of rental equipment
    
    
    106,027
    
    
    
    147,893Proceeds from sales of property and equipment
    
    
    9,803
    
    
    
    13,198Net cash used in investing activities
    
    
    (415,026
    )
    
    
    (495,904
    )Cash flows from financing activities:Cash consideration paid to Atlas
    
    
    (17,995
    )
    
    
    Proceeds from senior ABL revolver
    
    
    31,458
    
    
    
    Payments on senior ABL term revolver
    
    
    (120,736
    )
    
    
    Payments on senior ABL term loan
    
    
    (1,875
    )
    
    
    Payments on Senior Term Facility
    
    
    (230,700
    )
    
    
    Payments on capital leases and other
    
    
    (29,057
    )
    
    
    (26,789
    )Net proceeds from affiliated debt
    
    
    
    
    
    
    32,104Deferred financing costs
    
    
    (437
    )
    
    
    Proceeds from the issuance of common stock
    
    
    255,064
    
    
    
    Dividends paid
    
    
    
    
    
    
    (7,997
    )Capital contributions from Atlas
    
    
    4,500
    
    
    
    1,145Decrease in outstanding checks in excess of cash balances
    
    
    (14,774
    )
    
    
    Net cash used in financing activities
    
    
    (124,552
    )
    
    
    (1,537
    )Effect of foreign exchange rates on cash
    
    
    (161
    )
    
    
    156Net decrease in cash and cash equivalents
    
    
    (44,018
    )
    
    
    (6,495
    )Cash and cash equivalents at beginning of period
    
    
    46,188
    
    
    
    7,134Cash and cash equivalents at end of period
    
    $
    2,170
    
    
    $
    639Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    148,339
    
    
    $
    23,056Supplemental schedule of non-cash investing and financing activities:Purchase of assets under capital lease obligations
    
    $
    46,768
    
    
    $
    50,507
  4




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RSC HOLDINGS INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (1) Organization
 Business and Basis of Presentation
 Description of Business
  Basis of Presentation
     Prior to the Recapitalization
   5




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
 (2) Summary of Significant Accounting Policies
  Use of Estimates
  Cash Equivalents
  Accounts Receivable
  Inventory
  Rental Equipment
   6




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
   September 30,
    
    
    December 31,2007
    
    
    2006(in 000s)Rental equipment
    
    $
    2,757,980
    
    
    $
    2,399,109Less accumulated depreciation
    
    
    (785,762
    )
    
    
    (660,439
    )Rental equipment, net
    
    $
    1,972,218
    
    
    $
    1,738,670
 Property and Equipment
  Long-Lived Assets and Goodwill
    Reserves for Claims
  7




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
  Foreign Currency Translation
 Foreign Currency Translation
 Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities
 Comprehensive Income
 Reporting Comprehensive Income
 Fair Value of Financial Instruments
  Revenue Recognition
  8




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
  Reporting Revenue
Gross as a Principal versus Net as an Agent
 Cost of Revenues
  Selling, General and Administrative Expenses
  Income Taxes
  Accounting for Income Taxes Accounting for Uncertainty in Income Taxes
  Consideration Received from Vendors
 Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor
 9




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
  Share-Based Compensation
 Share-Based Payment.
 Deferred Financing Costs
  Concentration of Credit Risk
  Earnings per Share
 Earnings Per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in 000s except per share data)Numerator:Net income
    
    $
    47,549
    
    
    $
    59,603
    
    
    $
    85,217
    
    
    $
    154,485Less preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,997
    )Net income available for common stockholders
    
    $
    47,549
    
    
    $
    59,603
    
    
    $
    85,217
    
    
    $
    146,488Denominator:Weighted average shares  basic
    
    
    103,148
    
    
    
    330,697
    
    
    
    96,600
    
    
    
    330,697Employee stock options
    
    
    1,494
    
    
    
    
    
    
    
    1,500
    
    
    
    Weighted average shares  diluted
    
    
    104,642
    
    
    
    330,697
    
    
    
    98,100
    
    
    
    330,697Net income per common share  Basic
    
    $
    0.46
    
    
    $
    0.18
    
    
    $
    0.88
    
    
    $
    0.44Net income per common share Diluted
    
    $
    0.45
    
    
    $
    0.18
    
    
    $
    0.87
    
    
    $
    0.44Anti-dilutive securities excluded
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 10




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
 New Accounting Pronouncements
  Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 Fair Value Measurements .
 The Fair Value Option for Financial Assets and
Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 .
 (3) Comprehensive Income
 Nine Months Ended September 30,2007
    
    
    2006(in 000s)Net income
    
    $
    85,217
    
    
    $
    154,485Currency translation adjustments
    
    
    12,330
    
    
    
    2,145Change in fair value of cash flow hedges, net of tax
    
    
    1,505
    
    
    
    Comprehensive income
    
    $
    99,052
    
    
    $
    156,630
  Foreign
    
    
    Fair Market
    
    
    AccumulatedCurrency
    
    
    Value of
    
    
    OtherTranslation
    
    
    Cash Flow
    
    
    ComprehensiveHedge
    
    
    Income(in 000s)Balance at December 31, 2006
    
    $
    8,784
    
    
    $
    
    
    
    $
    8,784Foreign currency translation
    
    
    12,330
    
    
    
    
    
    
    
    12,330Change in fair value of cash flow hedges, net of tax
    
    
    
    
    
    
    1,505
    
    
    
    1,505Balance at September 30, 2007
    
    $
    21,114
    
    
    $
    1,505
    
    
    $
    22,619
 11




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
 (4) Debt consists of the following at:
 September 30,
    
    
    December 31,2007
    
    
    2006(in 000s)Senior ABL revolving credit facility
    
    $
    789,013
    
    
    $
    878,291Senior ABL term loan
    
    
    247,500
    
    
    
    249,375Senior Term Facility
    
    
    899,300
    
    
    
    1,130,000Senior Notes
    
    
    620,000
    
    
    
    620,000Capitalized lease obligations
    
    
    146,420
    
    
    
    128,688Other
    
    
    50
    
    
    
    72Total
    
    $
    2,702,283
    
    
    $
    3,006,426
      (5) Derivative Instruments
   12




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
  (6) Common and Preferred Stock
 Common Stock
     Preferred Stock
   (7) Income Taxes
  13




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
     (8) Commitments and Contingencies
   14




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
  (9) Legal and Insurance Matters
  (10) Affiliated Company Transactions
     (11) Business Segment and Geographic Information
  15




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RSC HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in 000s)
    
    
    (in 000s)Revenues from external customers:Domestic
    
    $
    438,652
    
    
    $
    409,676
    
    
    $
    1,249,769
    
    
    $
    1,180,318Foreign
    
    
    23,302
    
    
    
    17,923
    
    
    
    61,360
    
    
    
    46,994Total
    
    $
    461,954
    
    
    $
    427,599
    
    
    $
    1,311,129
    
    
    $
    1,227,312
  September 30,
    
    
    December 31,2007
    
    
    2006(in 000s)Rental equipment, netDomestic
    
    $
    1,881,933
    
    
    $
    1,670,181Foreign
    
    
    90,285
    
    
    
    68,489Total
    
    $
    1,972,218
    
    
    $
    1,738,670Property and equipment, netDomestic
    
    $
    184,118
    
    
    $
    163,049Foreign
    
    
    9,471
    
    
    
    7,143Total
    
    $
    193,589
    
    
    $
    170,192
 16




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our results of operations and financial condition
includes periods prior to the Recapitalization discussed below under The Recapitalization.
Accordingly, the discussion and analysis of prior periods does not reflect the significant impact
of the Recapitalization. Statements in the discussion and analysis regarding industry outlook, our
expectations regarding the performance of our business and other non-historical statements in the
discussion and analysis are forward-looking statements. These forward-looking statements are
subject to numerous risks and uncertainties. See Cautionary Note Regarding Forward-Looking
Information on page 1 of this report. Our actual results may differ materially from those
contained in, or implied by, any forward-looking statements.
 The following discussion is intended to enhance the readers understanding of our business
operations and present business environment. It should be read in conjunction with the section
entitled Risk Factors in Item 1A and our unaudited condensed consolidated financial statements
for the period ended September 30, 2007 included in this report.
 Overview
    Factors Affecting Our Results of Operations
   Critical Accounting Policies and Estimates
  17




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Accounts Receivable
  Rental Equipment
   Reserve for Claims
  Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities
 18




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Comprehensive Income
 Reporting Comprehensive Income
 Long-Lived Assets and Goodwill
    Revenue Recognition
   Reporting Revenue Gross as a Principal versus Net as
an Agent
 Cost of Revenues
  19




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Selling, General and Administrative Expenses
  Income Taxes
  , Accounting for Income Taxes (SFAS 109), Accounting
for Uncertainty in Income Taxes
  Consideration Received from Vendors
 Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor
  The Recapitalization
   20




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Results of Operations
 Three Months Ended September 30, 2007, Compared to Three Months Ended September 30, 2006
  Percent of RevenueThree Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,
    
    
    Increase (decrease)2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007 versus 2006(unaudited)Revenues:Equipment rental revenue
    
    $
    411,585
    
    
    $
    366,420
    
    
    
    89.1
    %
    
    
    85.7
    %
    
    $
    45,165
    
    
    
    12.3
    %Sale of merchandise
    
    
    19,909
    
    
    
    22,585
    
    
    
    4.3
    
    
    
    5.3
    
    
    
    (2,676
    )
    
    
    (11.8
    )Sale of used rental equipment
    
    
    30,460
    
    
    
    38,594
    
    
    
    6.6
    
    
    
    9.0
    
    
    
    (8,134
    )
    
    
    (21.1
    )Total revenues
    
    
    461,954
    
    
    
    427,599
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    34,355
    
    
    
    8.0Cost of revenues:Cost of equipment rentals,
excluding depreciation
    
    
    163,693
    
    
    
    151,132
    
    
    
    35.4
    
    
    
    35.3
    
    
    
    12,561
    
    
    
    8.3Depreciation  rental
equipment
    
    
    76,485
    
    
    
    65,988
    
    
    
    16.6
    
    
    
    15.4
    
    
    
    10,497
    
    
    
    15.9Cost of merchandise sales
    
    
    12,080
    
    
    
    14,048
    
    
    
    2.6
    
    
    
    3.3
    
    
    
    (1,968
    )
    
    
    (14.0
    )Cost of used rental
equipment sales
    
    
    21,288
    
    
    
    29,478
    
    
    
    4.6
    
    
    
    6.9
    
    
    
    (8,190
    )
    
    
    (27.8
    )Total cost of revenues
    
    
    273,546
    
    
    
    260,646
    
    
    
    59.2
    
    
    
    61.0
    
    
    
    12,900
    
    
    
    4.9Gross profit
    
    
    188,408
    
    
    
    166,953
    
    
    
    40.8
    
    
    
    39.0
    
    
    
    21,455
    
    
    
    12.9Operating expensesSelling, general, and
administrative
    
    
    40,431
    
    
    
    34,160
    
    
    
    8.8
    
    
    
    8.0
    
    
    
    6,271
    
    
    
    18.4Depreciation and
amortization  nonrental
equipment
    
    
    11,843
    
    
    
    9,986
    
    
    
    2.6
    
    
    
    2.3
    
    
    
    1,857
    
    
    
    18.6Total operating expenses
    
    
    52,274
    
    
    
    44,146
    
    
    
    11.3
    
    
    
    10.3
    
    
    
    8,128
    
    
    
    18.4Operating income
    
    
    136,134
    
    
    
    122,807
    
    
    
    29.5
    
    
    
    28.7
    
    
    
    13,327
    
    
    
    10.9Interest expense, net
    
    
    58,204
    
    
    
    26,277
    
    
    
    12.6
    
    
    
    6.1
    
    
    
    31,927
    
    
    
    121.5Other income, net
    
    
    (22
    )
    
    
    (102
    )
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    (78.4
    )Income before provision
for income taxes
    
    
    77,952
    
    
    
    96,632
    
    
    
    16.9
    
    
    
    22.6
    
    
    
    (18,680
    )
    
    
    (19.3
    )Provision for income taxes
    
    
    30,403
    
    
    
    37,029
    
    
    
    6.6
    
    
    
    8.7
    
    
    
    (6,626
    )
    
    
    (17.9
    )Net income
    
    $
    47,549
    
    
    $
    59,603
    
    
    
    10.3
    %
    
    
    13.9
    %
    
    $
    (12,054
    )
    
    
    (20.2
    )
   21




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Nine Months Ended September 30, 2007, Compared to Nine Months Ended September 30, 2006
  Percent of RevenueNine Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    Increase (decrease)2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007 versus 2006(unaudited)Revenues:Equipment rental revenue
    
    $
    1,144,206
    
    
    $
    1,008,646
    
    
    
    87.3
    %
    
    
    82.2
    %
    
    $
    135,560
    
    
    
    13.4
    %Sale of merchandise
    
    
    60,896
    
    
    
    70,773
    
    
    
    4.6
    
    
    
    5.8
    
    
    
    (9,877
    )
    
    
    (14.0
    )Sale of used rental equipment
    
    
    106,027
    
    
    
    147,893
    
    
    
    8.1
    
    
    
    12.1
    
    
    
    (41,866
    )
    
    
    (28.3
    )Total revenues
    
    
    1,311,129
    
    
    
    1,227,312
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    83,817
    
    
    
    6.8Cost of revenues:Cost of equipment rentals,
excluding depreciation
    
    
    479,676
    
    
    
    436,339
    
    
    
    36.6
    
    
    
    35.6
    
    
    
    43,337
    
    
    
    9.9Depreciation  rental
equipment
    
    
    216,553
    
    
    
    186,277
    
    
    
    16.5
    
    
    
    15.2
    
    
    
    30,276
    
    
    
    16.3Cost of merchandise sales
    
    
    36,880
    
    
    
    43,649
    
    
    
    2.8
    
    
    
    3.6
    
    
    
    (6,769
    )
    
    
    (15.5
    )Cost of used rental
equipment sales
    
    
    75,180
    
    
    
    112,889
    
    
    
    5.7
    
    
    
    9.2
    
    
    
    (37,709
    )
    
    
    (33.4
    )Total cost of revenues
    
    
    808,289
    
    
    
    779,154
    
    
    
    61.6
    
    
    
    63.5
    
    
    
    29,135
    
    
    
    3.7Gross profit
    
    
    502,840
    
    
    
    448,158
    
    
    
    38.4
    
    
    
    36.5
    
    
    
    54,682
    
    
    
    12.2Operating expensesSelling, general, and
administrative
    
    
    111,120
    
    
    
    99,164
    
    
    
    8.5
    
    
    
    8.1
    
    
    
    11,956
    
    
    
    12.1Management fees
    
    
    23,000
    
    
    
    
    
    
    
    1.8
    
    
    
    
    
    
    
    23,000
    
    
    
    Depreciation and
amortization  nonrental
equipment
    
    
    34,152
    
    
    
    28,419
    
    
    
    2.6
    
    
    
    2.3
    
    
    
    5,733
    
    
    
    20.2Total operating expenses
    
    
    168,272
    
    
    
    127,583
    
    
    
    12.8
    
    
    
    10.4
    
    
    
    40,689
    
    
    
    31.9Operating income
    
    
    334,568
    
    
    
    320,575
    
    
    
    25.5
    
    
    
    26.1
    
    
    
    13,993
    
    
    
    4.4Interest expense, net
    
    
    195,093
    
    
    
    73,553
    
    
    
    14.9
    
    
    
    6.0
    
    
    
    121,540
    
    
    
    165.2Other income, net
    
    
    (224
    )
    
    
    (311
    )
    
    
    
    
    
    
    
    
    
    
    87
    
    
    
    (28.0
    )Income before provision
for income taxes
    
    
    139,699
    
    
    
    247,333
    
    
    
    10.7
    
    
    
    20.2
    
    
    
    (107,634
    )
    
    
    (43.5
    )Provision for income taxes
    
    
    54,482
    
    
    
    92,848
    
    
    
    4.2
    
    
    
    7.6
    
    
    
    (38,366
    )
    
    
    (41.3
    )Net income
    
    $
    85,217
    
    
    $
    154,485
    
    
    
    6.5
    %
    
    
    12.6
    %
    
    $
    (69,268
    )
    
    
    (44.8
    )
    23




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24




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##### Table of Contents



Liquidity and Capital Resources
 Cash and Cash Flows
     Indebtedness and Liquidity
  25




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New Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN
48)
 Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements
 Fair Value Measurements
 26




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The Fair Value Option for Financial Assets and
Financial LiabilitiesIncluding an amendment of FASB Statement No. 115
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
   Currency Exchange Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  27




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Changes in Internal Control Over Financial Reporting
  
 PART II. Other Information
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  28




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Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibits and Financial Statement Schedules
 ExhibitNumber
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial Officer32.1
    
    Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer
 
 Schedules and exhibits not included above have been omitted because the information required has
been included in the financial statements or notes thereto or are not applicable or not required. 29




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##### Table of Contents



SIGNATURES
  RSC Holdings Inc.
 Signature
    
    Title
    
    Date/s/ Erik Olsson
    
    President and Director (Principal Executive Officer)
    
    October 31, 2007Erik Olsson/s/ Keith Sawottke
    
    Chief Financial Officer (Principal Financial andKeith Sawottke
    
    Principal Accounting Officer)
    
    October 31, 2007
 30




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EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial Officer32.1
    
    Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer
 
 Schedules and exhibits not included above have been omitted because the information required has
been included in the financial statements or notes thereto or are not applicable or not required. 31