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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2008



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to





Commission File Number 1-14387

United
Rentals, Inc.

Commission File Number 1-13663

United Rentals (North America), Inc.

(Exact Names of Registrants as Specified in Their Charters)







|                         |  |                                      
|------------------------ |  | -------------------------------------
|Delaware                 |  | 06-1522496                           
|Delaware                 |  | 06-1493538                           
|(State of Incorporation) |  | (I.R.S. Employer Identification Nos.)



|                                                   |  |           
|-------------------------------------------------- |  | ----------
|Five Greenwich Office Park, Greenwich, Connecticut |  | 06831     
|(Address of Principal Executive Offices)           |  | (Zip code)

Registrants telephone number, including area code: (203) 622-3131





Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes     ̈  No

Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  x        Accelerated Filer   ̈        Non-Accelerated Filer   ̈        Smaller Reporting Company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     ̈  Yes    x  No

As of July 25, 2008, there were 59,298,808 shares of United Rentals, Inc. Common Stock,
$.01 par value, outstanding. There is no market for the common stock of United Rentals (North America), Inc., all outstanding shares of which are owned by United Rentals, Inc.

This combined Form 10-Q is separately filed by (i) United Rentals, Inc. and (ii) United Rentals (North America), Inc. (which is a wholly owned
subsidiary of United Rentals, Inc.). United Rentals (North America), Inc. meets the conditions set forth in General Instruction (H) (1) (a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure
format permitted by such instruction.









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UNITED RENTALS, INC.

UNITED RENTALS (NORTH AMERICA), INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 2008

INDEX



|        |  |                                                                                                                                        |  |     
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                                                                        |  | Page
|        |  |                                                                                                                                       
|PART I  |  | FINANCIAL INFORMATION                                                                                                                  |  |     
|        |  |                                                                                                                                       
|Item 1  |  | Unaudited Condensed Consolidated Financial Statements                                                                                  |  | 4   
|        |  |                                                                                                                                       
|        |  | United Rentals, Inc. Condensed Consolidated Balance Sheets as of June 30, 2008, June 30, 2007 and December 31, 2007 (unaudited)        |  | 4   
|        |  |                                                                                                                                       
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2008 and 2007 (unaudited) |  | 5   
|        |  |                                                                                                                                       
|        |  | United Rentals, Inc. Condensed Consolidated Statement of Stockholders Equity for the Six Months Ended June 30, 2008 (unaudited)       |  | 6   
|        |  |                                                                                                                                       
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007 (unaudited)       |  | 7   
|        |  |                                                                                                                                       
|        |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                                         |  | 8   
|        |  |                                                                                                                                       
|Item 2  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                  |  | 26  
|        |  |                                                                                                                                       
|Item 3  |  | Quantitative and Qualitative Disclosures About Market Risk                                                                             |  | 33  
|        |  |                                                                                                                                       
|Item 4  |  | Controls and Procedures                                                                                                                |  | 34  
|        |  |                                                                                                                                       
|PART II |  | OTHER INFORMATION                                                                                                                      |  |     
|        |  |                                                                                                                                       
|Item 1  |  | Legal Proceedings                                                                                                                      |  | 34  
|        |  |                                                                                                                                       
|Item 1A |  | Risk Factors                                                                                                                           |  | 34  
|        |  |                                                                                                                                       
|Item 2  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                            |  | 35  
|        |  |                                                                                                                                       
|Item 4  |  | Submission of Matters to a Vote of Security Holders                                                                                    |  | 35  
|        |  |                                                                                                                                       
|Item 6  |  | Exhibits                                                                                                                               |  | 36  
|        |  |                                                                                                                                       
|        |  | Signatures                                                                                                                             |  | 37  



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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report are forward-looking in nature. Such statements can be identified by the use of forward-looking terminology
such as believe, expect, may, will, should, seek, on-track, plan, intend or anticipate, or the negative thereof or comparable
terminology, or by discussions of strategy or outlook. You are cautioned that our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control, and, consequently, our actual results may differ
materially from those projected by any forward-looking statements. Certain of such risks and uncertainties are referred to below under Item 1ARisk Factors, by reference to such risks and uncertainties as described in our Annual Report on
Form 10-K for the year ended December 31, 2007. Our forward-looking statements contained herein speak only as of the date of this report or, in the case of any document incorporated by reference, the date of that document. 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.



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

UNITED RENTALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except per share data)



|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------------ | - | ---------------- |  | - | -----
|                                                                                                                                                                                                     |  | June 30,2008 |       | June 30,2007 |   | December 31,2007
|ASSETS                                                                                                                                                                                               |  |              |       |              |   |                  |  |   |      
|Cash and cash equivalents                                                                                                                                                                            |  | $            | 80    |              | $ | 104              |  | $ | 381  
|Accounts receivable, net of allowance for doubtful accounts of $22, $25 and $26 at June 30, 2008, June 30, 2007 and
December 31, 2007, respectively                                                  |  |              | 478   |              |   | 553              |  |   | 519  
|Inventory                                                                                                                                                                                            |  |              | 94    |              |   | 162              |  |   | 91   
|Prepaid expenses and other assets                                                                                                                                                                    |  |              | 72    |              |   | 61               |  |   | 57   
|Deferred taxes                                                                                                                                                                                       |  |              | 44    |              |   | 48               |  |   | 72   
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Total current assets                                                                                                                                                                                 |  |              | 768   |              |   | 928              |  |   | 1,120
|Rental equipment, net                                                                                                                                                                                |  |              | 2,936 |              |   | 2,882            |  |   | 2,826
|Property and equipment, net                                                                                                                                                                          |  |              | 434   |              |   | 399              |  |   | 440  
|Goodwill and other intangible assets, net                                                                                                                                                            |  |              | 1,395 |              |   | 1,397            |  |   | 1,404
|Other long-term assets                                                                                                                                                                               |  |              | 76    |              |   | 62               |  |   | 52   
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Total assets                                                                                                                                                                                         |  | $            | 5,609 |              | $ | 5,668            |  | $ | 5,842
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                 |  |              |       |              |   |                  |  |   |      
|Current maturities of long-term debt                                                                                                                                                                 |  | $            | 12    |              | $ | 121              |  | $ | 15   
|Accounts payable                                                                                                                                                                                     |  |              | 311   |              |   | 348              |  |   | 195  
|Accrued expenses and other liabilities                                                                                                                                                               |  |              | 262   |              |   | 263              |  |   | 310  
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Total current liabilities                                                                                                                                                                            |  |              | 585   |              |   | 732              |  |   | 520  
|Long-term debt                                                                                                                                                                                       |  |              | 2,837 |              |   | 2,509            |  |   | 2,555
|Subordinated convertible debentures                                                                                                                                                                  |  |              | 146   |              |   | 146              |  |   | 146  
|Deferred taxes                                                                                                                                                                                       |  |              | 562   |              |   | 449              |  |   | 539  
|Other long-term liabilities                                                                                                                                                                          |  |              | 65    |              |   | 130              |  |   | 64   
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Total liabilities                                                                                                                                                                                    |  |              | 4,195 |              |   | 3,966            |  |   | 3,824
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Preferred stock                                                                                                                                                                                      |  |              |      |              |   |                 |  |   |     
|Common stock$0.01 par value, 500,000,000 shares authorized, 86,454,525, 82,983,626 and 86,329,773 shares issued and outstanding at
June 30, 2008, June 30, 2007 and December 31, 2007, respectively |  |              | 1     |              |   | 1                |  |   | 1    
|Additional paid-in capital                                                                                                                                                                           |  |              | 1,062 |              |   | 1,457            |  |   | 1,494
|Retained earnings                                                                                                                                                                                    |  |              | 267   |              |   | 166              |  |   | 431  
|Accumulated other comprehensive income                                                                                                                                                               |  |              | 84    |              |   | 78               |  |   | 92   
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|Total stockholders equity                                                                                                                                                                           |  |              | 1,414 |              |   | 1,702            |  |   | 2,018
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      
|                                                                                                                                                                                                     |  | $            | 5,609 |              | $ | 5,668            |  | $ | 5,842
|                                                                                                                                                                                                     |  |              |       |              |   |                  |  |   |      

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In millions, except per share amounts)



|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|----------------------------------------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ---- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                                                          |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |  
|                                                                                          |  | 2008                       |       |   | 2007                     |   |      | 2008 |  |   | 2007  |  
|Revenues:                                                                                 |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Equipment rentals                                                                         |  | $                          | 621   |   |                          | $ | 659  |      |  | $ | 1,192 |   |  | $ | 1,226 |  
|Sales of rental equipment                                                                 |  |                            | 68    |   |                          |   | 83   |      |  |   | 134   |   |  |   | 165   |  
|New equipment sales                                                                       |  |                            | 46    |   |                          |   | 67   |      |  |   | 88    |   |  |   | 121   |  
|Contractor supplies sales                                                                 |  |                            | 59    |   |                          |   | 111  |      |  |   | 115   |   |  |   | 205   |  
|Service and other revenues                                                                |  |                            | 37    |   |                          |   | 42   |      |  |   | 74    |   |  |   | 83    |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Total revenues                                                                            |  |                            | 831   |   |                          |   | 962  |      |  |   | 1,603 |   |  |   | 1,800 |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Cost of revenues:                                                                         |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation                                         |  |                            | 291   |   |                          |   | 299  |      |  |   | 566   |   |  |   | 578   |  
|Depreciation of rental equipment                                                          |  |                            | 110   |   |                          |   | 108  |      |  |   | 217   |   |  |   | 210   |  
|Cost of rental equipment sales                                                            |  |                            | 48    |   |                          |   | 60   |      |  |   | 97    |   |  |   | 118   |  
|Cost of new equipment sales                                                               |  |                            | 39    |   |                          |   | 56   |      |  |   | 73    |   |  |   | 100   |  
|Cost of contractor supplies sales                                                         |  |                            | 45    |   |                          |   | 89   |      |  |   | 89    |   |  |   | 167   |  
|Cost of service and other revenues                                                        |  |                            | 15    |   |                          |   | 18   |      |  |   | 30    |   |  |   | 35    |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Total cost of revenues                                                                    |  | $                          | 548   |   |                          |   | 630  |      |  |   | 1,072 |   |  |   | 1,208 |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Gross profit                                                                              |  |                            | 283   |   |                          |   | 332  |      |  |   | 531   |   |  |   | 592   |  
|Selling, general and administrative expenses                                              |  |                            | 126   |   |                          |   | 147  |      |  |   | 257   |   |  |   | 296   |  
|Provision relating to SEC inquiry                                                         |  |                            | 14    |   |                          |   |     |      |  |   | 14    |   |  |   |      |  
|Non-rental depreciation and amortization                                                  |  |                            | 15    |   |                          |   | 13   |      |  |   | 30    |   |  |   | 25    |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Operating income                                                                          |  |                            | 128   |   |                          |   | 172  |      |  |   | 230   |   |  |   | 271   |  
|Interest expense, net                                                                     |  |                            | 48    |   |                          |   | 55   |      |  |   | 89    |   |  |   | 102   |  
|Interest expensesubordinated convertible debentures                                      |  |                            | 3     |   |                          |   | 3    |      |  |   | 5     |   |  |   | 5     |  
|Other (income) expense, net                                                               |  |                            | 1     |   |                          |   | (2   | )    |  |   | 1     |   |  |   | (2    | )
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Income from continuing operations before provision for income taxes                       |  |                            | 76    |   |                          |   | 116  |      |  |   | 135   |   |  |   | 166   |  
|Provision for income taxes                                                                |  |                            | 39    |   |                          |   | 49   |      |  |   | 60    |   |  |   | 67    |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Income from continuing operations                                                         |  |                            | 37    |   |                          |   | 67   |      |  |   | 75    |   |  |   | 99    |  
|Loss from discontinued operation, net of taxes                                            |  |                            |      |   |                          |   |     |      |  |   |      |   |  |   | (2    | )
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Net income                                                                                |  | $                          | 37    |   |                          | $ | 67   |      |  | $ | 75    |   |  | $ | 97    |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|                                                                                          |  |                            |       |  
|Preferred stock redemption charge                                                         |  | $                          | (239  | ) |                          |   |     |      |  | $ | (239  | ) |  |   |      |  
|Net (loss) income available to common stockholders                                        |  | $                          | (202  | ) |                          | $ | 69   |      |  | $ | (164  | ) |  | $ | 101   |  
|Basic earnings (loss) available to common stockholders:                                   |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|(Loss) income from continuing operations (inclusive of preferred stock redemption charge) |  | $                          | (2.33 | ) |                          | $ | 0.68 |      |  | $ | (1.89 | ) |  | $ | 1.01  |  
|Loss from discontinued operation                                                          |  |                            |      |   |                          |   |     |      |  |   |      |   |  |   | (0.02 | )
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Net (loss) income                                                                         |  | $                          | (2.33 | ) |                          | $ | 0.68 |      |  | $ | (1.89 | ) |  | $ | 0.99  |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Diluted earnings (loss) available to common stockholders:                                 |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|(Loss) income from continuing operations (inclusive of preferred stock redemption charge) |  | $                          | (2.33 | ) |                          | $ | 0.60 |      |  | $ | (1.89 | ) |  | $ | 0.90  |  
|Loss from discontinued operation                                                          |  |                            |      |   |                          |   |     |      |  |   |      |   |  |   | (0.02 | )
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  
|Net (loss) income                                                                         |  | $                          | (2.33 | ) |                          | $ | 0.60 |      |  | $ | (1.89 | ) |  | $ | 0.88  |  
|                                                                                          |  |                            |       |   |                          |   |      |      |  |   |       |   |  |   |       |  

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (UNAUDITED)

(Dollars in millions)



|                                         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|---------------------------------------- |  | ------------------------------------------ | - | ------------------------------------------ | - | --------------- |  | ------ |  | ------------------------ | - |  | ---------------- | ----- | - | ------------------- | - | ---- | ----------------------------------- |  | -- | - |  | - | -- | -
|                                         |  |                                            |   |                                            |   | Common Stock    |  |        |  |                          |   |  |                  |       |   |                     |   |     
|                                         |  | Series CPerpetualConvertiblePreferredStock |   | Series DPerpetualConvertiblePreferredStock |   | Number ofShares |  | Amount |  | AdditionalPaid-inCapital |   |  | RetainedEarnings |       |   | ComprehensiveIncome |   |      | AccumulatedOtherComprehensiveIncome | 
|Balance, December 31, 2007               |  | $                                          |  |                                            | $ |                |  | 86     |  | $                        | 1 |  | $                | 1,494 |   |                     | $ | 431  |                                     |  |    |   |  | $ | 92 |  
|Comprehensive income:                    |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Net income                               |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   | 75   |                                     |  | 75 |   |  |   |    |  
|Other comprehensive income:              |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Foreign currency translation adjustments |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  | (8 | ) |  |   | (8 | )
|                                         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Comprehensive income                     |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  | 67 |   |  |   |    |  
|                                         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Preferred stock redemption               |  | $                                          |  |                                            | $ |                |  |        |  |                          |   |  | $                | (431  | ) |                     | $ | (239 | )                                   |  |    |   |  |   |    |  
|Exercise of common stock options         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  | 1     |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Stock compensation expense               |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  | 5     |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Forfeiture of stock compensation         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  | (3    | ) |                     |   |      |                                     |  |    |   |  |   |    |  
|Other                                    |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  | (4    | ) |                     |   |      |                                     |  |    |   |  |   |    |  
|                                         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  
|Balance, June 30, 2008                   |  | $                                          |  |                                            | $ |                |  | 86     |  | $                        | 1 |  | $                | 1,062 |   |                     | $ | 267  |                                     |  |    |   |  | $ | 84 |  
|                                         |  |                                            |   |                                            |   |                 |  |        |  |                          |   |  |                  |       |   |                     |   |      |                                     |  |    |   |  |   |    |  

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)



|                                                                                                         |  |                          |      |   |      |   |      |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------ | ---- | - | ---- | - | ---- | -
|                                                                                                         |  | Six Months EndedJune 30, |     
|                                                                                                         |  | 2008                     |      |   | 2007 |  
|Cash Flows From Operating Activities:                                                                    |  |                          |      |   |      |   |      |  
|Income from continuing operations                                                                        |  | $                        | 75   |   |      | $ | 99   |  
|Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |  |                          |      |   |      |   |      |  
|Depreciation and amortization                                                                            |  |                          | 247  |   |      |   | 235  |  
|Amortization of deferred financing costs                                                                 |  |                          | 7    |   |      |   | 5    |  
|Gain on sales of rental equipment                                                                        |  |                          | (37  | ) |      |   | (47  | )
|Gain on sales of non-rental equipment                                                                    |  |                          | (1   | ) |      |   | (2   | )
|Non-cash adjustments to equipment                                                                        |  |                          | 4    |   |      |   |     |  
|Stock compensation expense                                                                               |  |                          | 2    |   |      |   | 10   |  
|Increase in deferred taxes                                                                               |  |                          | 52   |   |      |   | 20   |  
|Changes in operating assets and liabilities:                                                             |  |                          |      |   |      |   |      |  
|(Increase) decrease in accounts receivable                                                               |  |                          | 39   |   |      |   | (50  | )
|Increase in inventory                                                                                    |  |                          | (3   | ) |      |   | (23  | )
|Increase decrease in prepaid expenses and other assets                                                   |  |                          | (12  | ) |      |   | (8   | )
|Increase in accounts payable                                                                             |  |                          | 117  |   |      |   | 130  |  
|Decrease in accrued expenses and other liabilities                                                       |  |                          | (43  | ) |      |   | (46  | )
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net cash provided by operating activitiescontinuing operations                                          |  |                          | 447  |   |      |   | 323  |  
|Net cash provided by (used in) operating activitiesdiscontinued operation                               |  |                          |     |   |      |   | 6    |  
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net cash provided by operating activities                                                                |  |                          | 447  |   |      |   | 329  |  
|Cash Flows From Investing Activities:                                                                    |  |                          |      |   |      |   |      |  
|Purchases of rental equipment                                                                            |  |                          | (437 | ) |      |   | (604 | )
|Purchases of non-rental equipment                                                                        |  |                          | (32  | ) |      |   | (53  | )
|Proceeds from sales of rental equipment                                                                  |  |                          | 134  |   |      |   | 165  |  
|Proceeds from sales of non-rental equipment                                                              |  |                          | 5    |   |      |   | 7    |  
|Purchases of other companies                                                                             |  |                          |     |   |      |   | (21  | )
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net cash used in investing activitiescontinuing operations                                              |  |                          | (330 | ) |      |   | (506 | )
|Net cash provided by (used in) investing activitiesdiscontinued operation                               |  |                          |     |   |      |   | 69   |  
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net cash used in investing activities                                                                    |  |                          | (330 | ) |      |   | (437 | )
|Cash Flows From Financing Activities:                                                                    |  |                          |      |   |      |   |      |  
|Proceeds from debt                                                                                       |  |                          | 353  |   |      |   | 227  |  
|Payments on debt                                                                                         |  |                          | (486 | ) |      |   | (165 | )
|Cash paid in connection with preferred stock redemption                                                  |  |                          | (254 | ) |      |   |     |  
|Payments of financing costs                                                                              |  |                          | (30  | ) |      |   |     |  
|Proceeds from the exercise of common stock options                                                       |  |                          | 1    |   |      |   | 17   |  
|Shares repurchased and retired                                                                           |  |                          | (1   | ) |      |   | (1   | )
|Excess tax benefits from share-based payment arrangements                                                |  |                          |     |   |      |   | 10   |  
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net cash provided by financing activities                                                                |  |                          | (417 | ) |      |   | 88   |  
|Effect of foreign exchange rates                                                                         |  |                          | (1   | ) |      |   | 5    |  
|                                                                                                         |  |                          |      |   |      |   |      |  
|Net decrease in cash and cash equivalents                                                                |  |                          | (301 | ) |      |   | (15  | )
|Cash and cash equivalents at beginning of period                                                         |  |                          | 381  |   |      |   | 119  |  
|                                                                                                         |  |                          |      |   |      |   |      |  
|Cash and cash equivalents at end of period                                                               |  | $                        | 80   |   |      | $ | 104  |  
|                                                                                                         |  |                          |      |   |      |   |      |  

See accompanying notes



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share data unless otherwise indicated)

1. Organization, Description of Business
and Basis of Presentation

General

United Rentals, Inc. (Holdings, United Rentals or the Company) is principally a holding company and conducts its operations primarily through its wholly owned subsidiary, United Rentals (North America),
Inc. (URNA), and subsidiaries of URNA. Holdings primary asset is its sole ownership of all issued and outstanding shares of common stock of URNA. URNAs various credit agreements and debt instruments place restrictions on its
ability to transfer funds to its shareholder.

We rent equipment to a diverse customer base that includes construction and industrial
companies, manufacturers, utilities, municipalities, homeowners and others in the United States, Canada and Mexico. In addition to renting equipment, we sell new and used rental equipment, as well as related contractor supplies, parts and service.

In June 2008, we commenced a modified Dutch auction tender offer in which we offered to purchase up to 27.16 million
shares of our common stock at a price not less than $22.00 nor greater than $25.00 per share. The tender offer expired in July 2008 and, in accordance with the terms of the offer, we accepted for payment an aggregate of 27.16 million shares of
our common stock at a price of $22.00 per share, for a total cost of $598 (excluding fees and expenses). The number of shares of common stock purchased in the tender offer represented approximately 31 percent of the total common stock outstanding on
the last full trading day prior to the commencement of the offer.

Also in June 2008, and in connection with our announcement of the tender
offer, we repurchased all of our outstanding Series C and Series D preferred stock, a substantial majority of which was held by Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P. Prior to this preferred stock repurchase, a
majority of the preferred holders had the right to consent to certain transactions by us, including the aforementioned tender offer. Under the definitive repurchase agreement, the total purchase price for the preferred stock was approximately $679,
a portion of which was settled through the issuance by Holdings of new 14% Senior Notes due 2014. In addition, and as a result of the repurchase of the preferred stock, Leon Black and Michael Gross, the two company directors elected by the former
preferred holders in accordance with the terms of the Series C preferred stock, resigned from our board. Also in June 2008, we, URNA, and certain of our subsidiaries entered into a credit agreement which provides for a new $1.25 billion senior
secured asset-based revolving credit facility, in connection with which URNA repaid the amounts outstanding under its former revolving credit facility and term loan. See notes 5 and 6 to our condensed consolidated financial statements for additional
information concerning the new asset-based revolving credit facility and the repurchase of the preferred stock, respectively.

We have
prepared the accompanying unaudited condensed consolidated interim financial statements in accordance with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2007 (the 2007 Form 10-K)
and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have
been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the 2007 Form 10-K. Certain reclassifications have been made to prior year financial information to conform to the current year
presentation.

In our opinion, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement
of financial position, operating results and cash flows for the interim periods presented have been made. Interim results of operations are not necessarily indicative of the results of the full year.

New Accounting Pronouncements

In September 2006, the
FASB issued Statement 157, Fair Value Measurement (Statement 157). Statement 157 defines fair value, establishes a framework for measuring fair value in GAAP and establishes a hierarchy that categorizes and prioritizes
the sources to be used to estimate fair value. Statement 157 also expands financial statement disclosures about fair value measurements. On February 12, 2008, the FASB issued FASB Staff Position (FSP) 157-2 which delays the
effective date of Statement 157 for one year for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).
Statement 157 and FSP 157-2 are effective for financial statements issued for fiscal years beginning after November 15, 2007. We have elected a partial deferral of Statement 157 under the provisions of FSP 157-2 related to the
measurement of fair value used when evaluating goodwill, other intangible assets and other long-lived assets for impairment and valuing asset retirement obligations and liabilities for exit or disposal activities. The partial adoption of
Statement 157 on January 1, 2008 did not have a material impact on our condensed consolidated financial statements.



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2. Segment Information

Our reportable segments are general rentals and trench safety, pump and power. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and
activities. The general rentals segments customers include construction and industrial companies, manufacturers, utilities, municipalities and homeowners. The general rentals segment operates throughout the United States and Canada and has one
location in Mexico. The trench safety, pump and power segment includes the rental of specialty construction products and related services. The trench safety, pump and power segments customers include construction companies involved in
infrastructure projects, municipalities and industrial companies. This segment operates in the United States and has one location in Canada. These segments align our external segment reporting with how management evaluates and allocates resources.
We evaluate segment performance based on segment operating results.

Operating segment revenues and profitability for the three and six
months ended June 30, 2008 and 2007 were as follows:



|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|-------------------------------------------------------------- |  | -------------------------- | --- | ------------------------ | - | ---- |  | ---- | ----- |  | - | -----
|                                                               |  | Three Months EndedJune 30, |     | Six Months EndedJune 30,
|                                                               |  | 2008                       |     | 2007                     |   | 2008 |  | 2007
|Total reportable segment revenues                              |  |                            |     |                          |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                          | 781 |                          | $ | 904  |  | $    | 1,508 |  | $ | 1,693
|Trench safety, pump and power                                  |  |                            | 50  |                          |   | 58   |  |      | 95    |  |   | 107  
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total revenues                                                 |  | $                          | 831 |                          | $ | 962  |  | $    | 1,603 |  | $ | 1,800
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total reportable segment depreciation and amortization expense |  |                            |     |                          |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                          | 119 |                          | $ | 115  |  | $    | 235   |  | $ | 223  
|Trench safety, pump and power                                  |  |                            | 6   |                          |   | 6    |  |      | 12    |  |   | 12   
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total depreciation and amortization expense                    |  | $                          | 125 |                          | $ | 121  |  | $    | 247   |  | $ | 235  
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Reportable segment operating income                            |  |                            |     |                          |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                          | 115 |                          | $ | 157  |  | $    | 208   |  | $ | 246  
|Trench safety, pump and power                                  |  |                            | 13  |                          |   | 15   |  |      | 22    |  |   | 25   
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total operating income                                         |  | $                          | 128 |                          | $ | 172  |  | $    | 230   |  | $ | 271  
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total reportable segment capital expenditures                  |  |                            |     |                          |   |      |  |      |       |  |   |      
|General rentals                                                |  |                            |     |                          |   |      |  | $    | 462   |  | $ | 637  
|Trench safety, pump and power                                  |  |                            |     |                          |   |      |  |      | 7     |  |   | 20   
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total capital expenditures                                     |  |                            |     |                          |   |      |  | $    | 469   |  | $ | 657  
|                                                               |  |                            |     |                          |   |      |  |      |       |  |   |      



|                                |  |              |       |              |   |                  |  |   |      
|------------------------------- |  | ------------ | ----- | ------------ | - | ---------------- |  | - | -----
|                                |  | June 30,2008 |       | June 30,2007 |   | December 31,2007
|Total reportable segment assets |  |              |       |              |   |                  |  |   |      
|General rentals                 |  | $            | 5,463 |              | $ | 5,505            |  | $ | 5,688
|Trench safety, pump and power   |  |              | 146   |              |   | 163              |  |   | 154  
|                                |  |              |       |              |   |                  |  |   |      
|Total assets                    |  | $            | 5,609 |              | $ | 5,668            |  | $ | 5,842
|                                |  |              |       |              |   |                  |  |   |      

3. Income Taxes

We adopted the provisions of FIN 48 on January 1, 2007. We did not record any unrecognized income tax benefits as a result of the implementation of FIN 48. As of December 31, 2007, we had $7 of unrecognized
tax benefits, all of which would impact our effective tax rate if recognized. For the three and six months ended June 30, 2008, there was no change to our unrecognized tax benefits. We include interest accrued on the underpayment of income
taxes in interest expense and penalties, if any, related to unrecognized tax benefits in selling, general and administrative expense. For the three and six months ended June 30, 2008, interest expense of less than $1 related to income tax was
reflected in our condensed consolidated statement of income.



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We file income tax returns in the U.S. and in several foreign jurisdictions. With few exceptions, we have
completed our domestic and international income tax examinations, or the statute of limitations has expired in the respective jurisdictions, for years prior to 2004. The Internal Revenue Service has completed audits for periods prior to 2006;
Canadian authorities have concluded income tax audits for periods prior to 2006, and the Company has agreed to the findings, however, 2003 through 2005 remain open to transfer pricing audit adjustments. Included in the balance of unrecognized tax
benefits at June 30, 2008 are certain tax positions for which it is reasonably possible that the total amounts of the unrecognized tax benefits for those tax positions could significantly change during the next twelve months. However, based on
the status of the ongoing audit examinations and alternative options available to the Company for certain of these tax positions, which could include legal proceedings, it is not possible to estimate the amount of the change, if any, to the
previously recorded uncertain tax positions.

4. Goodwill and Other Intangible Assets

The carrying amount of the Companys goodwill was $1,354, $1,350 and $1,358 at June 30, 2008, June 30, 2007 and December 31, 2007,
respectively. We are required to review our goodwill for impairment annually as of a scheduled review date. However, if events or circumstances suggest that goodwill could be impaired, we may be required to conduct an earlier review. The scheduled
review date is October 1 of each year.

Other intangible assets consist of customer relationships and non-compete agreements and are
amortized over periods ranging from one to 12 years. Amortization expense for other intangible assets was $2 and $1 for the three months ended June 30, 2008 and 2007, respectively, and $4 and $3 for the six months ended June 30, 2008 and
2007, respectively. The cost of other intangible assets and the related accumulated amortization as of June 30, 2008 was as follows:



|                         |  |              |     |  
|------------------------ |  | ------------ | --- | -
|                         |  | June 30,2008 |    
|Gross carrying amount    |  | $            | 82  |  
|Accumulated amortization |  |              | (41 | )
|                         |  |              |     |  
|Net amount               |  | $            | 41  |  
|                         |  |              |     |  

5. Debt

Long-term debt consists of the following:



|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  
|-------------------------------------------------- |  | ------------ | ----- | - | ------------ | - | ----- | ---------------- |  | - | ----- | -
|                                                   |  | June 30,2008 |       |   | June 30,2007 |   |       | December 31,2007 | 
|URNA and subsidiaries debt:                        |  |              |       |   |              |   |       |                  |  |   |       |  
|Revolving Credit Facility                          |  | $            |      |   |              | $ | 150   |                  |  | $ | 140   |  
|Term Loan                                          |  |              |      |   |              |   | 329   |                  |  |   | 327   |  
|$1.25 billion ABL Facility                         |  |              | 135   |   |              |   |      |                  |  |   |      |  
|73/4 percent Senior Subordinated Notes             |  |              | 525   |   |              |   | 525   |                  |  |   | 525   |  
|7 percent Senior Subordinated Notes                |  |              | 375   |   |              |   | 375   |                  |  |   | 375   |  
|61/2 percent Senior Notes                          |  |              | 1,000 |   |              |   | 1,000 |                  |  |   | 1,000 |  
|17/8 percent Convertible Senior Subordinated Notes |  |              | 144   |   |              |   | 144   |                  |  |   | 144   |  
|Accounts Receivable Securitization Facility        |  |              | 206   |   |              |   | 100   |                  |  |   |      |  
|Other debt, including capital leases               |  |              | 52    |   |              |   | 7     |                  |  |   | 59    |  
|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  
|Total URNA and subsidiaries debt                   |  |              | 2,437 |   |              |   | 2,630 |                  |  |   | 2,570 |  
|Less current portion                               |  |              | (12   | ) |              |   | (121  | )                |  |   | (15   | )
|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  
|Long-term URNA and subsidiaries debt               |  |              | 2,425 |   |              |   | 2,509 |                  |  |   | 2,555 |  
|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  
|URI debt:                                          |  |              |       |   |              |   |       |                  |  |   |       |  
|14 percent Senior Notes due 2014  long term       |  |              | 412   |   |              |   |      |                  |  |   |      |  
|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  
|Total long-term debt1                              |  | $            | 2,837 |   |              | $ | 2,509 |                  |  | $ | 2,555 |  
|                                                   |  |              |       |   |              |   |       |                  |  |   |       |  



|1 | In August 1998, a subsidiary trust (the Trust) of Holdings issued and sold $300 of 61/2percent Convertible Quarterly Income Preferred Securities (QUIPS) in a private offering. The Trust used the proceeds
from the offering to purchase 61/2percent Convertible
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | Subordinated Debentures due 2028 (the Debentures) which resulted in Holdings receiving all of the net proceeds of the offering. The QUIPS are
non-voting securities, carry a liquidation value of $50 (fifty dollars) per security and are convertible into the Companys common stock. Total long-term debt at June 30, 2008, June 30, 2007 and December 31, 2007 excludes
$146 of these Debentures which are separately classified in our condensed consolidated balance sheets and referred to as subordinated convertible debentures. The subordinated convertible debentures reflect the obligation to our
subsidiary that has issued the QUIPS. This subsidiary is not consolidated in our financial statements because we are not the primary beneficiary of the trust.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In June 2008, we, URNA, and certain of our subsidiaries entered into a credit agreement which provides for a five-year $1.25 billion senior secured
asset-based revolving credit facility (the ABL Facility), a portion of which is available for borrowing in Canadian dollars. The ABL Facility is subject, among other things, to the terms of a borrowing base derived from the value of
eligible rental equipment and eligible inventory. The borrowing base is subject to certain reserves and caps customary for financings of this type. All amounts borrowed under the credit agreement must be repaid on or before June 2013. In connection
with entering into the credit agreement, URNA repaid the $136 and $326 outstanding, respectively, under its former revolving credit facility and term loan, which were terminated. Loans under the credit agreement bear interest, at URNAs option:
(i) in the case of loans in U.S. Dollars, at a rate equal to the London interbank offered rate or an alternate base rate, in each case plus a spread, or (ii) in the case of loans in Canadian dollars, at a rate equal to the Canadian prime
rate or an alternate rate (Bankers Acceptance Rate), in each case plus a spread. The interest rates under the credit agreement are subject to change based on a total consolidated leverage ratio (a measurement of URNAs total debt to adjusted
EBITDA). A commitment fee accrues on any unused portion of the commitments under the credit agreement at a rate per annum based on usage. Ongoing extensions of credit under the credit agreement are subject to customary conditions, including
sufficient availability under the borrowing base. The credit agreement also contains covenants that, unless certain financial and other conditions are satisfied, require URNA to satisfy various financial tests and to maintain certain financial
ratios. In addition, the credit agreement contains customary negative covenants applicable to us, URNA and our subsidiaries, including negative covenants that restrict the ability of such entities to, among other things, (i) incur additional
indebtedness or engage in certain other types of financing transactions, (ii) allow certain liens to attach to assets, (iii) repurchase or pay dividends or make certain other restricted payments on capital stock and certain other
securities, or prepay certain indebtedness, and (iv) make acquisitions and investments. The U.S. Dollar borrowings under the credit agreement are secured by substantially all of our assets and substantially all of the assets of certain of
our U.S. subsidiaries (other than real property and certain accounts receivable). The U.S. Dollar borrowings under the credit agreement are guaranteed by us and by URNA and, subject to certain exceptions, our domestic subsidiaries. Borrowings
under the credit agreement by URNAs Canadian subsidiaries are also secured by substantially all the assets of URNAs Canadian subsidiaries and supported by guarantees from the Canadian subsidiaries. The credit agreement also includes
other covenants, representations, warranties, indemnities and events of default, that are customary for facilities of this type, including events of default relating to a change of control.

As previously discussed, in June 2008 we repurchased all of our outstanding Series C and Series D preferred stock for approximately $679. Pursuant to the
purchase agreement with the preferred holders, Holdings issued to the former preferred holders $425 aggregate principal amount of 14% Senior Notes due 2014 (14% HoldCo Notes) in partial payment of the repurchase price of the preferred
stock. The difference between the June 30, 2008 carrying value of the 14% HoldCo Notes and the $425 principal amount of the notes relates to a $13 original issue discount initially recognized in conjunction with the issuance of these notes.

The 14% HoldCo Notes were issued under a new indenture between the Company and The Bank of New York, as trustee, and are callable at par
by the Company at any time. The indenture contains covenants that are substantially similar to (and no more restrictive than) the covenants contained in the indentures governing URNAs high yield debt securities, including, among other things,
limitations on our and our subsidiaries ability to incur indebtedness, make certain restricted payments, issue preferred stock, enter into transactions with affiliates, create or incur liens, dispose of the proceeds of asset sales and restrict
the ability to pay dividends and enter into sale/leaseback transactions. These covenants include exceptions that would allow us to engage in these activities under certain conditions. The indenture also requires that, in the event of a change in
control (as defined in the indenture), we must make an offer to purchase all of the then outstanding 14% HoldCo Notes tendered at a purchase price in cash equal to 100 percent of the principal amount thereof plus accrued and unpaid interest, if any,
thereon.

6. Preferred Stock

As
previously discussed, in June 2008 we repurchased all of outstanding Series C Preferred and Series D preferred stock for approximately $679. In conjunction with the repurchase of the preferred stock, and in accordance with EITF Topic D-42, we
recorded a preferred stock redemption charge of $239 in the second quarter as a reduction of net income available



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to common stockholders. This charge, which is also reflected as a reduction of retained earnings in our accompanying condensed consolidated statements of
stockholders equity, primarily represents the difference between the fair value of the cash and note consideration issued to the preferred holders and the $431 carrying value of the preferred stock.

As a result of the preferred stock repurchase, our stockholders equity balance was reduced by $670 in the second quarter of 2008. The tender offer,
which was completed in July 2008, will result in an additional stockholders equity reduction of approximately $600 in the third quarter of 2008.

7. Legal and Regulatory Matters

SEC Non-Public Fact Finding Inquiry and Special Committee Review

In August 2004, we received a letter from the SEC in which the SEC referred to an inquiry of the Company. The letter transmitted a subpoena requesting
certain of our documents. The letter and the subpoena referred to an SEC investigation entitledIn the Matter of United Rentals, Inc. The notice from the SEC stated that the inquiry did not mean that the SEC had concluded that the Company or
anyone else had broken the law or that the SEC had a negative opinion of any person, entity or security. The inquiry appeared to relate to a broad range of our accounting practices and was not confined to a specific period.

In March 2005, our board of directors formed the Special Committee to review matters related to the SEC inquiry. The Special Committee retained
independent counsel. The board of directors received and acted upon findings of the Special Committee in January 2006. The actions that we took with respect to the Special Committees findings and actions that we took with respect to certain
other accounting matters, including the restatement of previously issued consolidated financial statements for 2003 and 2002, are discussed in our Annual Report on Form 10-K for the year ended December 31, 2005 (the 2005 Form 10-K).
We have provided documents in response to SEC subpoenas and informal requests as well as to the Special Committee, which has, in turn, provided documents to the SEC.

As previously reported, the Special Committees findings included, among others, that there were irregularities with respect to certain minor sale-leaseback transactions and trade packages to which the Company
was a party between 2000 and 2002. The Company restated its results for the years ended December 31, 2002 and December 31, 2003, and its originally reported retained earnings at December 31, 2001, to correct the accounting for the
minor sale-leaseback transactions and provided supplemental disclosure in the 2005 10-K regarding the trade packages (with respect to which documentation sufficient to permit a restatement did not exist). The Special Committee concluded that, based
on the evidence it reviewed, the practices regarding these minor sale-leaseback transactions and trade packages appeared to have been directed by the Companys two former chief financial officers. In December 2007, one of the former chief
financial officers, who left the Company in late 2002, pled guilty to making a false filing with the SEC in connection with the Companys annual report on Form 10-K for the year ended December 31, 2000 and settled a separate civil
enforcement action brought against him by the SEC alleging various violations of the securities laws. In April 2008, the other former chief financial officer, who was terminated in August 2005 after he failed to cooperate with the Special
Committees inquiry, was indicted and pled not guilty to conspiracy, securities fraud, insider trading and making false filings with the SEC in connection with the Companys annual reports on Form 10-K for the years ended December 31,
2001, December 31, 2002 and December 31, 2003. The SEC has also brought a separate civil enforcement action against him alleging various violations of the securities laws.

In July 2007, we received a letter from the staff of the SEC stating that the staff intended to recommend that the Commission authorize the staff to file
an injunctive action against the Company for alleged violations of provisions relating to the maintenance of books and records, internal accounting controls, and periodic filing requirements, as well as antifraud provisions, as set forth in
Section 17(a) of the Securities Act of 1933, as amended (the Securities Act), Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and Rules 10b- 5,
12b-20, 13a-1, 13a-11, 13a-13 and 13b2-1 thereunder. The letter states that the relief the staff may recommend includes permanent injunctions and civil penalties. Under SEC procedures, we have the opportunity to respond to the SEC staff before the
staff makes a formal recommendation as to whether any action should be brought by the SEC. The staffs letter also states that the staff intends to request authorization to engage in settlement discussions with the Company. We intend to
continue cooperating fully with the SEC in this matter.

As previously announced, the Company recognized a $14 charge in the current
quarter, in connection with the SEC inquiry. However, the inquiry is ongoing and the ultimate outcome is still uncertain.

The U.S.
Attorneys Office for the District of Connecticut has also requested information from the Company informally and by subpoena about matters related to the SEC inquiry. We are also cooperating fully with this office.



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We cannot predict the outcome of these inquiries as to the Company or when these matters might be
resolved.

Shareholder Class Action Lawsuits and Derivative Litigation

Following our public announcement of the SEC inquiry, three purported class action lawsuits were filed against the Company in the United States District Court for the District of Connecticut. The plaintiff in each of
the lawsuits initially sought to sue on behalf of a purported class comprised of purchasers of our securities from October 23, 2003 to August 30, 2004. The lawsuits initially named as the defendants the Company, our former chairman, our
vice chairman and then chief executive officer, our former president and chief financial officer, and our former corporate controller. These initial complaints alleged, among other things, that certain of our SEC filings and other public statements
contained false and misleading statements which resulted in damages to the plaintiffs and the members of the purported class when they purchased our securities. On the basis of those allegations, plaintiffs in each action asserted claims
(a) against all defendants under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and (b) against one or more of the individual defendants under Section 20(a) of the Exchange Act. The complaints sought unspecified
compensatory damages, costs and expenses. On February 1, 2005, the Court entered an order consolidating the three actions. On November 8, 2005, the Court appointed City of Pontiac Policemans and Firemans Retirement System as
lead plaintiff for the purported class. The consolidated action is now entitledIn re United Rentals, Inc. Securities Litigation.

On June 5, 2006, pursuant to a schedule agreed to by the parties and approved by the Court, lead plaintiff filed a consolidated amended complaint, which (a) added allegations relating to, among other things, the conclusions of the
Special Committee and other matters disclosed in the 2005 Form 10-K, (b) amended the purported class period to include purchasers of our securities from February 28, 2001 to August 30, 2004 and (c) named as an additional
defendant our first chief financial officer. In September 2006, we and certain of the individual defendants moved to dismiss the consolidated amended complaint in this action. Briefing with respect to these motions is now complete.

On March 10, 2008, we announced that we had entered into a memorandum of understanding with lead plaintiffs counsel to settle this action. The
memorandum of understanding provides that the claims of the purported plaintiff class will be settled for a cash payment of $27.5. The contemplated settlement is subject to the prior satisfaction of a number of conditions, including definitive
settlement documentation and court approval. In addition, the settlement is contingent upon the Company and its insurance carriers finalizing agreements on the portion of the settlement to be funded by the carriers, as well as the amounts that the
carriers will reimburse the Company for defense costs concerning the shareholder actions and related inquiries and matters that have previously been expensed by the Company. We cannot predict whether these conditions will be satisfied. The Company
currently expects, taking into account anticipated settlement funding and defense cost reimbursements from its insurance carriers, that the contemplated settlement will not have a material effect on its results of operations or cash flows for any
period.

In January 2005, an alleged shareholder filed an action in Connecticut State Superior Court, Judicial District of Norwalk/Stamford
at Stamford, purportedly suing derivatively on the Companys behalf. The action, entitledGregory Riegel v. John N. Milne, et al. , named as defendants certain of our current and/or former directors and/or officers, and named the Company
as a nominal defendant. The complaint asserted, among other things, that the defendants breached their fiduciary duties to the Company by causing or allowing the Company to disseminate misleading and inaccurate information to shareholders and the
market and by failing to establish and maintain adequate accounting controls, thus exposing the Company to damages. The complaint seeks unspecified compensatory damages, costs and expenses against the defendants. The parties to theRiegel
action have agreed that the proceedings in this action will be stayed pending the resolution of the motions to dismiss in the purported shareholder class actions.

In November 2004 we received a letter from counsel for an alleged shareholder, raising allegations similar to the ones set forth in the derivative complaint described above and demanding that the Company take action
in response to those allegations against certain of our current and/or former directors and/or officers. Following receipt of the letter, our board of directors formed a special committee to consider the letter. In August 2005, this alleged
shareholder commenced an action in Connecticut State Superior Court, Judicial District of Norwalk/Stamford at Stamford, purporting to sue derivatively on the Companys behalf. The action, entitledNathan Brundridge v. Leon D. Black, et
al. , initially named as defendants certain of our current and/or former directors and/or officers, and named the Company as a nominal defendant. The initial complaint in this action asserted, among other things, that all of the defendants
breached fiduciary obligations to the Company by causing or allowing the Company to disseminate misleading and inaccurate information to shareholders and the market, and by failing to establish and maintain adequate accounting controls, thus
exposing the Company to damages. The initial complaint in this action also asserted a claim for unjust enrichment against our former chairman and our vice chairman and then chief executive officer. The initial complaint sought unspecified
compensatory damages, equitable relief, costs and expenses



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against all of the defendants. The initial complaint also sought an order, in connection with plaintiffs unjust enrichment claim, directing the
defendants against whom that claim was asserted to disgorge certain compensation they received from us with respect to fiscal years 2001, 2002 and 2003.

On June 5, 2006, pursuant to a schedule agreed to by the parties, plaintiff in theBrundridge action filed an amended complaint that (a) added allegations relating to, among other things, the
conclusions of the Special Committee and other matters disclosed in the 2005 Form 10-K, and (b) named as an additional defendant our former president and chief financial officer and asserted the same claims against him as it previously asserted
and continued to assert against our former chairman and our vice chairman and then chief executive officer. In September 2006, we and certain of the individual defendants moved to dismiss the amended complaint in this action. In December 2006,
plaintiff in this action filed its opposition to these motions to dismiss. Subsequently, the parties agreed that the proceedings in this action will be stayed pending resolution of the motions to dismiss in the purported shareholder class actions.
The parties agreement provides that any party may terminate the stay at any time on 30 days written notice to the Court and all other parties, and defendants will have an opportunity to submit reply papers in further support of their
motions to dismiss this action after the termination of the stay.

In August 2005, another alleged shareholder filed an action in the
United States District Court for the District of Connecticut, purporting to sue derivatively on the Companys behalf. The action, entitledNatalie Gordon v. Wayland R. Hicks, et al. , named as defendants certain of our current and/or
former directors and/or officers, and named the Company as a nominal defendant. The initial complaint in this action asserted claims against each of the defendants for breach of fiduciary duty, abuse of control, gross mismanagement, waste of
corporate assets and unjust enrichment. Each of these claims is premised on, among other things, the theory that the individual defendants caused or permitted the Company to disseminate misleading and inaccurate information to shareholders and to
the market, and failed to establish and maintain adequate accounting controls, thus exposing the Company to damages. The initial complaint also asserted (a) a claim that a former director breached fiduciary obligations by selling shares of our
common stock while in possession of material, non-public information, and (b) a claim against our former chairman, our vice chairman and then chief executive officer, and our former president and chief financial officer for recovery of certain
incentive-based compensation under section 304 of the Sarbanes-Oxley Act (SOX 304). The initial complaint sought unspecified compensatory damages, equitable relief, restitution, costs and expenses against all of the defendants. The
initial complaint also sought an order declaring that the defendants against whom the SOX 304 claim was directed are liable under the Sarbanes-Oxley Act and directing them to reimburse us for all bonuses or other incentive-based or equity-based
compensation they received for the fiscal years 1999 through 2004.

On June 5, 2006, pursuant to a schedule agreed to by the parties
and approved by the Court, plaintiff in theGordon action filed an amended complaint, which (a) added allegations relating to, among other things, the conclusions of the Special Committee and other matters disclosed in the 2005 Form
10-K, and (b) named as additional defendants certain other of our current and/or former directors and/or officers. The amended complaint also asserted an additional claim against certain of our current and/or former directors for violation of
Section 14(a) of the Exchange Act. In September 2006, we and certain of the individual defendants moved to dismiss the amended complaint in this action.

On April 25, 2008, after the completion of briefing with respect to the motions to dismiss, plaintiff in theGordon action filed a notice to voluntarily dismiss the action, without prejudice, on the
consent of defendants, because she sold her Company securities and, therefore, would not likely have standing to pursue derivative claims on the Companys behalf. By order dated May 6, 2008, the Court approved the notice of dismissal in
the Gordon action, and dismissed that action without prejudice.

On May 29, 2008, we received a letter from counsel for an
alleged shareholder, asserting, among other things, that our board of directors and certain of our former officers engaged in gross mismanagement from 1998 to the date of the letter, and that our board has refused to take action against those former
officers allegedly responsible for our agreement to pay all or some portion of the $27.5 referred to in the memorandum of understanding between the Company and lead plaintiffs counsel in In re United Rentals, Inc. Securities Litigation.
The letter demands that we commence legal proceedings against any current or former director or officer who allegedly breached fiduciary duties to the Company and who violated the Sarbanes-Oxley Act and Section 14(a) of the Exchange Act, and
against a former officer of one of our equipment suppliers who allegedly facilitated certain transactions identified by the Special Committee as involving irregularities. The letter also demands that we commence an independent investigation into the
Boards agreement to enter into the memorandum of understanding.

Following our July 23, 2007 announcement of the merger
agreement with affiliates of Cerberus, two lawsuits against the proposed acquisition were filed. First, a putative class action complaint, entitledDonald Lefari v. United Rentals, Inc. et al. , was filed in Connecticut State Superior Court,
Judicial District of Stamford-Norwalk, on July 23, 2007 (the Lefari action). This lawsuit purports to be brought on behalf of all common stockholders of the Company, names the Company and



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all of our directors and Cerberus as defendants, and sought to enjoin the proposed acquisition of the Company by affiliates of Cerberus. On
September 19, 2007, the parties to theLefari action entered into a memorandum of understanding to settle the action and a settlement agreement was expected to be negotiated by the parties. On September 28, 2007, the second
lawsuit,Nathan Brundridge vs. Wayland R. Hicks et al. , was also filed in Connecticut State Superior Court, Judicial District of Stamford-Norwalk (the Brundridge II action). This lawsuit named our current directors as
defendants. On December 23, 2007, the Company terminated the merger agreement with affiliates of Cerberus. As a result, a condition precedent of the proposed settlement of theLefari action, the consummation of the proposed acquisition,
was not fulfilled. TheBrundridge II action was voluntarily withdrawn as to all defendants on January 30, 2008. On February 7, 2008, the parties to theLefari action filed a joint motion to withdraw with prejudice theLefari action, which is subject to the approval of the Court.

Subsequent to our November 14, 2007 announcement that
affiliates of Cerberus had notified us that they were not prepared to proceed with the purchase of the Company on the terms set forth in the merger agreement, three putative class action lawsuits were filed against the Company in the United States
District Court for the District of Connecticut. The plaintiff in each of the lawsuits sought to sue on behalf of a purported class of persons who purchased or otherwise acquired our securities between August 29, 2007 and November 14, 2007.
The lawsuits named as defendants the Company, our directors and certain of our officers and alleged, among other things, that the named plaintiff and members of the purported class suffered damages when they purchased or otherwise acquired
securities issued by the Company, as a result of false and misleading statements and/or material omissions relating to the contemplated merger with affiliates of Cerberus, contained in (a) proxy materials that the Company disseminated and/or
filed with the SEC in anticipation of the October 19, 2007 special meeting of stockholders; and/or (b) certain of the Companys filings with the SEC and other public statements. On the basis of those allegations, plaintiff in each
action asserted claims under Sections 10(b) and 14(a) of the Exchange Act and Rules 10b-5 and 14a-9 thereunder; and against the individual defendants under Section 20(a) of the Exchange Act. The complaints in these actions sought unspecified
compensatory damages, costs, expenses and fees. On February 7, 2008, the Court entered an order consolidating the three actions and appointing the Institutional Investor Group, consisting of First New York Securities, L.L.C. and Omni Partners
LLP, as lead plaintiffs for the purported class. The actions are now consolidated under the captionVincent DeCicco v. United Rentals, Inc., et al.

On March 24, 2008, pursuant to a schedule approved by the Court, lead plaintiffs filed a consolidated amended complaint, which, among other things, (a) amended the purported class period to include
purchasers of our publicly traded securities from July 23, 2007 to November 14, 2007, (b) dropped as defendants one of our officers and all but one of our directors, (c) named as additional defendants Cerberus, certain of its
affiliates, its chief executive officer and one of its managing directors, and (d) withdrew the previously asserted claim under Section 14(a) of the Exchange Act and Rule 14a-9 thereunder. On May 16, 2008, all defendants filed motions
to dismiss the consolidated amended complaint in this action. Briefing with respect to those motions is complete. We intend to defend against this action vigorously.

We are also subject to a number of claims and proceedings that generally arise in the ordinary conduct of our business. These matters include, but are not limited to, general liability claims (including personal
injury, product liability, and property and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations and contract and real estate matters. Based on advice of counsel and
available information, including current status or stage of proceeding, and taking into account accruals for matters where we have established them, we currently believe that any liabilities ultimately resulting from these ordinary course claims and
proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.



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8. Earnings Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding and, if dilutive, the Series C and Series D
preferred shares as if converted to common shares since such shares are participating securities. (As discussed in note 6 to our condensed consolidated financial statements, in June 2008 we repurchased all of our outstanding Series C and Series D
preferred stock and recorded a preferred stock redemption charge of $239.) Diluted earnings per share includes the impact of other diluted securities. The following table sets forth the computation of basic and diluted earnings per share (shares in
thousands):



|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|----------------------------------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------ | ---- | - | ------- |  | - | ------ | - |  | - | ------- | -
|                                                                                          |  | Three Months EndedJune 30, |        | Six Months EndedJune 30, |     
|                                                                                          |  | 2008                       |        |                          | 2007 |   | 2008    |  |   | 2007   |  
|Numerator:                                                                                |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Income from continuing operations                                                         |  | $                          | 37     |                          |      | $ | 67      |  | $ | 75     |   |  | $ | 99      |  
|Convertible debt interest                                                                 |  |                            |       |                          |      |   | 1       |  |   |       |   |  |   | 1       |  
|Subordinated convertible debt interest                                                    |  |                            |       |                          |      |   | 1       |  |   |       |   |  |   | 3       |  
|Preferred stock redemption charge                                                         |  |                            | (239   | )                        |      |   |        |  |   | (239   | ) |  |   |        |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|(Loss) income from continuing operations available to common stockholders                 |  |                            | (202   | )                        |      |   | 69      |  |   | (164   | ) |  |   | 103     |  
|Loss from discontinued operation, net of taxes                                            |  |                            |       |                          |      |   |        |  |   |       |   |  |   | (2      | )
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Net (loss) income available to common stockholders                                        |  | $                          | (202   | )                        |      | $ | 69      |  | $ | (164   | ) |  | $ | 101     |  
|Denominator:                                                                              |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Weighted-average common shares                                                            |  |                            | 86,419 |                          |      |   | 82,185  |  |   | 86,375 |   |  |   | 81,722  |  
|Series C preferred                                                                        |  |                            |       |                          |      |   | 12,000  |  |   |       |   |  |   | 12,000  |  
|Series D preferred                                                                        |  |                            |       |                          |      |   | 5,000   |  |   |       |   |  |   | 5,000   |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Denominator for basic earnings per shareweighted-average                                 |  |                            | 86,419 |                          |      |   | 99,185  |  |   | 86,375 |   |  |   | 98,722  |  
|Effect of dilutive securities:                                                            |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Employee stock options and warrants                                                       |  |                            |       |                          |      |   | 5,442   |  |   |       |   |  |   | 5,253   |  
|Convertible shares                                                                        |  |                            |       |                          |      |   | 6,461   |  |   |       |   |  |   | 6,461   |  
|Subordinated convertible debentures                                                       |  |                            |       |                          |      |   | 3,342   |  |   |       |   |  |   | 3,342   |  
|Restricted stock units and other                                                          |  |                            |       |                          |      |   | 538     |  |   |       |   |  |   | 496     |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Denominator for dilutive earnings per shareadjusted weighted-average shares              |  |                            | 86,419 |                          |      |   | 114,968 |  |   | 86,375 |   |  |   | 114,274 |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Basic earnings (loss) available to common stockholders:                                   |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|(Loss) income from continuing operations (inclusive of preferred stock redemption charge) |  | $                          | (2.33  | )                        |      | $ | 0.68    |  | $ | (1.89  | ) |  | $ | 1.01    |  
|Loss from discontinued operation                                                          |  |                            |       |                          |      |   |        |  |   |       |   |  |   | (0.02   | )
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Net (loss) income                                                                         |  | $                          | (2.33  | )                        |      | $ | 0.68    |  | $ | (1.89  | ) |  | $ | 0.99    |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Diluted earnings (loss) available to common stockholders:                                 |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|(Loss) income from continuing operations (inclusive of preferred stock redemption charge) |  | $                          | (2.33  | )                        |      | $ | 0.60    |  | $ | (1.89  | ) |  | $ | 0.90    |  
|Loss from discontinued operation                                                          |  |                            |       |                          |      |   |        |  |   |       |   |  |   | (0.02   | )
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  
|Net loss (income)                                                                         |  | $                          | (2.33  | )                        |      | $ | 0.60    |  | $ | (1.89  | ) |  | $ | 0.88    |  
|                                                                                          |  |                            |        |                          |      |   |         |  |   |        |   |  |   |         |  



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9. Condensed Consolidating Financial Information of Guarantor Subsidiaries

URNA is 100 percent owned by Holdings (the Parent) and has outstanding (i) certain indebtedness that is guaranteed by the Parent and
(ii) certain indebtedness that is guaranteed by both Parent and substantially all of URNAs United States subsidiaries (the guarantor subsidiaries). However, this indebtedness is not guaranteed by URNAs foreign
subsidiaries and certain of its United States subsidiaries (the non-guarantor subsidiaries). The guarantor subsidiaries are all 100 percent-owned and the guarantees are made on a joint and several basis and are full and unconditional
(subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under
fraudulent conveyance laws). Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors; however, condensed consolidating
financial information is presented. The condensed consolidating financial information of the Company and its subsidiaries is as follows:

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2008



|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|----------------------------------------- |  | ------ | ----- | ---- | - | ----- | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                          |  | Parent |       | URNA |   |       | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                    |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                 |  | $      |      |      | $ | 19    |                       |  | $ | 2                         |   |  | $                     | 59   |   |       | $ |       |   |  | $ | 80   
|Accounts receivable, net                  |  |        |      |      |   | (6    | )                     |  |   | 12                        |   |  |                       | 472  |   |       |   |       |   |  |   | 478  
|Intercompany receivable (payable)         |  |        |      |      |   | 21    |                       |  |   | 108                       |   |  |                       | (129 | ) |       |   |       |   |  |   |     
|Inventory                                 |  |        |      |      |   | 36    |                       |  |   | 38                        |   |  |                       | 20   |   |       |   |       |   |  |   | 94   
|Prepaid expenses and other assets         |  |        |      |      |   | 10    |                       |  |   | 60                        |   |  |                       | 2    |   |       |   |       |   |  |   | 72   
|Deferred taxes                            |  |        |      |      |   | 44    |                       |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 44   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                      |  |        |      |      |   | 124   |                       |  |   | 220                       |   |  |                       | 424  |   |       |   |       |   |  |   | 768  
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Rental equipment, net                     |  |        |      |      |   | 1,546 |                       |  |   | 1,064                     |   |  |                       | 326  |   |       |   |       |   |  |   | 2,936
|Property and equipment, net               |  |        | 46    |      |   | 205   |                       |  |   | 152                       |   |  |                       | 31   |   |       |   |       |   |  |   | 434  
|Investments in subsidiaries               |  |        | 1,920 |      |   | 2,776 |                       |  |   |                          |   |  |                       |     |   |       |   | (4,696 | ) |  |   |     
|Goodwill and other intangible assets, net |  |        |      |      |   | 182   |                       |  |   | 1,064                     |   |  |                       | 149  |   |       |   |       |   |  |   | 1,395
|Other non-current assets                  |  |        | 6     |      |   | 63    |                       |  |   | 6                         |   |  |                       | 1    |   |       |   |       |   |  |   | 76   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                              |  | $      | 1,972 |      | $ | 4,896 |                       |  | $ | 2,506                     |   |  | $                     | 931  |   |       | $ | (4,696 | ) |  | $ | 5,609
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY      |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt      |  | $      |      |      | $ | 12    |                       |  | $ |                          |   |  | $                     |     |   |       | $ |       |   |  | $ | 12   
|Accounts payable                          |  |        |      |      |   | 135   |                       |  |   | 133                       |   |  |                       | 43   |   |       |   |       |   |  |   | 311  
|Accrued expenses and other liabilities    |  |        |      |      |   | 278   |                       |  |   | 40                        |   |  |                       | 12   |   |       |   | (68    | ) |  |   | 262  
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                 |  |        |      |      |   | 425   |                       |  |   | 173                       |   |  |                       | 55   |   |       |   | (68    | ) |  |   | 585  
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Long-term debt                            |  |        | 412   |      |   | 2,083 |                       |  |   |                          |   |  |                       | 342  |   |       |   |       |   |  |   | 2,837
|Subordinated convertible debentures       |  |        | 146   |      |   |      |                       |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 146  
|Deferred taxes                            |  |        |      |      |   | 536   |                       |  |   | (9                        | ) |  |                       | 35   |   |       |   |       |   |  |   | 562  
|Other liabilities                         |  |        |      |      |   |      |                       |  |   | 65                        |   |  |                       |     |   |       |   |       |   |  |   | 65   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                         |  |        | 558   |      |   | 3,044 |                       |  |   | 229                       |   |  |                       | 432  |   |       |   | (68    | ) |  |   | 4,195
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                |  |        | 1,414 |      |   | 1,852 |                       |  |   | 2,277                     |   |  |                       | 499  |   |       |   | (4,628 | ) |  |   | 1,414
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity              |  | $      | 1,972 |      | $ | 4,896 |                       |  | $ | 2,506                     |   |  | $                     | 931  |   |       | $ | (4,696 | ) |  | $ | 5,609
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      



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CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2007



|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|----------------------------------------- |  | ------ | ----- | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                          |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                    |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                 |  | $      |      |      | $ |                      |  | $ | 25                        |   |  | $                     | 79   |   |       | $ |       |   |  | $ | 104  
|Accounts receivable, net                  |  |        |      |      |   | 20                    |  |   | (22                       | ) |  |                       | 555  |   |       |   |       |   |  |   | 553  
|Intercompany receivable (payable)         |  |        |      |      |   | 449                   |  |   | 73                        |   |  |                       | (522 | ) |       |   |       |   |  |   |     
|Inventory                                 |  |        |      |      |   | 78                    |  |   | 64                        |   |  |                       | 20   |   |       |   |       |   |  |   | 162  
|Prepaid expenses and other assets         |  |        |      |      |   | 13                    |  |   | 44                        |   |  |                       | 4    |   |       |   |       |   |  |   | 61   
|Deferred taxes                            |  |        |      |      |   | 48                    |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 48   
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                      |  |        |      |      |   | 608                   |  |   | 184                       |   |  |                       | 136  |   |       |   |       |   |  |   | 928  
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Rental equipment, net                     |  |        |      |      |   | 1,560                 |  |   | 1,018                     |   |  |                       | 304  |   |       |   |       |   |  |   | 2,882
|Property and equipment, net               |  |        | 44    |      |   | 120                   |  |   | 200                       |   |  |                       | 35   |   |       |   |       |   |  |   | 399  
|Investments in subsidiaries               |  |        | 1,797 |      |   | 2,454                 |  |   |                          |   |  |                       |     |   |       |   | (4,251 | ) |  |   |     
|Goodwill and other intangible assets, net |  |        |      |      |   | 186                   |  |   | 1,065                     |   |  |                       | 146  |   |       |   |       |   |  |   | 1,397
|Other non-current assets                  |  |        | 7     |      |   | 45                    |  |   | 10                        |   |  |                       |     |   |       |   |       |   |  |   | 62   
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                              |  | $      | 1,848 |      | $ | 4,973                 |  | $ | 2,477                     |   |  | $                     | 621  |   |       | $ | (4,251 | ) |  | $ | 5,668
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY      |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt      |  | $      |      |      | $ | 121                   |  | $ |                          |   |  | $                     |     |   |       | $ |       |   |  | $ | 121  
|Accounts payable                          |  |        |      |      |   | 153                   |  |   | 153                       |   |  |                       | 42   |   |       |   |       |   |  |   | 348  
|Accrued expenses and other liabilities    |  |        |      |      |   | 229                   |  |   | 106                       |   |  |                       | 11   |   |       |   | (83    | ) |  |   | 263  
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                 |  |        |      |      |   | 503                   |  |   | 259                       |   |  |                       | 53   |   |       |   | (83    | ) |  |   | 732  
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Long-term debt                            |  |        |      |      |   | 2,259                 |  |   |                          |   |  |                       | 250  |   |       |   |       |   |  |   | 2,509
|Subordinated convertible debentures       |  |        | 146   |      |   |                      |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 146  
|Deferred taxes                            |  |        |      |      |   | 423                   |  |   | (9                        | ) |  |                       | 35   |   |       |   |       |   |  |   | 449  
|Other liabilities                         |  |        |      |      |   | 74                    |  |   | 56                        |   |  |                       |     |   |       |   |       |   |  |   | 130  
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                         |  |        | 146   |      |   | 3,259                 |  |   | 306                       |   |  |                       | 338  |   |       |   | (83    | ) |  |   | 3,966
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                |  |        | 1,702 |      |   | 1,714                 |  |   | 2,171                     |   |  |                       | 283  |   |       |   | (4,168 | ) |  |   | 1,702
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity              |  | $      | 1,848 |      | $ | 4,973                 |  | $ | 2,477                     |   |  | $                     | 621  |   |       | $ | (4,251 | ) |  | $ | 5,668
|                                          |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      



18



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##### Table of Contents

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2007



|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|----------------------------------------- |  | ------ | ----- | ---- | - | ----- | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                          |  | Parent |       | URNA |   |       | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                    |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                 |  | $      |      |      | $ | 325   |                       |  | $ |                          |   |  | $                     | 56   |   |       | $ |       |   |  | $ | 381  
|Accounts receivable, net                  |  |        |      |      |   | (9    | )                     |  |   | 6                         |   |  |                       | 522  |   |       |   |       |   |  |   | 519  
|Intercompany receivable (payable)         |  |        |      |      |   | 83    |                       |  |   | 103                       |   |  |                       | (186 | ) |       |   |       |   |  |   |     
|Inventory                                 |  |        |      |      |   | 36    |                       |  |   | 43                        |   |  |                       | 12   |   |       |   |       |   |  |   | 91   
|Prepaid expenses and other assets         |  |        |      |      |   | 15    |                       |  |   | 38                        |   |  |                       | 4    |   |       |   |       |   |  |   | 57   
|Deferred taxes                            |  |        |      |      |   | 72    |                       |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 72   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                      |  |        |      |      |   | 522   |                       |  |   | 190                       |   |  |                       | 408  |   |       |   |       |   |  |   | 1,120
|Rental equipment, net                     |  |        |      |      |   | 1,465 |                       |  |   | 1,045                     |   |  |                       | 316  |   |       |   |       |   |  |   | 2,826
|Property and equipment, net               |  |        | 46    |      |   | 209   |                       |  |   | 154                       |   |  |                       | 31   |   |       |   |       |   |  |   | 440  
|Investments in subsidiaries               |  |        | 2,112 |      |   | 2,915 |                       |  |   |                          |   |  |                       |     |   |       |   | (5,027 | ) |  |   |     
|Goodwill and other intangible assets, net |  |        |      |      |   | 184   |                       |  |   | 1,066                     |   |  |                       | 154  |   |       |   |       |   |  |   | 1,404
|Other long-term assets                    |  |        | 6     |      |   | 41    |                       |  |   | 5                         |   |  |                       |     |   |       |   |       |   |  |   | 52   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                              |  | $      | 2,164 |      | $ | 5,336 |                       |  | $ | 2,460                     |   |  | $                     | 909  |   |       | $ | (5,027 | ) |  | $ | 5,842
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY      |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt      |  | $      |      |      | $ | 15    |                       |  | $ |                          |   |  | $                     |     |   |       | $ |       |   |  | $ | 15   
|Accounts payable                          |  |        |      |      |   | 59    |                       |  |   | 110                       |   |  |                       | 26   |   |       |   |       |   |  |   | 195  
|Accrued expenses and other liabilities    |  |        |      |      |   | 307   |                       |  |   | 58                        |   |  |                       | 31   |   |       |   | (86    | ) |  |   | 310  
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                 |  |        |      |      |   | 381   |                       |  |   | 168                       |   |  |                       | 57   |   |       |   | (86    | ) |  |   | 520  
|Long-term debt                            |  |        |      |      |   | 2,415 |                       |  |   |                          |   |  |                       | 140  |   |       |   |       |   |  |   | 2,555
|Subordinated convertible debentures       |  |        | 146   |      |   |      |                       |  |   |                          |   |  |                       |     |   |       |   |       |   |  |   | 146  
|Deferred taxes                            |  |        |      |      |   | 514   |                       |  |   | (9                        | ) |  |                       | 34   |   |       |   |       |   |  |   | 539  
|Other long-term liabilities               |  |        |      |      |   |      |                       |  |   | 64                        |   |  |                       |     |   |       |   |       |   |  |   | 64   
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                         |  |        | 146   |      |   | 3,310 |                       |  |   | 223                       |   |  |                       | 231  |   |       |   | (86    | ) |  |   | 3,824
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                |  |        | 2,018 |      |   | 2,026 |                       |  |   | 2,237                     |   |  |                       | 678  |   |       |   | (4,941 | ) |  |   | 2,018
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity              |  | $      | 2,164 |      | $ | 5,336 |                       |  | $ | 2,460                     |   |  | $                     | 909  |   |       | $ | (5,027 | ) |  | $ | 5,842
|                                          |  |        |       |      |   |       |                       |  |   |                           |   |  |                       |      |   |       |   |        |   |  |   |      



19



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##### Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2008



|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | ------------------------- | --- |  | --------------------- | --- | - | ----- | - | --- | - |  | - | ---
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |     |   | Total
|Revenues:                                                           |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Equipment rentals                                                   |  | $      |    |   |      | $ | 300                   |  | $                         | 245 |  | $                     | 76  |   |       | $ |    |   |  | $ | 621
|Sales of rental equipment                                           |  |        |    |   |      |   | 37                    |  |                           | 23  |  |                       | 8   |   |       |   |    |   |  |   | 68 
|New equipment sales                                                 |  |        |    |   |      |   | 20                    |  |                           | 15  |  |                       | 11  |   |       |   |    |   |  |   | 46 
|Contractor supplies sales                                           |  |        |    |   |      |   | 22                    |  |                           | 27  |  |                       | 10  |   |       |   |    |   |  |   | 59 
|Service and other revenues                                          |  |        |    |   |      |   | 20                    |  |                           | 12  |  |                       | 5   |   |       |   |    |   |  |   | 37 
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Total revenues                                                      |  |        |    |   |      |   | 399                   |  |                           | 322 |  |                       | 110 |   |       |   |    |   |  |   | 831
|Cost of revenues:                                                   |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 130                   |  |                           | 123 |  |                       | 38  |   |       |   |    |   |  |   | 291
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 56                    |  |                           | 41  |  |                       | 13  |   |       |   |    |   |  |   | 110
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 28                    |  |                           | 15  |  |                       | 5   |   |       |   |    |   |  |   | 48 
|Cost of new equipment sales                                         |  |        |    |   |      |   | 19                    |  |                           | 12  |  |                       | 8   |   |       |   |    |   |  |   | 39 
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 16                    |  |                           | 21  |  |                       | 8   |   |       |   |    |   |  |   | 45 
|Cost of service and other revenues                                  |  |        |    |   |      |   | 8                     |  |                           | 5   |  |                       | 2   |   |       |   |    |   |  |   | 15 
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Total cost of revenues                                              |  |        |    |   |      |   | 257                   |  |                           | 217 |  |                       | 74  |   |       |   |    |   |  |   | 548
|Gross profit                                                        |  |        |    |   |      |   | 142                   |  |                           | 105 |  |                       | 36  |   |       |   |    |   |  |   | 283
|Selling, general and administrative expenses                        |  |        | 1   |   |      |   | 57                    |  |                           | 40  |  |                       | 28  |   |       |   |    |   |  |   | 126
|Provision relating to SEC inquiry                                   |  |        | 14  |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |    |   |  |   | 14 
|Non-rental depreciation and amortization                            |  |        | 4   |   |      |   | 4                     |  |                           | 6   |  |                       | 1   |   |       |   |    |   |  |   | 15 
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Operating income                                                    |  |        | (19 | ) |      |   | 81                    |  |                           | 59  |  |                       | 7   |   |       |   |    |   |  |   | 128
|Interest expense, net                                               |  |        | 4   |   |      |   | 43                    |  |                           |    |  |                       | 1   |   |       |   |    |   |  |   | 48 
|Interest expense- subordinated convertible debentures               |  |        | 3   |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |    |   |  |   | 3  
|Other expense (income), net                                         |  |        | (17 | ) |      |   | 17                    |  |                           | 11  |  |                       | (10 | ) |       |   |    |   |  |   | 1  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Income from continuing operations before provision for income taxes |  |        | (9  | ) |      |   | 21                    |  |                           | 48  |  |                       | 16  |   |       |   |    |   |  |   | 76 
|Provision for income taxes                                          |  |        | 2   |   |      |   | 9                     |  |                           | 20  |  |                       | 8   |   |       |   |    |   |  |   | 39 
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|(Loss) income before equity in net earnings of subsidiaries         |  |        | (11 | ) |      |   | 12                    |  |                           | 28  |  |                       | 8   |   |       |   |    |   |  |   | 37 
|Equity in net earnings of subsidiaries                              |  |        | 48  |   |      |   | 36                    |  |                           |    |  |                       |    |   |       |   | (84 | ) |  |   |   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    
|Net income (loss)                                                   |  | $      | 37  |   |      | $ | 48                    |  | $                         | 28  |  | $                     | 8   |   |       | $ | (84 | ) |  | $ | 37 
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |     |   |  |   |    



20



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##### Table of Contents

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2007



|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|------------------------------------------------------------------- |  | ------ | -- | - | ---- | - | --------------------- |  | ------------------------- | --- |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | --- | -
|                                                                    |  | Parent |    |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |     |   | Total |  
|Revenues:                                                           |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Equipment rentals                                                   |  | $      |   |   |      | $ | 329                   |  | $                         | 259 |  | $                     | 71  |   |       | $ |     |   |  | $ | 659 |  
|Sales of rental equipment                                           |  |        |   |   |      |   | 43                    |  |                           | 30  |  |                       | 10  |   |       |   |     |   |  |   | 83  |  
|New equipment sales                                                 |  |        |   |   |      |   | 32                    |  |                           | 25  |  |                       | 10  |   |       |   |     |   |  |   | 67  |  
|Contractor supplies sales                                           |  |        |   |   |      |   | 46                    |  |                           | 51  |  |                       | 14  |   |       |   |     |   |  |   | 111 |  
|Service and other revenues                                          |  |        |   |   |      |   | 22                    |  |                           | 15  |  |                       | 5   |   |       |   |     |   |  |   | 42  |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Total revenues                                                      |  |        |   |   |      |   | 472                   |  |                           | 380 |  |                       | 110 |   |       |   |     |   |  |   | 962 |  
|Cost of revenues:                                                   |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Cost of equipment rentals, excluding depreciation                   |  |        |   |   |      |   | 143                   |  |                           | 120 |  |                       | 36  |   |       |   |     |   |  |   | 299 |  
|Depreciation of rental equipment                                    |  |        |   |   |      |   | 55                    |  |                           | 41  |  |                       | 12  |   |       |   |     |   |  |   | 108 |  
|Cost of rental equipment sales                                      |  |        |   |   |      |   | 32                    |  |                           | 21  |  |                       | 7   |   |       |   |     |   |  |   | 60  |  
|Cost of new equipment sales                                         |  |        |   |   |      |   | 26                    |  |                           | 21  |  |                       | 9   |   |       |   |     |   |  |   | 56  |  
|Cost of contractor supplies sales                                   |  |        |   |   |      |   | 38                    |  |                           | 39  |  |                       | 12  |   |       |   |     |   |  |   | 89  |  
|Cost of service and other revenues                                  |  |        |   |   |      |   | 10                    |  |                           | 6   |  |                       | 2   |   |       |   |     |   |  |   | 18  |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Total cost of revenues                                              |  |        |   |   |      |   | 304                   |  |                           | 248 |  |                       | 78  |   |       |   |     |   |  |   | 630 |  
|Gross profit                                                        |  |        |   |   |      |   | 168                   |  |                           | 132 |  |                       | 32  |   |       |   |     |   |  |   | 332 |  
|Selling, general and administrative expenses                        |  |        |   |   |      |   | 53                    |  |                           | 75  |  |                       | 19  |   |       |   |     |   |  |   | 147 |  
|Non-rental depreciation and amortization                            |  |        | 2  |   |      |   | 6                     |  |                           | 4   |  |                       | 1   |   |       |   |     |   |  |   | 13  |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Operating income                                                    |  |        | (2 | ) |      |   | 109                   |  |                           | 53  |  |                       | 12  |   |       |   |     |   |  |   | 172 |  
|Interest expense, net                                               |  |        |   |   |      |   | 53                    |  |                           |    |  |                       | 2   |   |       |   |     |   |  |   | 55  |  
|Interest expense- subordinated convertible debentures               |  |        | 3  |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |     |   |  |   | 3   |  
|Other expense (income), net                                         |  |        |   |   |      |   | 11                    |  |                           | 4   |  |                       | (17 | ) |       |   |     |   |  |   | (2  | )
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Income from continuing operations before provision for income taxes |  |        | (5 | ) |      |   | 45                    |  |                           | 49  |  |                       | 27  |   |       |   |     |   |  |   | 116 |  
|Provision for income taxes                                          |  |        | (2 | ) |      |   | 20                    |  |                           | 20  |  |                       | 11  |   |       |   |     |   |  |   | 49  |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|(Loss) income before equity in net earnings of subsidiaries         |  |        | (3 | ) |      |   | 25                    |  |                           | 29  |  |                       | 16  |   |       |   |     |   |  |   | 67  |  
|Equity in net earnings of subsidiaries                              |  |        | 70 |   |      |   | 45                    |  |                           |    |  |                       |    |   |       |   | (115 | ) |  |   |    |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Net income (loss)                                                   |  | $      | 67 |   |      | $ | 70                    |  | $                         | 29  |  | $                     | 16  |   |       | $ | (115 | ) |  | $ | 67  |  
|                                                                    |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  



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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2008



|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | ------------------------- | --- |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | -----
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |     |   | Total
|Revenues:                                                           |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Equipment rentals                                                   |  | $      |    |   |      | $ | 576                   |  | $                         | 468 |  | $                     | 148 |   |       | $ |     |   |  | $ | 1,192
|Sales of rental equipment                                           |  |        |    |   |      |   | 72                    |  |                           | 48  |  |                       | 14  |   |       |   |     |   |  |   | 134  
|New equipment sales                                                 |  |        |    |   |      |   | 40                    |  |                           | 28  |  |                       | 20  |   |       |   |     |   |  |   | 88   
|Contractor supplies sales                                           |  |        |    |   |      |   | 42                    |  |                           | 53  |  |                       | 20  |   |       |   |     |   |  |   | 115  
|Service and other revenues                                          |  |        |    |   |      |   | 39                    |  |                           | 25  |  |                       | 10  |   |       |   |     |   |  |   | 74   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Total revenues                                                      |  |        |    |   |      |   | 769                   |  |                           | 622 |  |                       | 212 |   |       |   |     |   |  |   | 1,603
|Cost of revenues:                                                   |  |        |    |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 255                   |  |                           | 238 |  |                       | 73  |   |       |   |     |   |  |   | 566  
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 110                   |  |                           | 81  |  |                       | 26  |   |       |   |     |   |  |   | 217  
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 55                    |  |                           | 33  |  |                       | 9   |   |       |   |     |   |  |   | 97   
|Cost of new equipment sales                                         |  |        |    |   |      |   | 34                    |  |                           | 23  |  |                       | 16  |   |       |   |     |   |  |   | 73   
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 32                    |  |                           | 41  |  |                       | 16  |   |       |   |     |   |  |   | 89   
|Cost of service and other revenues                                  |  |        |    |   |      |   | 16                    |  |                           | 10  |  |                       | 4   |   |       |   |     |   |  |   | 30   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Total cost of revenues                                              |  |        |    |   |      |   | 502                   |  |                           | 426 |  |                       | 144 |   |       |   |     |   |  |   | 1,072
|Gross profit                                                        |  |        |    |   |      |   | 267                   |  |                           | 196 |  |                       | 68  |   |       |   |     |   |  |   | 531  
|Selling, general and administrative expenses                        |  |        | 1   |   |      |   | 112                   |  |                           | 94  |  |                       | 50  |   |       |   |     |   |  |   | 257  
|Provision relating to SEC inquiry                                   |  |        | 14  |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |     |   |  |   | 14   
|Non-rental depreciation and amortization                            |  |        | 7   |   |      |   | 10                    |  |                           | 11  |  |                       | 2   |   |       |   |     |   |  |   | 30   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Operating income                                                    |  |        | (22 | ) |      |   | 145                   |  |                           | 91  |  |                       | 16  |   |       |   |     |   |  |   | 230  
|Interest expense, net                                               |  |        | 4   |   |      |   | 82                    |  |                           |    |  |                       | 3   |   |       |   |     |   |  |   | 89   
|Interest expense- subordinated convertible debentures               |  |        | 5   |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |     |   |  |   | 5    
|Other expense (income), net                                         |  |        | (32 | ) |      |   | 31                    |  |                           | 24  |  |                       | (22 | ) |       |   |     |   |  |   | 1    
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Income from continuing operations before provision for income taxes |  |        | 1   |   |      |   | 32                    |  |                           | 67  |  |                       | 35  |   |       |   |     |   |  |   | 135  
|Provision for income taxes                                          |  |        | 6   |   |      |   | 13                    |  |                           | 27  |  |                       | 14  |   |       |   |     |   |  |   | 60   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|(Loss) income before equity in net earnings of subsidiaries         |  |        | (5  | ) |      |   | 19                    |  |                           | 40  |  |                       | 21  |   |       |   |     |   |  |   | 75   
|Equity in net earnings of subsidiaries                              |  |        | 80  |   |      |   | 61                    |  |                           |    |  |                       |    |   |       |   | (141 | ) |  |   |     
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      
|Net income (loss)                                                   |  | $      | 75  |   |      | $ | 80                    |  | $                         | 40  |  | $                     | 21  |   |       | $ | (141 | ) |  | $ | 75   
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |      



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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2007



|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --- | --------------------- |  | ------------------------- | --- |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | ----- | -
|                                                                    |  | Parent |     |   | URNA |   |     | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |     |   | Total |  
|Revenues:                                                           |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Equipment rentals                                                   |  | $      |    |   |      | $ | 608 |                       |  | $                         | 489 |  | $                     | 129 |   |       | $ |     |   |  | $ | 1,226 |  
|Sales of rental equipment                                           |  |        |    |   |      |   | 84  |                       |  |                           | 62  |  |                       | 19  |   |       |   |     |   |  |   | 165   |  
|New equipment sales                                                 |  |        |    |   |      |   | 59  |                       |  |                           | 44  |  |                       | 18  |   |       |   |     |   |  |   | 121   |  
|Contractor supplies sales                                           |  |        |    |   |      |   | 85  |                       |  |                           | 95  |  |                       | 25  |   |       |   |     |   |  |   | 205   |  
|Service and other revenues                                          |  |        |    |   |      |   | 43  |                       |  |                           | 31  |  |                       | 9   |   |       |   |     |   |  |   | 83    |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Total revenues                                                      |  |        |    |   |      |   | 879 |                       |  |                           | 721 |  |                       | 200 |   |       |   |     |   |  |   | 1,800 |  
|Cost of revenues:                                                   |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 279 |                       |  |                           | 233 |  |                       | 66  |   |       |   |     |   |  |   | 578   |  
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 107 |                       |  |                           | 80  |  |                       | 23  |   |       |   |     |   |  |   | 210   |  
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 62  |                       |  |                           | 43  |  |                       | 13  |   |       |   |     |   |  |   | 118   |  
|Cost of new equipment sales                                         |  |        |    |   |      |   | 47  |                       |  |                           | 38  |  |                       | 15  |   |       |   |     |   |  |   | 100   |  
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 73  |                       |  |                           | 72  |  |                       | 22  |   |       |   |     |   |  |   | 167   |  
|Cost of service and other revenues                                  |  |        |    |   |      |   | 20  |                       |  |                           | 11  |  |                       | 4   |   |       |   |     |   |  |   | 35    |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Total cost of revenues                                              |  |        |    |   |      |   | 588 |                       |  |                           | 477 |  |                       | 143 |   |       |   |     |   |  |   | 1,208 |  
|Gross profit                                                        |  |        |    |   |      |   | 291 |                       |  |                           | 244 |  |                       | 57  |   |       |   |     |   |  |   | 592   |  
|Selling, general and administrative expenses                        |  |        |    |   |      |   | 112 |                       |  |                           | 144 |  |                       | 40  |   |       |   |     |   |  |   | 296   |  
|Non-rental depreciation and amortization                            |  |        | 4   |   |      |   | 10  |                       |  |                           | 9   |  |                       | 2   |   |       |   |     |   |  |   | 25    |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Operating income                                                    |  |        | (4  | ) |      |   | 169 |                       |  |                           | 91  |  |                       | 15  |   |       |   |     |   |  |   | 271   |  
|Interest expense, net                                               |  |        |    |   |      |   | 98  |                       |  |                           |    |  |                       | 4   |   |       |   |     |   |  |   | 102   |  
|Interest expense- subordinated convertible debentures               |  |        | 5   |   |      |   |    |                       |  |                           |    |  |                       |    |   |       |   |     |   |  |   | 5     |  
|Other expense (income), net                                         |  |        |    |   |      |   | 20  |                       |  |                           | 9   |  |                       | (31 | ) |       |   |     |   |  |   | (2    | )
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations before provision for income taxes |  |        | (9  | ) |      |   | 51  |                       |  |                           | 82  |  |                       | 42  |   |       |   |     |   |  |   | 166   |  
|Provision for income taxes                                          |  |        | (4  | ) |      |   | 22  |                       |  |                           | 32  |  |                       | 17  |   |       |   |     |   |  |   | 67    |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations                                   |  |        | (5  | ) |      |   | 29  |                       |  |                           | 50  |  |                       | 25  |   |       |   |     |   |  |   | 99    |  
|(Income) loss from discontinued operation, net of taxes             |  |        |    |   |      |   | (2  | )                     |  |                           | 4   |  |                       |    |   |       |   |     |   |  |   | 2     |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|(Loss) income before equity in net earnings of subsidiaries         |  |        | (5  | ) |      |   | 31  |                       |  |                           | 46  |  |                       | 25  |   |       |   |     |   |  |   | 97    |  
|Equity in net earnings of subsidiaries                              |  |        | 102 |   |      |   | 71  |                       |  |                           |    |  |                       |    |   |       |   | (173 | ) |  |   |      |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  
|Net income (loss)                                                   |  | $      | 97  |   |      | $ | 102 |                       |  | $                         | 46  |  | $                     | 25  |   |       | $ | (173 | ) |  | $ | 97    |  
|                                                                    |  |        |     |   |      |   |     |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |       |  



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CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Six Months Ended June 30, 2008



|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|---------------------------------------------------- |  | ------ | --- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | ----- |  | - | - |  | - | ---- | -
|                                                     |  | Parent |     |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      | Total | 
|Net cash (used in) provided by operating activities  |  |        | (11 | ) |      |   | 92   |                       |  |   | 151                       |   |  |                       | 215  |       |  |   |  |  |   | 447  |  
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash used in investing activities                |  |        | (2  | ) |      |   | (161 | )                     |  |   | (149                      | ) |  |                       | (18  | )     |  |   |  |  |   | (330 | )
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash provided by (used in) financing activities  |  |        | 13  |   |      |   | (237 | )                     |  |   |                          |   |  |                       | (193 | )     |  |   |  |  |   | (417 | )
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Effect of foreign exchange rates                     |  |        |    |   |      |   |     |                       |  |   |                          |   |  |                       | (1   | )     |  |   |  |  |   | (1   | )
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net (decrease) increase in cash and cash equivalents |  |        |    |   |      |   | (306 | )                     |  |   | 2                         |   |  |                       | 3    |       |  |   |  |  |   | (301 | )
|Cash and cash equivalents at beginning of period     |  |        |    |   |      |   | 325  |                       |  |   |                          |   |  |                       | 56   |       |  |   |  |  |   | 381  |  
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Cash and cash equivalents at end of period           |  | $      |    |   |      | $ | 19   |                       |  | $ | 2                         |   |  | $                     | 59   |       |  | $ |  |  | $ | 80   |  
|                                                     |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  



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CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Six Months Ended June 30, 2007



|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|------------------------------------------------------------------------- |  | ------ | -- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | ----- |  | - | - |  | - | ---- | -
|                                                                          |  | Parent |    |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     | Total | 
|Net cash provided by (used in) operating activitiescontinuing operations |  | $      | 4  |   |      | $ | 141  |                       |  | $ | 200                       |   |  | $                     | (22 | )     |  | $ |  |  | $ | 323  |  
|Net cash provided by operating activitiesdiscontinued operation          |  |        |   |   |      |   |     |                       |  |   | 6                         |   |  |                       |    |       |  |   |  |  |   | 6    |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash provided by (used in) operating activities                       |  |        | 4  |   |      |   | 141  |                       |  |   | 206                       |   |  |                       | (22 | )     |  |   |  |  |   | 329  |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash used in investing activitiescontinuing operations               |  |        | (9 | ) |      |   | (252 | )                     |  |   | (185                      | ) |  |                       | (60 | )     |  |   |  |  |   | (506 | )
|Net cash provided by investing activitiesdiscontinued operation          |  |        |   |   |      |   | 68   |                       |  |   | 1                         |   |  |                       |    |       |  |   |  |  |   | 69   |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash used in investing activities                                     |  |        | (9 | ) |      |   | (184 | )                     |  |   | (184                      | ) |  |                       | (60 | )     |  |   |  |  |   | (437 | )
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash provided by financing activities                                 |  |        | 5  |   |      |   | 3    |                       |  |   |                          |   |  |                       | 80  |       |  |   |  |  |   | 88   |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Effect of foreign exchange rates                                          |  |        |   |   |      |   |     |                       |  |   |                          |   |  |                       | 5   |       |  |   |  |  |   | 5    |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net (decrease) increase in cash and cash equivalents                      |  |        |   |   |      |   | (40  | )                     |  |   | 22                        |   |  |                       | 3   |       |  |   |  |  |   | (15  | )
|Cash and cash equivalents at beginning of period                          |  |        |   |   |      |   | 40   |                       |  |   | 3                         |   |  |                       | 76  |       |  |   |  |  |   | 119  |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Cash and cash equivalents at end of period                                |  | $      |   |   |      | $ |     |                       |  | $ | 25                        |   |  | $                     | 79  |       |  | $ |  |  | $ | 104  |  
|                                                                          |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions, except per share data and unless otherwise indicated)
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

Executive Overview

We are the largest equipment rental company in the world with an integrated network of 668 rental locations in the United States, Canada and Mexico. Although the equipment rental industry is highly fragmented and diverse, we believe we are
well positioned to take advantage of this environment because as a larger company we have more resources and certain competitive advantages over smaller competitors. These advantages include greater purchasing power, the ability to provide customers
with a broader range of equipment and services as well as with newer and better maintained equipment, and greater flexibility to transfer equipment among branches.

We offer for rent over 2,900 classes of rental equipment, including construction equipment, industrial and heavy machinery, aerial work platforms, trench safety equipment and homeowner items. Our revenues are derived
from the following sources: equipment rentals, sales of used rental equipment, sales of new equipment, contractor supplies sales and service and other. In 2007, rental equipment revenues represented 71 percent of our total revenues. We expect this
percentage to increase to approximately 75 percent in 2008 as we continue to reposition our contractor supplies business.

In the second
half of 2007, we began to implement a change in strategy aimed at growing our earnings at higher margins, while also continuing to generate significant cash flow. The three key elements of this strategy are: refocusing our employees and sales
representatives on our core rental business; optimizing the management of our rental fleet; and reducing our operating costs. We believe this strategy, coupled with our broad geographic footprint, extensive rental fleet, advanced information
technology systems, disciplined purchasing power, industry experience and ability to deliver extraordinary customer service, will enable us to strengthen our leadership position in the equipment rental industry and improve our returns to
shareholders.

In June 2008, we commenced a modified Dutch auction tender offer in which we offered to purchase up to
27.16 million shares of our common stock at a price not less than $22.00 nor greater than $25.00 per share. The tender offer expired in July 2008 and, in accordance with the terms of the offer, we accepted for payment an aggregate of
27.16 million shares of our common stock at a price of $22.00 per share, for a total cost of $598 (excluding fees and expenses). The number of shares of common stock purchased in the tender offer represented approximately 31 percent of the
total common stock outstanding on the last full trading day prior to the commencement of the offer.

Also in June 2008, and in connection
with our announcement of the tender offer, we repurchased all of our outstanding Series C and Series D preferred stock, a substantial majority of which was held by Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P. Prior to this
preferred stock repurchase, a majority of the preferred holders had the right to consent to certain transactions by us, including the aforementioned tender offer. Under the definitive repurchase agreement, the total purchase price for the preferred
stock was approximately $679, a portion of which was settled through the issuance by Holdings of new 14% Senior Notes due 2014 (14% HoldCo Notes). In addition, and as a result of the repurchase of the preferred stock, Leon Black and
Michael Gross, the two company directors elected by the former preferred holders in accordance with the terms of the Series C preferred stock, resigned from our board. Also in June 2008, we, URNA, and certain of our subsidiaries entered into a
credit agreement which provides for a new $1.25 billion senior secured asset-based revolving credit facility, in connection with which URNA repaid the amounts outstanding under its former revolving credit facility and term loan. See notes 5 and 6 to
our condensed consolidated financial statements for additional information concerning the new asset-based revolving credit facility and the repurchase of the preferred stock, respectively.

As discussed in note 7 to our condensed consolidated financial statements and elsewhere in this report, the Company is subject to certain ongoing class
action and derivative suits, as well as the subject of an SEC inquiry. The U.S. Attorneys office has also requested information from the Company about matters related to the SEC inquiry. As discussed further below (see Provision
relating to SEC inquiry), in the second quarter of 2008 we established an accrual of $14, representing our best estimate for the liability associated with the SEC inquiry. Other than this accrual, we have not accrued any amounts related to the
ultimate disposition of these matters to date and any liabilities resulting from an adverse judgment or settlement of these matters may be material to our results of operations and cash flows during the period incurred. Other costs associated with
the SEC inquiry, the U.S. Attorneys office inquiry and the class action and derivative suits, including reimbursement of attorneys fees incurred by indemnified officers and directors, are expensed as incurred.



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Financial Overview

Income from continuing operations. Income from continuing operations and diluted (loss) earnings per share from continuing operations available to common stockholders for the three and six months ended
June 30, 2008 and 2007 were as follows:



|                                                                                                              |  |                            |       |                          |      |   |      |  |   |       |   |  |   |     
|------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ----- | ------------------------ | ---- | - | ---- |  | - | ----- | - |  | - | ----
|                                                                                                              |  | Three Months EndedJune 30, |       | Six Months EndedJune 30,
|                                                                                                              |  | 2008                       |       |                          | 2007 |   | 2008 |  |   | 2007 
|Income from continuing operations                                                                             |  | $                          | 37    |                          |      | $ | 67   |  | $ | 75    |   |  | $ | 99  
|Diluted (loss) earnings per share from continuing operations (inclusive of preferred stock redemption charge) |  | $                          | (2.33 | )                        |      | $ | 0.60 |  | $ | (1.89 | ) |  | $ | 0.90

For the three and six months ended June 30, 2008, income from continuing operations of $37
and $75 decreased by $30 and $24, respectively, from the same periods in 2007. The decline in profitability primarily reflects lower equipment rental gross profit due to the softening construction environment. Additionally, the decline reflects
reduced sales of contractor supplies, consistent with our strategy to focus on the higher margin core rental business, as well as lower new and used equipment sales. Income from continuing operations for the three and six months ended June 30,
2008 also includes a provision of $14 after-tax relating to the SEC inquiry. We were able to partially offset the impact of these factors with savings realized from our ongoing initiatives to reduce operating costs. As discussed further below, our
selling, general and administrative expenses declined by $21, or 14 percent, and $39, or 13 percent, respectively, for the three and six months ended June 30, 2008.

Diluted (loss) earnings per share from continuing operations of $(2.33) and $(1.89) for the three and six months ended June 30, 2008, respectively, include the following items: (i) a $2.76 per diluted share
preferred stock redemption charge associated with the June 2008 repurchase of our Series C and Series D preferred stock, (ii) a $0.16 per diluted share charge associated with the SEC inquiry, and (iii) a $0.09 per diluted share charge
primarily related to the establishment of a valuation allowance related to certain foreign tax credits.

EBITDA GAAP
Reconciliation.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. Management believes EBITDA provides useful information about operating performance and period-over-period growth. However, EBITDA is not a measure of financial performance or liquidity under GAAP and
accordingly 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 income from continuing operations before
provision for income taxes and EBITDA.



|                                                                    |  |                            |     |                          |   |      |  |      |     |  |   |    
|------------------------------------------------------------------- |  | -------------------------- | --- | ------------------------ | - | ---- |  | ---- | --- |  | - | ---
|                                                                    |  | Three Months EndedJune 30, |     | Six Months EndedJune 30,
|                                                                    |  | 2008                       |     | 2007                     |   | 2008 |  | 2007
|Income from continuing operations before provision for income taxes |  | $                          | 76  |                          | $ | 116  |  | $    | 135 |  | $ | 166
|Interest expense, net                                               |  |                            | 48  |                          |   | 55   |  |      | 89  |  |   | 102
|Interest expense  subordinated convertible debentures              |  |                            | 3   |                          |   | 3    |  |      | 5   |  |   | 5  
|Depreciation  rental equipment                                     |  |                            | 110 |                          |   | 108  |  |      | 217 |  |   | 210
|Non-rental depreciation and amortization                            |  |                            | 15  |                          |   | 13   |  |      | 30  |  |   | 25 
|                                                                    |  |                            |     |                          |   |      |  |      |     |  |   |    
|EBITDA                                                              |  | $                          | 252 |                          | $ | 295  |  | $    | 476 |  | $ | 508
|                                                                    |  |                            |     |                          |   |      |  |      |     |  |   |    

For the three and six months ended June 30, 2008, EBITDA decreased $43, or 15 percent, and
$32, or 6 percent, respectively, primarily reflecting lower equipment rental gross profit due to the softening construction environment. The EBITDA declines also reflect reduced sales of contractor supplies as well as lower new and used equipment
sales, consistent



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with our strategy to focus on the higher margin core rental business. In addition, EBITDA for the three and six months ended June 30, 2008 includes a
provision of $14 relating to the SEC inquiry. We were able to partially offset the impact of these factors with savings realized from our ongoing initiatives to reduce operating costs.

Results of Operations

As discussed in note 2 to our unaudited condensed consolidated financial
statements, our reportable segments are general rentals and trench safety, pump and power. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The general
rentals segments customers include construction and industrial companies, manufacturers, utilities, municipalities and homeowners. The general rentals segment operates throughout the United States and Canada and has one location in Mexico. The
trench safety, pump and power segment includes the rental of specialty construction products and related services. The trench safety, pump and power segments customers include construction companies involved in infrastructure projects,
municipalities and industrial companies. This segment operates in the United States and has one location in Canada.

These segments align
our external segment reporting with how management evaluates and allocates resources. We evaluate segment performance based on segment operating results.

Our revenues and operating results fluctuate from quarter to quarter reflecting the seasonal rental patterns of our customers, with rental activity tending to be lower in the winter.

Revenues by segment were as follows:



|                                 |  |                |       |                              |   |       |  |   |      
|-------------------------------- |  | -------------- | ----- | ---------------------------- | - | ----- |  | - | -----
|                                 |  | Generalrentals |       | Trench safety,pump and power |   | Total
|Three months ended June 30, 2008 |  |                |       |                              |   |       |  |   |      
|Equipment rentals                |  | $              | 580   |                              | $ | 41    |  | $ | 621  
|Sales of rental equipment        |  |                | 64    |                              |   | 4     |  |   | 68   
|Sales of new equipment           |  |                | 44    |                              |   | 2     |  |   | 46   
|Contractor supplies sales        |  |                | 56    |                              |   | 3     |  |   | 59   
|Service and other                |  |                | 37    |                              |   |      |  |   | 37   
|                                 |  |                |       |                              |   |       |  |   |      
|Total revenue                    |  | $              | 781   |                              | $ | 50    |  | $ | 831  
|                                 |  |                |       |                              |   |       |  |   |      
|Three months ended June 30, 2007 |  |                |       |                              |   |       |  |   |      
|Equipment rentals                |  | $              | 614   |                              | $ | 45    |  | $ | 659  
|Sales of rental equipment        |  |                | 79    |                              |   | 4     |  |   | 83   
|Sales of new equipment           |  |                | 63    |                              |   | 4     |  |   | 67   
|Contractor supplies sales        |  |                | 107   |                              |   | 4     |  |   | 111  
|Service and other                |  |                | 41    |                              |   | 1     |  |   | 42   
|                                 |  |                |       |                              |   |       |  |   |      
|Total revenue                    |  | $              | 904   |                              | $ | 58    |  | $ | 962  
|                                 |  |                |       |                              |   |       |  |   |      
|Six months ended June 30, 2008   |  |                |       |                              |   |       |  |   |      
|Equipment rentals                |  | $              | 1,115 |                              | $ | 77    |  | $ | 1,192
|Sales of rental equipment        |  |                | 127   |                              |   | 7     |  |   | 134  
|Sales of new equipment           |  |                | 84    |                              |   | 4     |  |   | 88   
|Contractor supplies sales        |  |                | 110   |                              |   | 5     |  |   | 115  
|Service and other                |  |                | 72    |                              |   | 2     |  |   | 74   
|                                 |  |                |       |                              |   |       |  |   |      
|Total revenue                    |  | $              | 1,508 |                              | $ | 95    |  | $ | 1,603
|                                 |  |                |       |                              |   |       |  |   |      
|Six months ended June 30, 2007   |  |                |       |                              |   |       |  |   |      
|Equipment rentals                |  | $              | 1,143 |                              | $ | 83    |  | $ | 1,226
|Sales of rental equipment        |  |                | 158   |                              |   | 7     |  |   | 165  
|Sales of new equipment           |  |                | 114   |                              |   | 7     |  |   | 121  
|Contractor supplies sales        |  |                | 197   |                              |   | 8     |  |   | 205  
|Service and other                |  |                | 81    |                              |   | 2     |  |   | 83   
|                                 |  |                |       |                              |   |       |  |   |      
|Total revenue                    |  | $              | 1,693 |                              | $ | 107   |  | $ | 1,800
|                                 |  |                |       |                              |   |       |  |   |      



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Three months ended June 30, 2008 and 2007. 2008 equipment rentals of $621 decreased $38, or 6
percent, reflecting a 1.4 percent decrease in rental rates, a 0.8 percentage point decrease in time utilization, and a change in mix. Equipment rentals represented 75 percent of total revenues for the three months ended June 30, 2008. On a
segment basis, equipment rentals represented approximately 74 percent and 82 percent of total revenues for general rentals and trench safety, pump and power, respectively. General rentals equipment rentals decreased $34, or 6 percent, reflecting a
5.4 percent decrease in same-store rental revenues. Trench safety, pump and power equipment rentals decreased $4, or 9 percent, reflecting a 6.0 percent decrease in same-store rental revenues.

Six months ended June 30, 2008 and 2007. 2008 equipment rentals of $1,192 decreased $34, or 3 percent, reflecting a 1.1 percent decline in
rental rates and a change in mix. Equipment rentals represented 74 percent of total revenues for the six months ended June 30, 2008. On a segment basis, equipment rentals represented approximately 74 percent and 81 percent of total revenues for
general rentals and trench safety, pump and power, respectively. General rentals equipment rentals decreased $28, or 2 percent, reflecting a 2.5 percent decrease in same-store rental revenues. Trench safety, pump and power equipment rentals
decreased $6, or 7 percent, reflecting a 5.8 percent decrease in same-store rental revenues.

Sales of rental equipment. For the
three and six months ended June 30, 2008, sales of rental equipment represented 8 percent of our total revenues and our general rentals segment accounted for approximately 95 percent of these sales. Sales of rental equipment for trench safety,
pump and power were insignificant. For the three and six months ended June 30, 2008, sales of rental equipment decreased approximately 19 percent, primarily reflecting a decline in the volume of equipment sold as we focus on selling older
assets, in line with our life-cycle management strategy.

Sales of new equipment. For the three and six months ended June 30,
2008, sales of new equipment represented approximately 6 percent of our total revenues and our general rentals segment accounted for 96 percent of these sales. Sales of new equipment for trench safety, pump and power were insignificant. For the
three and six months ended June 30, 2008, sales of new equipment decreased 31 and 27 percent, respectively, primarily reflecting lower volume.

Sales of contractor supplies.Sales of contractor supplies represent our revenues associated with selling a variety of supplies including construction consumables, tools, small equipment and safety supplies. Consistent with sales of
rental and new equipment, general rentals accounts for substantially all of our contractor supplies sales. For the three and six months ended June 30, 2008, sales of contractor supplies decreased 47 and 44 percent, respectively, compared to the
same periods in 2007. Consistent with our strategy of refocusing our contractor supplies business, the decline reflects a reduction in the volume of supplies sold, partially offset by improved pricing. The decline in volume is consistent with the
reduction in our product offering (fewer SKUs are offered in our catalogue).

Service and other. Service and other primarily
represents our revenues earned from providing repair and maintenance services (including parts sales). Consistent with sales of rental and new equipment as well as sales of contractor supplies, general rentals accounts for substantially all of our
service and other revenue. For the three and six months ended June 30, 2008, service and other revenue decreased approximately 11 percent, primarily reflecting reduced revenues from selling parts and licensing software.

Segment Operating Income

Segment operating income
and operating margin were as follows:



|                                 |  |                |      |   |                              |   |      |       |  |   |      |  
|-------------------------------- |  | -------------- | ---- | - | ---------------------------- | - | ---- | ----- |  | - | ---- | -
|                                 |  | Generalrentals |      |   | Trench safety,pump and power |   |      | Total | 
|Three months ended June 30, 2008 |  |                |      |   |                              |   |      |       |  |   |      |  
|Operating Income                 |  | $              | 115  |   |                              | $ | 13   |       |  | $ | 128  |  
|Operating Margin                 |  |                | 14.7 | % |                              |   | 26.0 | %     |  |   | 15.4 | %
|Three months ended June 30, 2007 |  |                |      |   |                              |   |      |       |  |   |      |  
|Operating Income                 |  | $              | 157  |   |                              | $ | 15   |       |  | $ | 172  |  
|Operating Margin                 |  |                | 17.4 | % |                              |   | 25.9 | %     |  |   | 17.9 | %
|Six months ended June 30, 2008   |  |                |      |   |                              |   |      |       |  |   |      |  
|Operating Income                 |  | $              | 208  |   |                              | $ | 22   |       |  | $ | 230  |  
|Operating Margin                 |  |                | 13.8 | % |                              |   | 23.2 | %     |  |   | 14.3 | %
|Six months ended June 30, 2007   |  |                |      |   |                              |   |      |       |  |   |      |  
|Operating Income                 |  | $              | 246  |   |                              | $ | 25   |       |  | $ | 271  |  
|Operating Margin                 |  |                | 14.5 | % |                              |   | 23.4 | %     |  |   | 15.1 | %

General rentals. For the three and six months ended June 30, 2008, operating
income decreased $42 and $38, respectively, and operating margin decreased 2.7 and 0.7 percentage points, respectively, primarily reflecting reduced gross margin from equipment rentals and the $14 charge associated with the ongoing SEC inquiry.



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Trench safety, pump and power. For the three and six months ended June 30, 2008,
operating income decreased by $2 and $3, respectively, and operating margin increased by 0.1 percentage points and decreased by 0.2 percentage points, respectively, reflecting slightly improved gross margin performance offset by reduced selling,
general and administrative leverage.

Gross Margin. Gross margins by revenue classification were as follows:



|                          |  |                            |   |  |                          |   |  |      |   |  |      |  
|------------------------- |  | -------------------------- | - |  | ------------------------ | - |  | ---- | - |  | ---- | -
|                          |  | Three Months EndedJune 30, |   |  | Six Months EndedJune 30, |  
|                          |  | 2008                       |   |  | 2007                     |   |  | 2008 |   |  | 2007 |  
|Total gross margin        |  | 34.1                       | % |  | 34.5                     | % |  | 33.1 | % |  | 32.9 | %
|Equipment rentals         |  | 35.4                       | % |  | 38.2                     | % |  | 34.3 | % |  | 35.7 | %
|Sales of rental equipment |  | 29.4                       | % |  | 27.7                     | % |  | 27.6 | % |  | 28.5 | %
|Sales of new equipment    |  | 15.2                       | % |  | 16.4                     | % |  | 17.0 | % |  | 17.4 | %
|Contractor supplies sales |  | 23.7                       | % |  | 19.8                     | % |  | 22.6 | % |  | 18.5 | %
|Service and other         |  | 59.5                       | % |  | 57.1                     | % |  | 59.5 | % |  | 57.8 | %

For the three months ended June 30, 2008, total gross margin decreased 0.4 percentage points,
primarily reflecting reduced gross margin from equipment rentals, partially offset by improved gross margin on contractor supplies sales. Equipment rentals gross margin decreased 2.8 percentage points, reflecting revenue declines in excess of
savings realized from cost savings initiatives. The improvement in gross margin on contractor supplies sales of 3.9 percentage points primarily reflects improvements in pricing and product mix.

For the six months ended June 30, 2008, total gross margin increased 0.2 percentage points, primarily reflecting improved gross margin on contractor
supplies, partially offset by reduced gross margin on equipment rentals. The gross margin improvement in contractor supplies sales of 4.1 percentage points primarily reflects improvements in pricing and product mix. Equipment rentals gross margin
decreased 1.4 percentage points, reflecting revenue declines in excess of savings realized from cost savings initiatives.

Selling,
general and administrative expenses (SG&A). SG&A expense information for the three and six months ended June 30, 2008 and 2007 was as follows:



|                                |  |                            |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|------------------------------- |  | -------------------------- | ---- | - | ------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                |  | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |  
|                                |  | 2008                       |      |   | 2007                     |   |      | 2008 |  |   | 2007 |  
|Total SG&A expenses             |  | $                          | 126  |   |                          | $ | 147  |      |  | $ | 257  |   |  | $ | 296  |  
|SG&A as a percentage of revenue |  |                            | 15.2 | % |                          |   | 15.3 | %    |  |   | 16.0 | % |  |   | 16.4 | %

SG&A expense primarily includes sales force compensation, bad debt expense, information
technology costs, advertising and marketing expenses, professional fees, management salaries and clerical and administrative overhead. For the three months ended June 30, 2008, SG&A expense of $126 decreased $21 as compared to 2007. This
improvement reflects the benefits we are realizing from our cost saving initiatives, including reduced compensation costs and travel expenses, partially offset by normal inflationary increases.

For the six months ended June 30, 2008, SG&A expense of $257 decreased $39 as compared to 2007. This improvement reflects the benefits we are
realizing from our cost-saving initiatives, including reduced compensation costs and travel expenses, partially offset by normal inflationary increases.

Provision relating to SEC inquiry.Our results for the three and six months ended June 30, 2008 include a $14 charge, representing our best estimate for the liability associated with the SEC
inquiry. See note 7 to our condensed consolidated financial statements for additional information concerning the status of this inquiry as well as related matters.



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Interest expense, net for the three and six months ended June 30, 2008 and 2007 was as
follows:



|                      |  |                            |    |                          |   |      |  |      |    |  |   |    
|--------------------- |  | -------------------------- | -- | ------------------------ | - | ---- |  | ---- | -- |  | - | ---
|                      |  | Three Months EndedJune 30, |    | Six Months EndedJune 30,
|                      |  | 2008                       |    | 2007                     |   | 2008 |  | 2007
|Interest expense, net |  | $                          | 48 |                          | $ | 55   |  | $    | 89 |  | $ | 102

Interest expense for the three and six months ended June 30, 2008 decreased by $7 and $13,
respectively, primarily relating to the decline in interest rates applicable to our variable rate debt, partially offset by increased interest expense associated with the recently issued 14% HoldCo Notes (see- Liquidity and Capital
Resources below) as well as the write-off of debt issuance costs associated with the retirement of our former credit facility.

Income taxes. The following table summarizes our continuing operations provision for income taxes and the related effective tax rate for the three and six months ended June 30, 2008 and 2007:



|                                  |  |                            |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|--------------------------------- |  | -------------------------- | ---- | - | ------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                  |  | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |  
|                                  |  | 2008                       |      |   | 2007                     |   |      | 2008 |  |   | 2007 |  
|Income from continuing operations |  | $                          | 76   |   |                          | $ | 116  |      |  | $ | 135  |   |  | $ | 166  |  
|Provision for income taxes        |  |                            | 39   |   |                          |   | 49   |      |  |   | 60   |   |  |   | 67   |  
|Effective tax rate                |  |                            | 51.3 | % |                          |   | 42.2 | %    |  |   | 44.4 | % |  |   | 40.4 | %

The difference between the consolidated effective tax rates and the U.S. federal statutory income
tax rate of 35 percent primarily relates to state taxes as well as certain non-deductible charges. During the second quarter of 2008, we established a valuation allowance of $6 related to foreign tax credits that, as a result of the preferred stock
redemption, are no longer expected to be realized. This charge is net of the federal tax benefit that results from a deduction for the foreign taxes. Additionally, during the second quarter of 2008, no tax benefit was provided for the $14 provision
relating to the SEC inquiry. In addition to these matters, during the second quarter of 2007, we recorded a charge of $3 within the income tax provision related to the restricted stock grant referred to in the following paragraph.

Between June 2001 and March 31, 2007, we had been recognizing a tax benefit on compensation expense associated with a restricted stock award made to
Mr. Hicks in June 2001. Because this award vested for tax purposes in 2002 and because Section 162(m) of the Internal Revenue Code limits the deductibility of a portion of his compensation, no tax benefit should have been recognized.
Accordingly, our results for the second quarter of 2007 include a charge of $3 within the income tax provision, representing the reversal of the cumulative income tax benefit recognized in prior periods. The second quarter of 2007 effective tax
rate also reflects a non-deductible charge of $5 within SG&A for the remaining amortization of this award.

Our effective tax rate is
based on recurring factors including the geographical mix of income before taxes and the related tax rates in those jurisdictions. In addition, our effective tax rate will change based on discrete or other nonrecurring events (such as audit
settlements) that may not be predictable.

Liquidity and Capital Resources

Liquidity. We manage our liquidity using internal cash management practices, which are subject to (i) the policies and cooperation of the
financial institutions we utilize to maintain and provide cash management services, (ii) the terms and other requirements of the agreements to which we are a party and (iii) the statutes, regulations and practices of each of the local
jurisdictions in which we operate.

As previously discussed, in June 2008 we commenced a modified Dutch auction tender offer in
which we offered to purchase up to 27.16 million shares of our common stock. The tender offer expired in July 2008 and, in accordance with the terms of the offer, we accepted for payment an aggregate of 27.16 shares of our common stock at a
price of $22.00 per share, for a total cost of $598 (excluding fees and expenses). Also in June 2008, and in connection with our announcement of the tender offer, we repurchased all of outstanding Series C and Series D preferred stock for
approximately $679. Pursuant to the purchase agreement with the preferred holders, Holdings issued to the former preferred holders $425 aggregate principal amount of the 14% HoldCo Notes, in partial payment of the repurchase price of the preferred
stock.

In anticipation of the share repurchases, in June 2008 we, URNA, and certain of our subsidiaries, entered into a new $1.25 billion
senior secured asset-based revolving credit facility (the ABL Facility), a portion of which is available in Canadian dollars, and repaid the $462 outstanding under our former revolving credit facility and term loan. The balance of the
amounts necessary for the share repurchases, the repayment of our former credit facility and term loan, as well as related



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fees and expenses, was funded with existing cash on hand and through borrowings under the ABL Facility and our existing accounts receivable securitization
facility. For additional information concerning the ABL Facility and the 14% HoldCo Notes, see note 5 to our condensed consolidated financial statements.

Our principal existing sources of cash are cash generated from operations, including from the sale of rental equipment, and borrowings available under our new asset-based loan facility and receivables securitization
facility. As of June 30, 2008, we had (i) $997 of borrowing capacity available under our ABL Facility, (ii) $85 of borrowing capacity available under our receivables securitization facility and (iii) cash and cash equivalents of
$80. Cash equivalents at June 30, 2008 consist of high quality, low risk investments and do not include any auction rate securities. Following the closing and funding of our tender offer in July 2008, we had approximately (i) $480 of
borrowing capacity available under our ABL Facility, (ii) $34 of borrowing capacity available under our receivables securitization facility and (iii) cash and cash equivalents of approximately $60. We believe that our existing sources of
cash will be sufficient to support our existing operations over the next twelve months.

We expect that our principal needs for cash
relating to our existing operations over the next twelve months will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under
operating leases and (iv) debt service, including the planned retirement of $125 of our 14% HoldCo Notes at the end of the 2008 third quarter. We plan to fund such cash requirements from borrowings under our ABL Facility, our existing accounts
receivable securitization facility and existing sources of cash.

Loan Covenants and Compliance.As of June 30, 2008, we
were in compliance with the covenants and other provisions of our ABL Facility, the senior notes, the subordinated convertible debentures and our accounts receivables securitization facility. Any failure to be in compliance with any material
provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.

Sources and Uses of
Cash  Continuing Operations.During the six months ended June 30, 2008, we (i) generated cash from operating activities of $447 and (ii) generated cash from the sale of rental equipment of $134. We used cash
during this period principally to (i) purchase rental equipment of $437, (ii) purchase other property and equipment of $32, (iii) redeem our preferred stock of $254 and (iv) fund payments, net of proceeds, on debt of $133. During
the six months ended June 30, 2007, we (i) generated cash from operating activities of $323, (ii) generated cash from the sale of rental equipment of $165 and (iii) received proceeds, net of payments, on debt of $62.
Additionally, we generated cash from the sale of our discontinued operation of $68. We used cash during this period principally to (i) purchase rental equipment of $604, (ii) purchase other property and equipment of $53 and
(iii) purchase other companies for $21.

Free Cash Flow GAAP Reconciliation.We define free cash flow as
(i) net cash provided by operating activities less (ii) purchases of rental and non-rental equipment plus (iii) proceeds from sales of rental and non-rental equipment and excess tax benefits from share-based payment arrangements.
Management believes free cash flow provides useful 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 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 net
cash provided by operating activities and free cash flow.



|                                                                |  |                          |      |   |      |   |      |  
|--------------------------------------------------------------- |  | ------------------------ | ---- | - | ---- | - | ---- | -
|                                                                |  | Six Months EndedJune 30, |     
|                                                                |  | 2008                     |      |   | 2007 |  
|Net cash provided by operating activitiescontinuing operations |  | $                        | 447  |   |      | $ | 323  |  
|Purchases of rental equipment                                   |  |                          | (437 | ) |      |   | (604 | )
|Purchases of non-rental equipment                               |  |                          | (32  | ) |      |   | (53  | )
|Proceeds from sales of rental equipment                         |  |                          | 134  |   |      |   | 165  |  
|Proceeds from sales of non-rental equipment                     |  |                          | 5    |   |      |   | 7    |  
|Excess tax benefits from share-based payment arrangements       |  |                          |     |   |      |   | 10   |  
|                                                                |  |                          |      |   |      |   |      |  
|Free cash flow                                                  |  | $                        | 117  |   |      | $ | (152 | )
|                                                                |  |                          |      |   |      |   |      |  

Free cash flow generation for the six months ended June 30, 2008 was $117, an increase of
$269 as compared to free cash flow usage of $152 in the six months ended June 30, 2007. The year-over-year increase in free cash flow primarily reflects reduced capital expenditures.



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Our credit ratings as of July 24, 2008 were as follows:



|        |  |                  |  |                      
|------- |  | ---------------- |  | ---------------------
|        |  | Corporate Rating |  | Outlook              
|Moodys |  | B1               |  | Negative             
|S&P     |  | BB-              |  | Credit Watch/Negative
|Fitch   |  | B+               |  | Stable               

Both our ability to obtain financing and the related cost of borrowing are affected by our credit
ratings, which are periodically reviewed by these rating agencies. Our current credit ratings are below investment grade and we expect our access to the public debt markets to be limited to the non-investment grade segment.

Certain Information Concerning Contractual Obligations. The table below provides certain information concerning the payments coming due
under certain categories of our existing contractual obligations as of June 30, 2008:



|                                        |  |      |     |      |   |      |  |      |     |      |   |                    |  |       |       |  |   |       |  |   |      
|--------------------------------------- |  | ---- | --- | ---- | - | ---- |  | ---- | --- | ---- | - | ------------------ |  | ----- | ----- |  | - | ----- |  | - | -----
|                                        |  | 2008 |     | 2009 |   | 2010 |  | 2011 |     | 2012 |   | 2013 andThereafter |  | Total
|Debt and capital leases (1)             |  | $    | 14  |      | $ | 11   |  | $    | 8   |      | $ | 3                  |  | $     | 1,000 |  | $ | 1,813 |  | $ | 2,849
|Interest due on debt (2)                |  |      | 105 |      |   | 211  |  |      | 211 |      |   | 210                |  |       | 172   |  |   | 208   |  |   | 1,117
|Operating leases (1):                   |  |      |     |      |   |      |  |      |     |      |   |                    |  |       |       |  |   |       |  |   |      
|Real estate                             |  |      | 42  |      |   | 75   |  |      | 64  |      |   | 55                 |  |       | 47    |  |   | 167   |  |   | 450  
|Rental equipment                        |  |      | 2   |      |   | 3    |  |      |    |      |   |                   |  |       |      |  |   |      |  |   | 5    
|Non-rental equipment                    |  |      | 23  |      |   | 30   |  |      | 24  |      |   | 16                 |  |       | 10    |  |   | 4     |  |   | 107  
|Purchase obligations (3)                |  |      | 145 |      |   |     |  |      |    |      |   |                   |  |       |      |  |   |      |  |   | 145  
|Subordinated convertible debentures (4) |  |      | 4   |      |   | 9    |  |      | 9   |      |   | 9                  |  |       | 9     |  |   | 296   |  |   | 336  
|                                        |  |      |     |      |   |      |  |      |     |      |   |                    |  |       |       |  |   |       |  |   |      
|Total (5)                               |  | $    | 335 |      | $ | 339  |  | $    | 316 |      | $ | 293                |  | $     | 1,238 |  | $ | 2,488 |  | $ | 5,009
|                                        |  |      |     |      |   |      |  |      |     |      |   |                    |  |       |       |  |   |       |  |   |      



|(1) | The payments due with respect to a period represent (i) in the case of debt and capital leases, the scheduled principal payments due in such period, and (ii) in the case
of operating leases, the minimum lease payments due in such period under non-cancelable operating leases plus the maximum potential guarantee amounts associated with some of our non-rental equipment operating leases for which we guarantee that the
value of the equipment at the end of the lease term will not be less than a specified projected residual value.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Estimated interest payments have been calculated based on the principal amount of debt and the effective interest rates as of June 30, 2008. The estimated interest payments do
not reflect our plan to retire $125 of our new 14% Senior Notes at the end of the third quarter.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | As of June 30, 2008, we had outstanding purchase orders with our equipment and inventory suppliers. These purchase orders, which were negotiated in the ordinary course of
business, aggregate approximately $145. These purchase commitments can be cancelled by us, generally with 30 days notice and without cancellation penalties. The equipment and inventory receipts from the suppliers for these purchases and
related payments to the suppliers are expected to be completed throughout 2008 and 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Includes interest payments.
|--- | ---------------------------



|(5) | This information excludes $7 of unrecognized tax benefits which are discussed further in note 3 to our condensed consolidated financial statements. It is not possible to estimate
the time period during which these amounts may be paid to tax authorities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Relationship between Holdings and URNA.Holdings is principally a holding company and primarily conducts its operations through its wholly owned subsidiary, URNA, and subsidiaries of URNA. Holdings provides certain services to URNA in connection with its operations. These services
principally include: (i) senior management services, (ii) finance and tax related services and support, (iii) information technology systems and support, (iv) acquisition related services, (v) legal services and
(vi) human resource support. In addition, Holdings leases certain equipment and real property that are made available for use by URNA and its subsidiaries.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

Our exposure to market risk primarily consists of (1) interest rate risk associated with our variable rate debt and (2) foreign currency exchange rate risk primarily associated with our Canadian operations.

Interest Rate Risk. During 2007 and earlier periods, we utilized interest rate swap agreements and interest rate cap agreements to manage
our interest costs and exposure to changes in interest rates. As of December 31, 2007, we had swap agreements with an aggregate notional amount of $1.2 billion. The effect of the swap agreements were, at December 31, 2007, to convert $1.2
billion of our fixed rate notes to floating rate instruments. In January 2008, we terminated all of our interest rate swap agreements and made a payment of $4.



33



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##### Table of Contents

As of June 30, 2008, we had an aggregate of $341 of indebtedness that bears interest at variable
rates. As of June 30, 2008, the variable rate debt included $135 of borrowings under our ABL Facility and $206 of borrowings under our accounts receivable securitization facility. The interest rates applicable to our variable rate debt on
June 30, 2008 were (i) 6.0 percent for the Canadian loan portion of the ABL Facility, and (ii) 3.5 percent for the accounts receivable securitization facility. As of June 30, 2008, based upon the amount of our variable rate debt
outstanding, our annual after-tax earnings would decrease by approximately $2 for each one percentage point increase in the interest rates applicable to our variable rate debt.

The amount of our variable rate indebtedness may fluctuate significantly as a result of changes in the amount of indebtedness outstanding under our ABL
Facility and accounts receivables securitization facility.

Currency Exchange Risk.The functional currency for our
Canadian operations is the Canadian dollar. As a result, our future earnings could be affected by fluctuations in the exchange rate between the U.S. and Canadian dollars. Based upon the level of our Canadian operations during 2007 relative to the
Company as a whole, a 10 percent change in this exchange rate would not have a material impact on our earnings. We had no outstanding foreign exchange contracts as of June 30, 2008. We do not engage in purchasing forward exchange contracts for
speculative purposes.



|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the
Companys reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to management, including the
Companys Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Companys management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined
in Rules 13a15(e) and 15d15(e) of the Exchange Act, as of June 30, 2008. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures
were effective as of June 30, 2008.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2008 that materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER
INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

The information set forth under
note 7 to our unaudited condensed consolidated financial statements of this report is incorporated by reference in answer to this item.



|Item 1A. | Risk Factors
|-------- | ------------

Our results of operations and
financial condition are subject to numerous risks and uncertainties described in our 2007

Form 10-K, which risk factors are incorporated herein by
reference. You should carefully consider these risk factors in conjunction with the other information contained in this report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively
impacted.



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##### Table of Contents

|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

(c)

Purchases of Equity Securities by the Issuer

The following table provides information about purchases of the Companys common stock by the Company during the second quarter of 2008:



|                                |  |                                     |  |                                  |      
|------------------------------- |  | ----------------------------------- |  | -------------------------------- | -----
|Period                          |  | Total Number ofShares Purchased (1) |  | Average PricePaid per Share/Unit
|April 1, 2008 to April 30, 2008 |  | 16,827                              |  | $                                | 18.86
|May 1, 2008 to May 31, 2008     |  | 9,440                               |  | $                                | 19.87
|June 1, 2008 to June 30, 2008   |  | 4,588                               |  | $                                | 21.59
|                                |  |                                     |  |                                  |      
|Total                           |  | 30,855                              |  |                                  |      
|                                |  |                                     |  |                                  |      



|(1) | The shares were surrendered to the Company by employees in order to satisfy tax withholding obligations upon the vesting of restricted stock and restricted stock units. These shares
were not acquired pursuant to any repurchase plan or program.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

The Companys annual meeting of stockholders was held on June 11, 2008. The following directors were elected by holders of shares of our common stock and, because they were still outstanding as of the April 24, 2008 record
date for the meeting, our class D-1 perpetual convertible preferred stock, as follows:



|                        |  |            |  |              |  |          
|----------------------- |  | ---------- |  | ------------ |  | ---------
|                        |  | For        |  | VotesAgainst |  | Withheld 
|Class 1 Directors       |  |            |  |              |  |          
|Wayland R. Hicks        |  | 69,292,276 |  |             |  | 1,598,113
|Singleton B. McAllister |  | 69,321,819 |  |             |  | 568,576  
|John S. McKinney        |  | 69,352,825 |  |             |  | 1,537,564
|Jenne K. Britell        |  | 68,599,248 |  |             |  | 2,291,145

In accordance with the de-classification of the companys board of directors that was
approved at last years annual meeting of stockholders, the Class 1 directors were elected for a one-year term expiring in 2009.

As
discussed further in note 1 to our condensed consolidated financial statements, because of the repurchase that occurred on June 10, 2008, the holders of our series C perpetual convertible preferred stock did not re-elect either of its nominees,
Leon D. Black and Michael Gross, at the 2008 annual meeting. Instead, in accordance with the terms of the preferred purchase agreement, each of Messrs. Black and Gross tendered their resignations from the board, effective June 10, 2008.

The following directors were not up for election at the 2008 annual meeting of stockholders and continue to serve on our board: Jason
Papastavrou and Brian McAuley (Class 2 directors, each for a term expiring in 2009) and Howard L. Clark, Jr. and Lawrence Keith Wimbush (Class 3 directors, each for a term expiring in 2010). The Company notes with regret the passing away
of Gerald Tsai, Jr., a Class 2 director, on July 9, 2008.

The other matter voted upon at the 2008 annual meeting of stockholders, and
the results of that vote, is as follows:



| |  |  | To ratify the appointment of Ernst & Young LLP as the independent public auditors of the Company for 2008.
| | - |  | ----------------------------------------------------------------------------------------------------------



|           |  |         |  |        
|---------- |  | ------- |  | -------
|For        |  | Against |  | Abstain
|82,890,386 |  | 288,923 |  | 39,808 

There were no additional matters voted upon at the 2008 annual meeting of stockholders.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|               | 
|2(a)           |  | Agreement and Plan of Merger, dated as of July 22, 2007, among United Rentals, Inc., RAM Holdings, Inc. and RAM Acquisition Corp (incorporated by reference to Exhibit 4.1 of the United
Rentals, Inc. Current Report on Form 8-K filed on July 24, 2007)                                                                                                                                                                                                                                
|               | 
|3(a)           |  | Amended and Restated Certificate of Incorporation of United Rentals, Inc. (incorporated by reference to Exhibit 3.1 of United Rentals, Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998)                                                                                                                                                                                                                                                                           
|               | 
|3(b)           |  | Certificate of Amendment, dated September 29, 1998, to the United Rentals, Inc. Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.2 to the United
Rentals, Inc. Registration Statement on Form S-3, No. 333-70151, filed on January 6, 1999)                                                                                                                                                                                                     
|               | 
|3(c)           |  | Certificate of Amendment, dated June 7, 2007, to the United Rentals, Inc. Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the United Rentals,
Inc. Current Report on Form 8-K filed on June 8, 2007)                                                                                                                                                                                                                                      
|               | 
|3(d)           |  | By-laws of United Rentals, Inc. (amended as of April 4, 2007) (incorporated by reference to Exhibit 3.1 of the United Rentals, Inc. Current Report on Form 8-K filed on April 4,
2007)                                                                                                                                                                                                                                                                                                   
|               | 
|3(e)           |  | Form of Certificate of Designation for Series C Perpetual Convertible Preferred Stock (incorporated by reference to Exhibit 3(f) of the United Rentals, Inc. Quarterly Report on Form 10-Q for
the quarter ended September 30, 2001)                                                                                                                                                                                                                                                     
|               | 
|3(f)           |  | Form of Certificate of Designation for Series D Perpetual Convertible Preferred Stock (incorporated by reference to Exhibit 3(g) of the United Rentals, Inc. Quarterly Report on Form 10-Q for
the quarter ended September 30, 2001)                                                                                                                                                                                                                                                     
|               | 
|3(g)           |  | Form of Certificate of Designation for Series E Junior Participating Preferred Stock (incorporated by reference to Exhibit A of Exhibit 4 of the United Rentals, Inc. Current Report on Form
8-K filed on October 5, 2001)                                                                                                                                                                                                                                                               
|               | 
|3(h)           |  | Rights Agreement, dated September 28, 2001, between United Rentals, Inc. and American Stock Transfer & Trust Co., as Rights Agent (incorporated by reference to Exhibit 4 of the United
Rentals, Inc. Current Report on Form 8-K filed on October 5, 2001)                                                                                                                                                                                                                               
|               | 
|3(i)           |  | Amended and Restated Certificate of Incorporation of United Rentals (North America), Inc., (incorporated by reference to Exhibit 3.3 of the United Rentals (North America), Inc. Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998)                                                                                                                                                                                                                                      
|               | 
|3(j)           |  | By-laws of United Rentals (North America), Inc. (incorporated by reference to Exhibit 3.4 of the United Rentals (North America), Inc. Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998)                                                                                                                                                                                                                                                                                 
|               | 
|3(k)           |  | First Amendment to the Rights Agreement, dated as of July 22, 2007, between United Rentals, Inc. and American Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.2 of
the United Rentals, Inc. Current Report on Form 8-K filed on July 24, 2007)                                                                                                                                                                                                                    
|               | 
|4(a)           |  | Indenture, dated as of June 10, 2008, between United Rentals, Inc. and the Bank of New York, as trustee, with respect to 14% Senior Notes due 2014 (incorporated by reference to Exhibit 4.1 to
the United Rentals, Inc. Current Report on Form 8-K filed on June 9, 2008)                                                                                                                                                                                                               
|               | 
|4(b)           |  | Form of United Rentals, Inc. 14% Senior Notes due 2014 (incorporated by reference to Exhibit 4.1 to the United Rentals, Inc. Current Report on Form 8-K filed on June 9, 2008)                                                                                                                                                                                                                                                                                                           
|               | 
|10(a)          |  | Credit Agreement, dated June 9, 2008, by and among United Rentals, Inc., United Rentals (North America), Inc., certain of their subsidiaries, Bank of America, N.A., UBS Securities LLC, UBS AG
Canada Branch, Wachovia Bank, National Association, Wachovia Capital Finance Corporation (Canada), Wells Fargo Foothill, LLC and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the United Rentals, Inc. Current Report on
Form 8-K filed on June 9, 2008)
|               | 
|10(b)          |  | Purchase Agreement, dated as of June 10, 2008, among United Rentals, Inc., Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P. and J.P. Morgan Partners (BHCA), L.P.
(incorporated by reference to Exhibit 10.2 to the United Rentals, Inc. Current Report on Form 8-K filed on June 9, 2008)                                                                                                                                                                             
|               | 
|10(c)          |  | Registration Rights Agreement, dated as of June 10, 2008, among United Rentals, Inc., Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P. and J.P. Morgan Partners (BHCA), L.P.
(incorporated by reference to Exhibit 10.3 to the United Rentals, Inc. Current Report on Form 8-K filed on June 9, 2008)                                                                                                                                                                  
|               | 
|10(d)*         |  | Revisions to Compensation Program for Non-Employee Directors of United Rentals, Inc.                                                                                                                                                                                                                                                                                                                                                                                                     
|               | 
|31(a)*         |  | Rule 13a-14(a) Certification by Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | 
|31(b)*         |  | Rule 13a-14(a) Certification by Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                  
|               | 
|32(a)*         |  | Section 1350 Certification by Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                    
|               | 
|32(b)*         |  | Section 1350 Certification by Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                    



|* | Filed herewith.
|- | ---------------



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                     |  |  |  |                                      |  |                   |  |                                                            
|-------------------- |  |  |  | ------------------------------------ |  | ----------------- |  | -----------------------------------------------------------
|                     |  |  |  | UNITED RENTALS, INC.                
|                     |  |  | 
|Dated: July 29, 2008 |  |  |  | By:                                  |  | /s/ JOHN J. FAHEY
|                     |  |  |  |                                      |  |                   |  | John J. Fahey                                              
|                     |  |  |  |                                      |  |                   |  | Vice President, Controller and Principal
Accounting Officer
|                     |  | 
|                     |  |  |  | UNITED RENTALS (NORTH AMERICA), INC.
|                     |  |  | 
|Dated: July 29, 2008 |  |  |  | By:                                  |  | /s/ JOHN J. FAHEY
|                     |  |  |  |                                      |  |                   |  | John J. Fahey                                              
|                     |  |  |  |                                      |  |                   |  | Vice President, Controller and Principal
Accounting Officer



37