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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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

For the quarterly period ended September 30, 2007

OR



| ̈ | 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



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United Rentals, Inc.

Commission File Number 1-13663

United Rentals (North America), Inc.

(Exact Names of Registrants as Specified in Their Charters)



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|                         |  |                                      
|------------------------ |  | -------------------------------------
|Delaware Delaware        |  | 06-1522496 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



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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, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  x    Accelerated Filer ̈Non-Accelerated Filer ̈

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 October 25, 2007, there were 85,786,079 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 SEPTEMBER 30, 2007

INDEX



|        |  |                                                                                                                                              |  |     
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                                                                              |  | Page
|        |  |                                                                                                                                             
|PART I  |  | FINANCIAL INFORMATION                                                                                                                        |  |     
|        |  |                                                                                                                                             
|Item 1  |  | Unaudited Condensed Consolidated Financial Statements                                                                                        |  | 4   
|        |  |                                                                                                                                             
|        |  | United Rentals, Inc. Condensed Consolidated Balance Sheets as of September 30, 2007, September 30, 2006 and December 31, 2006 (unaudited)    |  | 4   
|        |  |                                                                                                                                             
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2007 and 2006 (unaudited) |  | 5   
|        |  |                                                                                                                                             
|        |  | United Rentals, Inc. Condensed Consolidated Statement of Stockholders Equity for the Nine Months Ended September 30, 2007 (unaudited)       |  | 6   
|        |  |                                                                                                                                             
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006 (unaudited)       |  | 7   
|        |  |                                                                                                                                             
|        |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                                               |  | 8   
|        |  |                                                                                                                                             
|Item 2  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                        |  | 25  
|        |  |                                                                                                                                             
|Item 3  |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                   |  | 30  
|        |  |                                                                                                                                             
|Item 4  |  | Controls and Procedures                                                                                                                      |  | 31  
|        |  |                                                                                                                                             
|PART II |  | OTHER INFORMATION                                                                                                                            |  |     
|        |  |                                                                                                                                             
|Item 1  |  | Legal Proceedings                                                                                                                            |  | 32  
|        |  |                                                                                                                                             
|Item 1A |  | Risk Factors                                                                                                                                 |  | 32  
|        |  |                                                                                                                                             
|Item 2  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                  |  | 33  
|        |  |                                                                                                                                             
|Item 6  |  | Exhibits                                                                                                                                     |  | 34  
|        |  |                                                                                                                                             
|        |  | Signatures                                                                                                                                   |  | 35  



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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report, including in Part I below under Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations, 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, and our common
stock price may be subject to significant fluctuations.

Certain of such risks and uncertainties, including risks and uncertainties
associated with the proposed acquisition of our Company by affiliates of Cerberus Capital Management, L.P., as reported in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the SEC) on July 24, 2007,
are referred to below in Part II under Item 1ARisk Factors, and described therein and/or in our Annual Report on Form 10-K for the year ended December 31, 2006. You should carefully consider such described risks and
uncertainties, as well as the other information contained in this report.

You should also note that our forward-looking statements
contained in this report 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)

(Dollars in millions, except per share data)



|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----- | ----------------- | - | ---------------- |  | - | -----
|                                                                                                                                                                                                               |  | September 30,2007 |       | September 30,2006 |   | December 31,2006
|ASSETS                                                                                                                                                                                                         |  |                   |       |                   |   |                  |  |   |      
|Cash and cash equivalents                                                                                                                                                                                      |  | $                 | 112   |                   | $ | 140              |  | $ | 119  
|Accounts receivable, net of allowance for doubtful accounts of $24, $36 and $34 at September 30, 2007, September 30, 2006 and
December 31, 2006, respectively                                                  |  |                   | 582   |                   |   | 541              |  |   | 502  
|Inventory                                                                                                                                                                                                      |  |                   | 123   |                   |   | 153              |  |   | 139  
|Assets of discontinued operation                                                                                                                                                                               |  |                   |      |                   |   | 160              |  |   | 107  
|Prepaid expenses and other assets                                                                                                                                                                              |  |                   | 51    |                   |   | 53               |  |   | 56   
|Deferred taxes                                                                                                                                                                                                 |  |                   | 51    |                   |   | 73               |  |   | 82   
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Total current assets                                                                                                                                                                                           |  |                   | 919   |                   |   | 1,120            |  |   | 1,005
|Rental equipment, net                                                                                                                                                                                          |  |                   | 2,918 |                   |   | 2,659            |  |   | 2,561
|Property and equipment, net                                                                                                                                                                                    |  |                   | 415   |                   |   | 343              |  |   | 359  
|Goodwill and other intangible assets, net                                                                                                                                                                      |  |                   | 1,407 |                   |   | 1,370            |  |   | 1,376
|Other long-term assets                                                                                                                                                                                         |  |                   | 58    |                   |   | 69               |  |   | 65   
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Total assets                                                                                                                                                                                                   |  | $                 | 5,717 |                   | $ | 5,561            |  | $ | 5,366
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                           |  |                   |       |                   |   |                  |  |   |      
|Current maturities of long-term debt                                                                                                                                                                           |  | $                 | 78    |                   | $ | 285              |  | $ | 37   
|Accounts payable                                                                                                                                                                                               |  |                   | 248   |                   |   | 263              |  |   | 218  
|Accrued expenses and other liabilities                                                                                                                                                                         |  |                   | 273   |                   |   | 292              |  |   | 322  
|Liabilities related to discontinued operation                                                                                                                                                                  |  |                   |      |                   |   | 31               |  |   | 22   
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Total current liabilities                                                                                                                                                                                      |  |                   | 599   |                   |   | 871              |  |   | 599  
|Long-term debt                                                                                                                                                                                                 |  |                   | 2,535 |                   |   | 2,513            |  |   | 2,519
|Subordinated convertible debentures                                                                                                                                                                            |  |                   | 146   |                   |   | 159              |  |   | 146  
|Deferred taxes                                                                                                                                                                                                 |  |                   | 472   |                   |   | 413              |  |   | 463  
|Other long-term liabilities                                                                                                                                                                                    |  |                   | 100   |                   |   | 104              |  |   | 101  
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Total liabilities                                                                                                                                                                                              |  |                   | 3,852 |                   |   | 4,060            |  |   | 3,828
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Preferred stock$0.01 par value, 5,000,000 shares authorized:                                                                                                                                                  |  |                   |       |                   |   |                  |  |   |      
|Series C perpetual convertible preferred stock$1,000 per share liquidation preference, 300,000 shares issued and outstanding at
September 30, 2007, September 30, 2006 and December 31, 2006                  |  |                   |      |                   |   |                 |  |   |     
|Series D perpetual convertible preferred stock$1,000 per share liquidation preference, 150,000 shares issued and outstanding at
September 30, 2007, September 30, 2006 and December 31, 2006                  |  |                   |      |                   |   |                 |  |   |     
|Common stock$0.01 par value, 500,000,000 shares authorized, 85,801,507, 80,570,247 and 81,178,663 shares issued and outstanding at
September 30, 2007, September 30, 2006 and December 31, 2006, respectively |  |                   | 1     |                   |   | 1                |  |   | 1    
|Additional paid-in capital                                                                                                                                                                                     |  |                   | 1,479 |                   |   | 1,424            |  |   | 1,421
|Retained earnings                                                                                                                                                                                              |  |                   | 278   |                   |   | 16               |  |   | 69   
|Accumulated other comprehensive income                                                                                                                                                                         |  |                   | 107   |                   |   | 60               |  |   | 47   
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|Total stockholders equity                                                                                                                                                                                     |  |                   | 1,865 |                   |   | 1,501            |  |   | 1,538
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      
|                                                                                                                                                                                                               |  | $                 | 5,717 |                   | $ | 5,561            |  | $ | 5,366
|                                                                                                                                                                                                               |  |                   |       |                   |   |                  |  |   |      

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share amounts)



|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|------------------------------------------------------------------- |  | ------------------------------- | ---- | ------------------------------ | ---- | - | ---- |  | - | ----- | - |  | - | ----- | -
|                                                                    |  | Three Months EndedSeptember 30, |      | Nine Months EndedSeptember 30, |     
|                                                                    |  | 2007                            |      |                                | 2006 |   | 2007 |  |   | 2006  |  
|Revenues:                                                           |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Equipment rentals                                                   |  | $                               | 719  |                                |      | $ | 693  |  | $ | 1,947 |   |  | $ | 1,874 |  
|Sales of rental equipment                                           |  |                                 | 78   |                                |      |   | 87   |  |   | 243   |   |  |   | 248   |  
|New equipment sales                                                 |  |                                 | 56   |                                |      |   | 60   |  |   | 177   |   |  |   | 172   |  
|Contractor supplies sales                                           |  |                                 | 96   |                                |      |   | 102  |  |   | 301   |   |  |   | 288   |  
|Service and other revenues                                          |  |                                 | 45   |                                |      |   | 41   |  |   | 133   |   |  |   | 119   |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Total revenues                                                      |  |                                 | 994  |                                |      |   | 983  |  |   | 2,801 |   |  |   | 2,701 |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Cost of revenues:                                                   |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation                   |  |                                 | 303  |                                |      |   | 296  |  |   | 885   |   |  |   | 850   |  
|Depreciation of rental equipment                                    |  |                                 | 111  |                                |      |   | 107  |  |   | 321   |   |  |   | 304   |  
|Cost of rental equipment sales                                      |  |                                 | 56   |                                |      |   | 59   |  |   | 174   |   |  |   | 172   |  
|Cost of new equipment sales                                         |  |                                 | 47   |                                |      |   | 48   |  |   | 147   |   |  |   | 141   |  
|Cost of contractor supplies sales                                   |  |                                 | 78   |                                |      |   | 82   |  |   | 245   |   |  |   | 234   |  
|Cost of service and other revenue                                   |  |                                 | 20   |                                |      |   | 20   |  |   | 60    |   |  |   | 58    |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Total cost of revenues                                              |  |                                 | 615  |                                |      |   | 612  |  |   | 1,832 |   |  |   | 1,759 |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Gross profit                                                        |  |                                 | 379  |                                |      |   | 371  |  |   | 969   |   |  |   | 942   |  
|Selling, general and administrative expenses                        |  |                                 | 152  |                                |      |   | 156  |  |   | 447   |   |  |   | 453   |  
|Non-rental depreciation and amortization                            |  |                                 | 13   |                                |      |   | 10   |  |   | 38    |   |  |   | 37    |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Operating income                                                    |  |                                 | 214  |                                |      |   | 205  |  |   | 484   |   |  |   | 452   |  
|Interest expense, net                                               |  |                                 | 44   |                                |      |   | 57   |  |   | 146   |   |  |   | 157   |  
|Interest expensesubordinated convertible debentures                |  |                                 | 2    |                                |      |   | 4    |  |   | 7     |   |  |   | 11    |  
|Other income, net                                                   |  |                                 | (4   | )                              |      |   |     |  |   | (7    | ) |  |   |      |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Income from continuing operations before provision for income taxes |  |                                 | 172  |                                |      |   | 144  |  |   | 338   |   |  |   | 284   |  
|Provision for income taxes                                          |  |                                 | 61   |                                |      |   | 56   |  |   | 128   |   |  |   | 112   |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Income from continuing operations                                   |  |                                 | 111  |                                |      |   | 88   |  |   | 210   |   |  |   | 172   |  
|Income (loss) from discontinued operation, net of taxes             |  |                                 | 1    |                                |      |   | 7    |  |   | (1    | ) |  |   | (1    | )
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Net income                                                          |  | $                               | 112  |                                |      | $ | 95   |  | $ | 209   |   |  | $ | 171   |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Basic earnings available to common stockholders:                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Income from continuing operations                                   |  | $                               | 1.09 |                                |      | $ | 0.90 |  | $ | 2.10  |   |  | $ | 1.78  |  
|Income (loss) from discontinued operation                           |  |                                 | 0.01 |                                |      |   | 0.07 |  |   |      |   |  |   | (0.01 | )
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Net income                                                          |  | $                               | 1.10 |                                |      | $ | 0.97 |  | $ | 2.10  |   |  | $ | 1.77  |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Diluted earnings available to common stockholders:                  |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Income from continuing operations                                   |  | $                               | 0.97 |                                |      | $ | 0.79 |  | $ | 1.87  |   |  | $ | 1.57  |  
|Income (loss) from discontinued operation                           |  |                                 | 0.01 |                                |      |   | 0.06 |  |   |      |   |  |   | (0.01 | )
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  
|Net income                                                          |  | $                               | 0.98 |                                |      | $ | 0.85 |  | $ | 1.87  |   |  | $ | 1.56  |  
|                                                                    |  |                                 |      |                                |      |   |      |  |   |       |   |  |   |       |  

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (UNAUDITED)

(in millions)



|                                                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|---------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------- | ---------------- | ---------------------------------------------- | ------ | ------------ |  | -------------------------- |  | - | ----------------- |  | -------------------- | ----- | -------------------------------------- |  | - | --- |  | - | --- |  | - | ---
|                                                                                                                       |  | Series C Perpetual Convertible
Preferred Stock |                  | Series D Perpetual Convertible
Preferred Stock |        | Common Stock |  | Additional Paid-in Capital |  |   | Retained Earnings |  | Comprehensive Income |       | Accumulated Other Comprehensive Income
|                                                                                                                       |  |                                                | Number of Shares |                                                | Amount |              |  |                            | 
|Balance, December 31, 2006                                                                                             |  | $                                              |                 |                                                | $      |             |  | 81                         |  | $ | 1                 |  | $                    | 1,421 |                                        |  | $ | 69  |  |   |     |  | $ | 47 
|Comprehensive income:                                                                                                  |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|Net income                                                                                                             |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   | 209 |  | $ | 209 |  |   |    
|Other comprehensive income:                                                                                            |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|Foreign currency translation adjustments                                                                               |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   | 60  |  |   | 60 
|                                                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|Comprehensive income                                                                                                   |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  | $ | 269 |  |   |    
|                                                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|Exercise of common stock options                                                                                       |  |                                                |                  |                                                |        |              |  | 5                          |  |   |                  |  |                      | 22    |                                        |  |   |     |  |   |     |  |   |    
|Amortization of stock compensation                                                                                     |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      | 15    |                                        |  |   |     |  |   |     |  |   |    
|Excess tax benefits from share-based payment arrangements, including release of deferred tax valuation allowance of $6 |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      | 28    |                                        |  |   |     |  |   |     |  |   |    
|Shares repurchased and retired                                                                                         |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      | (4    | )                                      |  |   |     |  |   |     |  |   |    
|Forfeiture of stock compensation                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      | (3    | )                                      |  |   |     |  |   |     |  |   |    
|                                                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    
|Balance, September 30, 2007                                                                                            |  | $                                              |                 |                                                | $      |             |  | 86                         |  | $ | 1                 |  | $                    | 1,479 |                                        |  | $ | 278 |  |   |     |  | $ | 107
|                                                                                                                       |  |                                                |                  |                                                |        |              |  |                            |  |   |                   |  |                      |       |                                        |  |   |     |  |   |     |  |   |    

See accompanying notes.



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)



|                                                                                                         |  |                                |      |   |      |   |      |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---- | - | ---- | - | ---- | -
|                                                                                                         |  | Nine Months EndedSeptember 30, |     
|                                                                                                         |  | 2007                           |      |   | 2006 |  
|Cash Flows From Operating Activities:                                                                    |  |                                |      |   |      |   |      |  
|Income from continuing operations                                                                        |  | $                              | 210  |   |      | $ | 172  |  
|Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |  |                                |      |   |      |   |      |  
|Depreciation and amortization                                                                            |  |                                | 359  |   |      |   | 341  |  
|Amortization of deferred financing costs                                                                 |  |                                | 7    |   |      |   | 8    |  
|Gain on sales of rental equipment                                                                        |  |                                | (69  | ) |      |   | (76  | )
|Gain on sales of non-rental equipment                                                                    |  |                                | (5   | ) |      |   | (2   | )
|Non-cash adjustments to equipment                                                                        |  |                                | (1   | ) |      |   | 8    |  
|Write-off of deferred financing costs                                                                    |  |                                |     |   |      |   | 8    |  
|Amortization of deferred compensation                                                                    |  |                                | 12   |   |      |   | 11   |  
|Increase in deferred taxes                                                                               |  |                                | 41   |   |      |   | 92   |  
|Changes in operating assets and liabilities:                                                             |  |                                |      |   |      |   |      |  
|Increase in accounts receivable                                                                          |  |                                | (79  | ) |      |   | (29  | )
|Decrease in inventory                                                                                    |  |                                | 16   |   |      |   | 4    |  
|Decrease in prepaid expenses and other assets                                                            |  |                                | 1    |   |      |   | 6    |  
|Increase in accounts payable                                                                             |  |                                | 30   |   |      |   | 40   |  
|(Decrease) increase in accrued expenses and other liabilities                                            |  |                                | (38  | ) |      |   | 6    |  
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net cash provided by operating activitiescontinuing operations                                          |  |                                | 484  |   |      |   | 589  |  
|Net cash provided by operating activitiesdiscontinued operation                                         |  |                                | 9    |   |      |   | 17   |  
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net cash provided by operating activities                                                                |  |                                | 493  |   |      |   | 606  |  
|Cash Flows From Investing Activities:                                                                    |  |                                |      |   |      |   |      |  
|Purchases of rental equipment                                                                            |  |                                | (785 | ) |      |   | (787 | )
|Purchases of non-rental equipment                                                                        |  |                                | (81  | ) |      |   | (50  | )
|Proceeds from sales of rental equipment                                                                  |  |                                | 243  |   |      |   | 248  |  
|Proceeds from sales of non-rental equipment                                                              |  |                                | 20   |   |      |   | 13   |  
|Purchases of other companies                                                                             |  |                                | (23  | ) |      |   | (39  | )
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net cash used in investing activitiescontinuing operations                                              |  |                                | (626 | ) |      |   | (615 | )
|Net cash provided by (used in) investing activitiesdiscontinued operation                               |  |                                | 67   |   |      |   | (11  | )
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net cash used in investing activities                                                                    |  |                                | (559 | ) |      |   | (626 | )
|Cash Flows From Financing Activities:                                                                    |  |                                |      |   |      |   |      |  
|Proceeds from debt                                                                                       |  |                                | 421  |   |      |   | 265  |  
|Payments on debt                                                                                         |  |                                | (420 | ) |      |   | (423 | )
|Proceeds from the exercise of common stock options                                                       |  |                                | 22   |   |      |   | 64   |  
|Proceeds received in conjunction with partial termination of interest rate caps                          |  |                                |     |   |      |   | 3    |  
|Subordinated convertible debentures repurchased and retired, including premium of $1                     |  |                                |     |   |      |   | (64  | )
|Shares repurchased and retired                                                                           |  |                                | (4   | ) |      |   | (1   | )
|Excess tax benefits from share-based payment arrangements                                                |  |                                | 28   |   |      |   |     |  
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net cash provided by (used in) financing activities                                                      |  |                                | 47   |   |      |   | (156 | )
|Effect of foreign exchange rates                                                                         |  |                                | 12   |   |      |   |     |  
|                                                                                                         |  |                                |      |   |      |   |      |  
|Net decrease in cash and cash equivalents                                                                |  |                                | (7   | ) |      |   | (176 | )
|Cash and cash equivalents at beginning of period                                                         |  |                                | 119  |   |      |   | 316  |  
|                                                                                                         |  |                                |      |   |      |   |      |  
|Cash and cash equivalents at end of period                                                               |  | $                              | 112  |   |      | $ | 140  |  
|                                                                                                         |  |                                |      |   |      |   |      |  

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 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 April 2007, we announced that our board
of directors had authorized the commencement of a process to explore a broad range of strategic alternatives to maximize shareholder value, including a possible sale of the Company, and had retained financial advisors in this process. On
July 23, 2007, we announced that we had signed a definitive merger agreement to be acquired by affiliates of Cerberus Capital Management, L.P. (Cerberus), in a transaction valued at approximately $6.66 billion, inclusive of
approximately $2.60 billion in outstanding debt obligations, but exclusive of transaction costs. Completion of the transaction is subject to customary closing conditions, including approval of the transaction by our stockholders, but not to a
financing condition. On October 19, 2007, at a special meeting of our stockholders, the merger agreement was approved. We currently expect the transaction to close on or about November 16, 2007, but cannot guarantee this timing or
result. For more detailed information, see our Current Reports on Form 8-K, filed with the SEC on July 24, 2007, October 19, 2007 and October 30, 2007. See also note 5 below for a description of two lawsuits filed following our
announcement of the transaction.

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, 2006 (the 2006 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 2006 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.

Discontinued Operation

In December 2006, we entered into a definitive agreement to sell our traffic control business to HTS Acquisition, Inc., an entity newly-formed by
affiliates of private equity investors Wynnchurch Capital Partners and Oak Hill Special Opportunities Fund, L.P. The transaction closed in February 2007 and we received net proceeds of $66.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the results of operations of our
traffic control business have been reported as a discontinued operation in the condensed consolidated statements of income. The assets and liabilities associated with the traffic control business have also been classified separately in our condensed
consolidated balance sheets. Additionally, our condensed consolidated statements of cash flows separately report the cash flows of the discontinued operation within the operating and investing sections. Revenues related to our discontinued operation
were approximately $0 and $87 for the three months ended September 30, 2007 and 2006, respectively, and $20 and $209 for the nine months ended September 30, 2007 and 2006, respectively. During the three months ended September 30, 2007
and 2006, we reported income from our discontinued operation of $1 ($1 after-tax) and $10 ($7 after-tax), respectively. During the nine months ended September 30, 2007 and 2006, we reported losses from our discontinued operation of $3 ($1 after
tax) and $1 ($1 after tax), respectively.

Accounting Change

We adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of FASB Statement
No. 109, on January 1, 2007. We did not record any



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unrecognized income tax benefits as a result of the implementation of FIN 48. At the adoption date of January 1, 2007, we had $6 of unrecognized tax
benefits. For the three and nine months ended September 30, 2007, there was an increase in our FIN 48 accrual of $1.9

Consistent with
the classification in prior years, the Company classifies interest and penalties related to uncertain income tax positions in interest expense and selling, general, and administrative expenses, respectively, in its condensed consolidated statements
of income. At the date of adoption, approximately $1 of interest expense and $0 of penalties are included in accrued expenses and other liabilities on our condensed consolidated balance sheet. For the three and nine months ended September 30,
2007, less than $1 of interest expense related to income tax was reflected in our condensed consolidated statements of income.

We file
income tax returns in the U.S. and in several foreign jurisdictions. With few exceptions, we have completed our domestic income tax examinations, or the statute of limitations has expired in the respective jurisdictions, for years before 2005. The
IRS commenced an audit of the 2005 taxable year during the second quarter of 2007 which is expected to be completed during the fourth quarter. At that time, the company expects that the FIN 48 accrual will be reduced by $1.9. In addition, our
Canadian operating subsidiary is currently under examination for tax years 2003 through 2005. Included in the balance of unrecognized tax benefits at January 1, 2007 are certain tax positions for which it is reasonably possible that the total
amounts of the unrecognized tax benefits could significantly change during the next twelve months. However, based on the status of the ongoing audit examinations and alternative settlement options available to the Company for certain of these tax
positions, which could include legal proceedings, it is not possible to estimate the amount or timing of any such change to the previously recorded uncertain tax positions. Other than as discussed above, there have been no significant changes to the
status of these audit examinations and settlement proceedings during the three and nine month periods ended September 30, 2007.

New Accounting
Pronouncements

In February 2007, the Financial Accounting Standards Board issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial LiabilitiesIncluding an Amendment of SFAS 115, which allows for the option to measure financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair
value option has been elected are reported in earnings. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. We do not believe the adoption of this statement will have a material effect
on our financial condition or results of operations.

In September 2006, the FASB issued SFAS No. 157 Fair Value
Measurements, which is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. This statement provides a single definition of fair value, together with a framework for measuring it, and
requires new additional disclosure about the use of fair value to measure assets and liabilities. This statement also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy
with the highest priority being quoted prices in active markets. While this statement does not add any new fair value measurements, it may change current practice. We are currently evaluating the potential impact of this statement.

In June 2006, the FASB ratified the consensus reached on EITF Issue No. 06-03, How Sales Taxes Collected from Customers and Remitted to
Governmental Authorities Should Be Presented in the Income Statement (that is, Gross Versus Net Presentation) (EITF 06-03). The EITF reached a consensus that the presentation of taxes on either a gross or net basis is an accounting
policy decision that requires disclosure. EITF 06-03 is effective for our fiscal year beginning January 1, 2007. Sales tax amounts collected from customers have been recorded on a net basis. The adoption of EITF 06-03 did not have any effect on
our financial position or results of operations.

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.



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Operating segment revenues and profitability for the three and nine months ended September 30, 2007
and 2006 were as follows:



|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|-------------------------------------------------------------- |  | ------------------------------- | --- | ------------------------------ | - | ---- |  | ---- | ----- |  | - | -----
|                                                               |  | Three Months EndedSeptember 30, |     | Nine months EndedSeptember 30,
|                                                               |  | 2007                            |     | 2006                           |   | 2007 |  | 2006
|Total reportable segment revenues                              |  |                                 |     |                                |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                               | 932 |                                | $ | 921  |  | $    | 2,632 |  | $ | 2,535
|Trench safety, pump and power                                  |  |                                 | 62  |                                |   | 62   |  |      | 169   |  |   | 166  
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Total revenues                                                 |  | $                               | 994 |                                | $ | 983  |  | $    | 2,801 |  | $ | 2,701
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Total reportable segment depreciation and amortization expense |  |                                 |     |                                |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                               | 119 |                                | $ | 111  |  | $    | 342   |  | $ | 324  
|Trench safety, pump and power                                  |  |                                 | 5   |                                |   | 6    |  |      | 17    |  |   | 17   
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Total depreciation and amortization expense                    |  | $                               | 124 |                                | $ | 117  |  | $    | 359   |  | $ | 341  
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Reportable segment operating income                            |  |                                 |     |                                |   |      |  |      |       |  |   |      
|General rentals                                                |  | $                               | 195 |                                | $ | 187  |  | $    | 440   |  | $ | 409  
|Trench safety, pump and power                                  |  |                                 | 19  |                                |   | 18   |  |      | 44    |  |   | 43   
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Segment operating income                                       |  | $                               | 214 |                                | $ | 205  |  | $    | 484   |  | $ | 452  
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Total reportable segment capital expenditures                  |  |                                 |     |                                |   |      |  |      |       |  |   |      
|General rentals                                                |  |                                 |     |                                |   |      |  | $    | 836   |  | $ | 797  
|Trench safety, pump and power                                  |  |                                 |     |                                |   |      |  |      | 30    |  |   | 40   
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      
|Total capital expenditures                                     |  |                                 |     |                                |   |      |  | $    | 866   |  | $ | 837  
|                                                               |  |                                 |     |                                |   |      |  |      |       |  |   |      



|                                 |  |                    |       |                    |   |                   |  |   |      
|-------------------------------- |  | ------------------ | ----- | ------------------ | - | ----------------- |  | - | -----
|                                 |  | September 30, 2007 |       | September 30, 2006 |   | December 31, 2006
|Total assets                     |  |                    |       |                    |   |                   |  |   |      
|General rentals                  |  | $                  | 5,553 |                    | $ | 5,244             |  | $ | 5,112
|Trench safety, pump and power    |  |                    | 164   |                    |   | 157               |  |   | 147  
|Assets of discontinued operation |  |                    |      |                    |   | 160               |  |   | 107  
|                                 |  |                    |       |                    |   |                   |  |   |      
|Total assets                     |  | $                  | 5,717 |                    | $ | 5,561             |  | $ | 5,366
|                                 |  |                    |       |                    |   |                   |  |   |      

3. Acquisitions

In February 2007, we acquired High Reach Equipment Services, LLC (High Reach). High Reach had one aerial equipment branch in Georgia and 2006 revenues of approximately $11. The aggregate purchase price for
this acquisition was approximately $23. Pro forma combined results of operations giving effect to this acquisition would not vary materially from historical results.

4. Goodwill and Other Intangible Assets

The carrying amount of our goodwill was $1,359, $1,340 and
$1,338 at September 30, 2007, September 30, 2006 and December 31, 2006, 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.



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Other intangible assets consist of customer relationships and non-compete agreements and are amortized
over periods ranging from 3 to 12 years. Amortization expense for other intangible assets was $2 and $1 for the three months ended September 30, 2007 and 2006, respectively, and $5 and $3 for the nine months ended September 30, 2007 and
2006, respectively. The cost of other intangible assets and the related accumulated amortization as of September 30, 2007 was as follows:



|                         |  |                    |     |  
|------------------------ |  | ------------------ | --- | -
|                         |  | September 30, 2007 |    
|Gross carrying amount    |  | $                  | 83  |  
|Accumulated amortization |  |                    | (35 | )
|                         |  |                    |     |  
|Net amount               |  | $                  | 48  |  
|                         |  |                    |     |  

5. 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 entitled In 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.

In July 2007, we received a letter from the staff of the SEC stating that the staff intends 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, periodic filing requirements, as
well as antifraud provisions as set forth in Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, 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.

The U.S. Attorneys office 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.

We cannot predict the outcome of these inquiries 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 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 Securities Exchange Act of 1934, as amended (the Exchange Act) and Rule 10b-5 promulgated 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.



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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. We intend to continue to defend against this action vigorously. At this stage of the litigation, it is not possible to estimate the
amount of loss or range of possible loss that might result from an adverse judgment or a settlement of this matter.

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, entitled Gregory 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 the Riegel 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, entitled Nathan 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 chairman and our vice chairman and then
chief executive officer. The initial complaint sought unspecified compensatory damages, equitable relief, costs and expenses 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 and approved by the Court, plaintiff in the Brundridge 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 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 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 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



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section 304 of the Sarbanes-Oxley Act. 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 section 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 the Gordon 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. Briefing with respect to these motions is now complete.

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, entitled Donald Lefari v. United Rentals, Inc. et al., was filed in the Superior Court of the 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 and names the Company and all of our directors and Cerberus as defendants. The operative complaint alleges, among other things, that our board of
directors violated its fiduciary duties to the Companys stockholders by entering into the merger agreement and that our proxy statement failed to disclose material information. Plaintiff Lefari sought to enjoin the proposed transaction on
those bases. On September 19, 2007, the parties to the Lefari action entered into a memorandum of understanding to settle the action and a settlement agreement is 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 the Superior Court of the State of Connecticut, Judicial District of Stamford-Norwalk (the Brundridge II action). This lawsuit names our current
directors as defendants. The complaint alleges, among other things, that our board of directors failed to disclose all the material facts that the Companys stockholders require in order to cast an informed vote for or against the proposal to
adopt the merger agreement. If the court approves the anticipated settlement agreement in the Lefari action, that lawsuit will be dismissed with prejudice, and thereby release claims asserted by the plaintiff in the Brundridge II
action.

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.

6. Earnings Per Share

Basic earnings per share is computed by dividing net income 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. 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 EndedSeptember 30, |        | Nine months EndedSeptember 30, |  
|                                                        |  | 2007                            |        | 2006                           |   | 2007   |  |   | 2006   |  
|Numerator:                                              |  |                                 |        |                                |   |        |  |   |        |   |  |   |        |  
|Income from continuing operations                       |  | $                               | 111    |                                | $ | 88     |  | $ | 210    |   |  | $ | 172    |  
|Income (loss) from discontinued operation, net of taxes |  |                                 | 1      |                                |   | 7      |  |   | (1     | ) |  |   | (1     | )
|                                                        |  |                                 |        |                                |   |        |  |   |        |   |  |   |        |  
|Net income                                              |  |                                 | 112    |                                |   | 95     |  |   | 209    |   |  |   | 171    |  
|Convertible debt interest                               |  |                                 |       |                                |   |       |  |   | 1      |   |  |   | 1      |  
|Subordinated convertible debt interest                  |  |                                 | 1      |                                |   | 2      |  |   | 4      |   |  |   | 6      |  
|                                                        |  |                                 |        |                                |   |        |  |   |        |   |  |   |        |  
|Net income available to common stockholders             |  | $                               | 113    |                                | $ | 97     |  | $ | 214    |   |  | $ | 178    |  
|                                                        |  |                                 |        |                                |   |        |  |   |        |   |  |   |        |  
|Denominator:                                            |  |                                 |        |                                |   |        |  |   |        |   |  |   |        |  
|Weighted-average common shares                          |  |                                 | 84,142 |                                |   | 80,598 |  |   | 82,537 |   |  |   | 79,124 |  
|Series C preferred                                      |  |                                 | 12,000 |                                |   | 12,000 |  |   | 12,000 |   |  |   | 12,000 |  



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|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|---------------------------------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | ------- |  | - | ------- | -
|                                                                             |  | Three Months EndedSeptember 30, |         | Nine months EndedSeptember 30, |  
|                                                                             |  | 2007                            |         | 2006                           |   | 2007    |  | 2006 |        
|Series D preferred                                                           |  |                                 | 5,000   |                                |   | 5,000   |  |      | 5,000   |  |   | 5,000   |  
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Denominator for basic earnings per shareweighted-average                    |  |                                 | 101,142 |                                |   | 97,598  |  |      | 99,537  |  |   | 96,124  |  
|Effect of dilutive securities:                                               |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Employee stock options and warrants                                          |  |                                 | 3,701   |                                |   | 4,710   |  |      | 4,775   |  |   | 6,257   |  
|Convertible shares                                                           |  |                                 | 6,461   |                                |   | 6,461   |  |      | 6,461   |  |   | 6,461   |  
|Subordinated convertible debentures                                          |  |                                 | 3,342   |                                |   | 5,078   |  |      | 3,342   |  |   | 5,078   |  
|Restricted stock units and other                                             |  |                                 | 443     |                                |   | 135     |  |      | 491     |  |   | 158     |  
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Denominator for dilutive earnings per shareadjusted weighted-average shares |  |                                 | 115,089 |                                |   | 113,982 |  |      | 114,606 |  |   | 114,078 |  
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Basic earnings available to common stockholders:                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Income from continuing operations                                            |  | $                               | 1.09    |                                | $ | 0.90    |  | $    | 2.10    |  | $ | 1.78    |  
|Income (loss) from discontinued operation                                    |  |                                 | 0.01    |                                |   | 0.07    |  |      |        |  |   | (0.01   | )
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Net income                                                                   |  | $                               | 1.10    |                                | $ | 0.97    |  | $    | 2.10    |  | $ | 1.77    |  
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Diluted earnings available to common stockholders:                           |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Income from continuing operations                                            |  | $                               | 0.97    |                                | $ | 0.79    |  | $    | 1.87    |  | $ | 1.57    |  
|Income (loss) from discontinued operation                                    |  |                                 | 0.01    |                                |   | 0.06    |  |      |        |  |   | (0.01   | )
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  
|Net income                                                                   |  | $                               | 0.98    |                                | $ | 0.85    |  | $    | 1.87    |  | $ | 1.56    |  
|                                                                             |  |                                 |         |                                |   |         |  |      |         |  |   |         |  



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7. 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:



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Dollars in millions)

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2007



|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|----------------------------------------- |  | ------ | ----- | ---- | - | --------------------- |  | - | -------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                          |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non- GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                    |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                 |  | $      |      |      | $ | 18                    |  | $ | 8                          |   |  | $                     | 86   |   |       | $ |       |   |  | $ | 112  
|Accounts receivable, net                  |  |        |      |      |   | 26                    |  |   | (18                        | ) |  |                       | 574  |   |       |   |       |   |  |   | 582  
|Intercompany receivable (payable)         |  |        |      |      |   | 467                   |  |   | 126                        |   |  |                       | (593 | ) |       |   |       |   |  |   |     
|Inventory                                 |  |        |      |      |   | 56                    |  |   | 51                         |   |  |                       | 16   |   |       |   |       |   |  |   | 123  
|Prepaid expenses and other assets         |  |        |      |      |   | 12                    |  |   | 34                         |   |  |                       | 5    |   |       |   |       |   |  |   | 51   
|Deferred taxes                            |  |        |      |      |   | 51                    |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 51   
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                      |  |        |      |      |   | 630                   |  |   | 201                        |   |  |                       | 88   |   |       |   |       |   |  |   | 919  
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Rental equipment, net                     |  |        |      |      |   | 1,492                 |  |   | 1,092                      |   |  |                       | 334  |   |       |   |       |   |  |   | 2,918
|Property and equipment, net               |  |        | 42    |      |   | 196                   |  |   | 148                        |   |  |                       | 29   |   |       |   |       |   |  |   | 415  
|Investments in subsidiaries               |  |        | 1,962 |      |   | 2,541                 |  |   |                           |   |  |                       |     |   |       |   | (4,503 | ) |  |   |     
|Goodwill and other intangible assets, net |  |        |      |      |   | 185                   |  |   | 1,067                      |   |  |                       | 155  |   |       |   |       |   |  |   | 1,407
|Other non-current assets                  |  |        | 7     |      |   | 43                    |  |   | 8                          |   |  |                       |     |   |       |   |       |   |  |   | 58   
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                              |  | $      | 2,011 |      | $ | 5,087                 |  | $ | 2,516                      |   |  | $                     | 606  |   |       | $ | (4,503 | ) |  | $ | 5,717
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY      |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt      |  | $      |      |      | $ | 78                    |  | $ |                           |   |  | $                     |     |   |       | $ |       |   |  | $ | 78   
|Accounts payable                          |  |        |      |      |   | 80                    |  |   | 139                        |   |  |                       | 29   |   |       |   |       |   |  |   | 248  
|Accrued expenses and other liabilities    |  |        |      |      |   | 248                   |  |   | 103                        |   |  |                       | 8    |   |       |   | (86    | ) |  |   | 273  
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                 |  |        |      |      |   | 406                   |  |   | 242                        |   |  |                       | 37   |   |       |   | (86    | ) |  |   | 599  
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Long-term debt                            |  |        |      |      |   | 2,318                 |  |   | 12                         |   |  |                       | 205  |   |       |   |       |   |  |   | 2,535
|Subordinated convertible debentures       |  |        | 146   |      |   |                      |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 146  
|Deferred taxes                            |  |        |      |      |   | 445                   |  |   | (9                         | ) |  |                       | 36   |   |       |   |       |   |  |   | 472  
|Other liabilities                         |  |        |      |      |   | 42                    |  |   | 58                         |   |  |                       |     |   |       |   |       |   |  |   | 100  
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                         |  |        | 146   |      |   | 3,211                 |  |   | 303                        |   |  |                       | 278  |   |       |   | (86    | ) |  |   | 3,852
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                |  |        | 1,865 |      |   | 1,876                 |  |   | 2,213                      |   |  |                       | 328  |   |       |   | (4,417 | ) |  |   | 1,865
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity              |  | $      | 2,011 |      | $ | 5,087                 |  | $ | 2,516                      |   |  | $                     | 606  |   |       | $ | (4,503 | ) |  | $ | 5,717
|                                          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Dollars in millions)

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2006



|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|--------------------------------------------- |  | ------ | ----- | ---- | - | --------------------- |  | - | -------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                              |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non- GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                        |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                     |  | $      |      |      | $ | 20                    |  | $ | 69                         |   |  | $                     | 51   |   |       | $ |       |   |  | $ | 140  
|Accounts receivable, net                      |  |        |      |      |   | 17                    |  |   | (25                        | ) |  |                       | 549  |   |       |   |       |   |  |   | 541  
|Intercompany receivable (payable)             |  |        |      |      |   | 396                   |  |   | 5                          |   |  |                       | (401 | ) |       |   |       |   |  |   |     
|Inventory                                     |  |        |      |      |   | 69                    |  |   | 64                         |   |  |                       | 20   |   |       |   |       |   |  |   | 153  
|Assets of discontinued operation              |  |        |      |      |   |                      |  |   | 160                        |   |  |                       |     |   |       |   |       |   |  |   | 160  
|Prepaid expenses and other assets             |  |        |      |      |   | 8                     |  |   | 45                         |   |  |                       |     |   |       |   |       |   |  |   | 53   
|Deferred taxes                                |  |        |      |      |   | 73                    |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 73   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                          |  |        |      |      |   | 583                   |  |   | 318                        |   |  |                       | 219  |   |       |   |       |   |  |   | 1,120
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Rental equipment, net                         |  |        |      |      |   | 1,477                 |  |   | 929                        |   |  |                       | 253  |   |       |   |       |   |  |   | 2,659
|Property and equipment, net                   |  |        | 40    |      |   | 85                    |  |   | 189                        |   |  |                       | 29   |   |       |   |       |   |  |   | 343  
|Investments in subsidiaries                   |  |        | 1,612 |      |   | 2,325                 |  |   |                           |   |  |                       |     |   |       |   | (3,937 | ) |  |   |     
|Goodwill and other intangible assets, net     |  |        |      |      |   | 167                   |  |   | 1,063                      |   |  |                       | 140  |   |       |   |       |   |  |   | 1,370
|Other non-current assets                      |  |        | 8     |      |   | 51                    |  |   | 9                          |   |  |                       | 1    |   |       |   |       |   |  |   | 69   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                                  |  | $      | 1,660 |      | $ | 4,688                 |  | $ | 2,508                      |   |  | $                     | 642  |   |       | $ | (3,937 | ) |  | $ | 5,561
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt          |  | $      |      |      | $ | 285                   |  | $ |                           |   |  | $                     |     |   |       | $ |       |   |  | $ | 285  
|Accounts payable                              |  |        |      |      |   | 68                    |  |   | 162                        |   |  |                       | 33   |   |       |   |       |   |  |   | 263  
|Accrued expenses and other liabilities        |  |        |      |      |   | 181                   |  |   | 185                        |   |  |                       | 12   |   |       |   | (86    | ) |  |   | 292  
|Liabilities related to discontinued operation |  |        |      |      |   |                      |  |   | 31                         |   |  |                       |     |   |       |   |       |   |  |   | 31   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                     |  |        |      |      |   | 534                   |  |   | 378                        |   |  |                       | 45   |   |       |   | (86    | ) |  |   | 871  
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Long-term debt                                |  |        |      |      |   | 2,163                 |  |   | 7                          |   |  |                       | 343  |   |       |   |       |   |  |   | 2,513
|Subordinated convertible debentures           |  |        | 159   |      |   |                      |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 159  
|Deferred taxes                                |  |        |      |      |   | 406                   |  |   | (32                        | ) |  |                       | 39   |   |       |   |       |   |  |   | 413  
|Other liabilities                             |  |        |      |      |   | 59                    |  |   | 45                         |   |  |                       |     |   |       |   |       |   |  |   | 104  
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                             |  |        | 159   |      |   | 3,162                 |  |   | 398                        |   |  |                       | 427  |   |       |   | (86    | ) |  |   | 4,060
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                    |  |        | 1,501 |      |   | 1,526                 |  |   | 2,110                      |   |  |                       | 215  |   |       |   | (3,851 | ) |  |   | 1,501
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity                  |  | $      | 1,660 |      | $ | 4,688                 |  | $ | 2,508                      |   |  | $                     | 642  |   |       | $ | (3,937 | ) |  | $ | 5,561
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Dollars in millions)

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2006



|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|--------------------------------------------- |  | ------ | ----- | ---- | - | --------------------- |  | - | -------------------------- | - |  | --------------------- | ---- | - | ----- | - | ------ | - |  | - | -----
|                                              |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non- GuarantorSubsidiaries |   |  | Other andEliminations |      |   | Total
|ASSETS                                        |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Cash and cash equivalents                     |  | $      |      |      | $ | 40                    |  | $ | 3                          |   |  | $                     | 76   |   |       | $ |       |   |  | $ | 119  
|Accounts receivable, net                      |  |        |      |      |   | 9                     |  |   | 7                          |   |  |                       | 486  |   |       |   |       |   |  |   | 502  
|Intercompany receivable (payable)             |  |        |      |      |   | 373                   |  |   | 144                        |   |  |                       | (517 | ) |       |   |       |   |  |   |     
|Inventory                                     |  |        |      |      |   | 66                    |  |   | 57                         |   |  |                       | 16   |   |       |   |       |   |  |   | 139  
|Assets of discontinued operation              |  |        |      |      |   |                      |  |   | 107                        |   |  |                       |     |   |       |   |       |   |  |   | 107  
|Prepaid expenses and other assets             |  |        | 8     |      |   | 8                     |  |   | 37                         |   |  |                       | 3    |   |       |   |       |   |  |   | 56   
|Deferred taxes                                |  |        |      |      |   | 82                    |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 82   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current assets                          |  |        | 8     |      |   | 578                   |  |   | 355                        |   |  |                       | 64   |   |       |   |       |   |  |   | 1,005
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Rental equipment, net                         |  |        |      |      |   | 1,427                 |  |   | 891                        |   |  |                       | 243  |   |       |   |       |   |  |   | 2,561
|Property and equipment, net                   |  |        | 38    |      |   | 97                    |  |   | 194                        |   |  |                       | 30   |   |       |   |       |   |  |   | 359  
|Investments in subsidiaries                   |  |        | 1,638 |      |   | 2,352                 |  |   |                           |   |  |                       |     |   |       |   | (3,990 | ) |  |   |     
|Goodwill and other intangible assets, net     |  |        |      |      |   | 177                   |  |   | 1,065                      |   |  |                       | 134  |   |       |   |       |   |  |   | 1,376
|Other non-current assets                      |  |        |      |      |   | 52                    |  |   | 13                         |   |  |                       |     |   |       |   |       |   |  |   | 65   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total assets                                  |  | $      | 1,684 |      | $ | 4,683                 |  | $ | 2,518                      |   |  | $                     | 471  |   |       | $ | (3,990 | ) |  | $ | 5,366
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY          |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Current maturities of long-term debt          |  | $      |      |      | $ | 37                    |  | $ |                           |   |  | $                     |     |   |       | $ |       |   |  | $ | 37   
|Accounts payable                              |  |        |      |      |   | 72                    |  |   | 118                        |   |  |                       | 28   |   |       |   |       |   |  |   | 218  
|Accrued expenses and other liabilities        |  |        |      |      |   | 176                   |  |   | 198                        |   |  |                       | 22   |   |       |   | (74    | ) |  |   | 322  
|Liabilities related to discontinued operation |  |        |      |      |   |                      |  |   | 22                         |   |  |                       |     |   |       |   |       |   |  |   | 22   
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total current liabilities                     |  |        |      |      |   | 285                   |  |   | 338                        |   |  |                       | 50   |   |       |   | (74    | ) |  |   | 599  
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Long-term debt                                |  |        |      |      |   | 2,350                 |  |   | 7                          |   |  |                       | 162  |   |       |   |       |   |  |   | 2,519
|Subordinated convertible debentures           |  |        | 146   |      |   |                      |  |   |                           |   |  |                       |     |   |       |   |       |   |  |   | 146  
|Deferred taxes                                |  |        |      |      |   | 440                   |  |   | (9                         | ) |  |                       | 32   |   |       |   |       |   |  |   | 463  
|Other liabilities                             |  |        |      |      |   | 44                    |  |   | 57                         |   |  |                       |     |   |       |   |       |   |  |   | 101  
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities                             |  |        | 146   |      |   | 3,119                 |  |   | 393                        |   |  |                       | 244  |   |       |   | (74    | ) |  |   | 3,828
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total stockholders equity                    |  |        | 1,538 |      |   | 1,564                 |  |   | 2,125                      |   |  |                       | 227  |   |       |   | (3,916 | ) |  |   | 1,538
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      
|Total liabilities and equity                  |  | $      | 1,684 |      | $ | 4,683                 |  | $ | 2,518                      |   |  | $                     | 471  |   |       | $ | (3,990 | ) |  | $ | 5,366
|                                              |  |        |       |      |   |                       |  |   |                            |   |  |                       |      |   |       |   |        |   |  |   |      



18



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##### Table of Contents

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Three Months Ended September 30, 2007



|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | ------------------------- | --- |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | --- | -
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |     |   | Total |  
|Revenues:                                                           |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Equipment rentals                                                   |  | $      |    |   |      | $ | 345                   |  | $                         | 289 |  | $                     | 85  |   |       | $ |     |   |  | $ | 719 |  
|Sales of rental equipment                                           |  |        |    |   |      |   | 42                    |  |                           | 27  |  |                       | 9   |   |       |   |     |   |  |   | 78  |  
|New equipment sales                                                 |  |        |    |   |      |   | 27                    |  |                           | 19  |  |                       | 10  |   |       |   |     |   |  |   | 56  |  
|Contractor supplies sales                                           |  |        |    |   |      |   | 39                    |  |                           | 44  |  |                       | 13  |   |       |   |     |   |  |   | 96  |  
|Service and other revenues                                          |  |        |    |   |      |   | 23                    |  |                           | 17  |  |                       | 5   |   |       |   |     |   |  |   | 45  |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Total revenues                                                      |  |        |    |   |      |   | 476                   |  |                           | 396 |  |                       | 122 |   |       |   |     |   |  |   | 994 |  
|Cost of revenues:                                                   |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 144                   |  |                           | 124 |  |                       | 35  |   |       |   |     |   |  |   | 303 |  
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 55                    |  |                           | 43  |  |                       | 13  |   |       |   |     |   |  |   | 111 |  
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 32                    |  |                           | 18  |  |                       | 6   |   |       |   |     |   |  |   | 56  |  
|Cost of new equipment sales                                         |  |        |    |   |      |   | 22                    |  |                           | 17  |  |                       | 8   |   |       |   |     |   |  |   | 47  |  
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 34                    |  |                           | 33  |  |                       | 11  |   |       |   |     |   |  |   | 78  |  
|Cost of service and other revenues                                  |  |        |    |   |      |   | 10                    |  |                           | 7   |  |                       | 3   |   |       |   |     |   |  |   | 20  |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Total cost of revenues                                              |  |        |    |   |      |   | 297                   |  |                           | 242 |  |                       | 76  |   |       |   |     |   |  |   | 615 |  
|Gross Profit                                                        |  |        |    |   |      |   | 179                   |  |                           | 154 |  |                       | 46  |   |       |   |     |   |  |   | 379 |  
|Selling, general and administrative expenses                        |  |        |    |   |      |   | 67                    |  |                           | 65  |  |                       | 20  |   |       |   |     |   |  |   | 152 |  
|Non-rental depreciation and amortization                            |  |        | 3   |   |      |   | 5                     |  |                           | 4   |  |                       | 1   |   |       |   |     |   |  |   | 13  |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Operating Income                                                    |  |        | (3  | ) |      |   | 107                   |  |                           | 85  |  |                       | 25  |   |       |   |     |   |  |   | 214 |  
|Interest expense, net                                               |  |        |    |   |      |   | 40                    |  |                           |    |  |                       | 4   |   |       |   |     |   |  |   | 44  |  
|Interest expense- subordinated convertible debentures               |  |        | 2   |   |      |   |                      |  |                           |    |  |                       |    |   |       |   |     |   |  |   | 2   |  
|Other expense (income), net                                         |  |        |    |   |      |   | 4                     |  |                           | 9   |  |                       | (17 | ) |       |   |     |   |  |   | (4  | )
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Income from continuing operations before provision for income taxes |  |        | (5  | ) |      |   | 63                    |  |                           | 76  |  |                       | 38  |   |       |   |     |   |  |   | 172 |  
|Provision for income taxes                                          |  |        | (1  | ) |      |   | 21                    |  |                           | 27  |  |                       | 14  |   |       |   |     |   |  |   | 61  |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Income from continuing operations                                   |  |        | (4  | ) |      |   | 42                    |  |                           | 49  |  |                       | 24  |   |       |   |     |   |  |   | 111 |  
|Loss from discontinued operations, net of tax                       |  |        |    |   |      |   |                      |  |                           | 1   |  |                       |    |   |       |   |      |   |  |   | 1   |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Income (loss) before equity in net earnings of subsidiaries         |  |        | (4  | ) |      |   | 42                    |  |                           | 50  |  |                       | 24  |   |       |   |     |   |  |   | 112 |  
|Equity in net earnings of subsidiaries                              |  |        | 116 |   |      |   | 74                    |  |                           |    |  |                       |    |   |       |   | (190 | ) |  |   |    |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  
|Net income (loss)                                                   |  | $      | 112 |   |      | $ | 116                   |  | $                         | 50  |  | $                     | 24  |   |       | $ | (190 | ) |  | $ | 112 |  
|                                                                    |  |        |     |   |      |   |                       |  |                           |     |  |                       |     |   |       |   |      |   |  |   |     |  



19



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##### Table of Contents

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Three Months Ended September 30, 2006



|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | ---
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | Total
|Revenues:                                                           |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Equipment rentals                                                   |  | $      |    |   |      | $ | 335                   |  | $ | 289                       |   |  | $                     | 69  |   |       | $ |     |   |  | $ | 693
|Sales of rental equipment                                           |  |        |    |   |      |   | 41                    |  |   | 36                        |   |  |                       | 10  |   |       |   |     |   |  |   | 87 
|New equipment sales                                                 |  |        |    |   |      |   | 28                    |  |   | 24                        |   |  |                       | 8   |   |       |   |     |   |  |   | 60 
|Contractor supplies sales                                           |  |        |    |   |      |   | 40                    |  |   | 50                        |   |  |                       | 12  |   |       |   |     |   |  |   | 102
|Service and other revenues                                          |  |        |    |   |      |   | 22                    |  |   | 15                        |   |  |                       | 4   |   |       |   |     |   |  |   | 41 
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Total revenues                                                      |  |        |    |   |      |   | 466                   |  |   | 414                       |   |  |                       | 103 |   |       |   |     |   |  |   | 983
|Cost of revenues:                                                   |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 145                   |  |   | 119                       |   |  |                       | 32  |   |       |   |     |   |  |   | 296
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 54                    |  |   | 41                        |   |  |                       | 12  |   |       |   |     |   |  |   | 107
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 30                    |  |   | 23                        |   |  |                       | 6   |   |       |   |     |   |  |   | 59 
|Cost of new equipment sales                                         |  |        |    |   |      |   | 22                    |  |   | 19                        |   |  |                       | 7   |   |       |   |     |   |  |   | 48 
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 32                    |  |   | 41                        |   |  |                       | 9   |   |       |   |     |   |  |   | 82 
|Cost of service and other revenues                                  |  |        |    |   |      |   | 10                    |  |   | 8                         |   |  |                       | 2   |   |       |   |     |   |  |   | 20 
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Total cost of revenues                                              |  |        |    |   |      |   | 293                   |  |   | 251                       |   |  |                       | 68  |   |       |   |     |   |  |   | 612
|Gross Profit                                                        |  |        |    |   |      |   | 173                   |  |   | 163                       |   |  |                       | 35  |   |       |   |     |   |  |   | 371
|Selling, general and administrative expenses                        |  |        |    |   |      |   | 62                    |  |   | 76                        |   |  |                       | 18  |   |       |   |     |   |  |   | 156
|Non-rental depreciation and amortization                            |  |        | 2   |   |      |   | 6                     |  |   | 3                         |   |  |                       | (1  | ) |       |   |     |   |  |   | 10 
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Operating Income                                                    |  |        | (2  | ) |      |   | 105                   |  |   | 84                        |   |  |                       | 18  |   |       |   |     |   |  |   | 205
|Interest expense, net                                               |  |        | 3   |   |      |   | 56                    |  |   | (4                        | ) |  |                       | 2   |   |       |   |     |   |  |   | 57 
|                                                                    |  |        |     |   |      |  
|Interest expense- subordinated convertible debentures               |  |        | 4   |   |      |   |                      |  |   |                          |   |  |                       |    |   |       |   |     |   |  |   | 4  
|Other expense (income), net                                         |  |        | 1   |   |      |   | 4                     |  |   | 3                         |   |  |                       | (8  | ) |       |   |     |   |  |   |   
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Income from continuing operations before provision for income taxes |  |        | (10 | ) |      |   | 45                    |  |   | 85                        |   |  |                       | 24  |   |       |   |     |   |  |   | 144
|Provision for income taxes                                          |  |        | (4  | ) |      |   | 17                    |  |   | 34                        |   |  |                       | 9   |   |       |   |     |   |  |   | 56 
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Income from continuing operations                                   |  |        | (6  | ) |      |   | 28                    |  |   | 51                        |   |  |                       | 15  |   |       |   |     |   |  |   | 88 
|Loss from discontinued operations, net of tax                       |  |        |    |   |      |   |                      |  |   | 7                         |   |  |                       |    |   |       |   |      |   |  |   | 7  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Income (loss) before equity in net earnings of subsidiaries         |  |        | (6  | ) |      |   | 28                    |  |   | 58                        |   |  |                       | 15  |   |       |   |     |   |  |   | 95 
|Equity in net earnings of subsidiaries                              |  |        | 101 |   |      |   | 73                    |  |   |                          |   |  |                       |    |   |       |   | (174 | ) |  |   |   
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    
|Net income (loss)                                                   |  | $      | 95  |   |      | $ | 101                   |  | $ | 58                        |   |  | $                     | 15  |   |       | $ | (174 | ) |  | $ | 95 
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |    



20



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##### Table of Contents

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Nine Months Ended September 30, 2007



|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | ----- | -
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | Total |  
|Revenues:                                                           |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Equipment rentals                                                   |  | $      |    |   |      | $ | 954                   |  | $ | 779                       |   |  | $                     | 214 |   |       | $ |     |   |  | $ | 1,947 |  
|Sales of rental equipment                                           |  |        |    |   |      |   | 126                   |  |   | 89                        |   |  |                       | 28  |   |       |   |     |   |  |   | 243   |  
|New equipment sales                                                 |  |        |    |   |      |   | 86                    |  |   | 63                        |   |  |                       | 28  |   |       |   |     |   |  |   | 177   |  
|Contractor supplies sales                                           |  |        |    |   |      |   | 124                   |  |   | 139                       |   |  |                       | 38  |   |       |   |     |   |  |   | 301   |  
|Service and other revenues                                          |  |        |    |   |      |   | 68                    |  |   | 50                        |   |  |                       | 15  |   |       |   |     |   |  |   | 133   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Total revenues                                                      |  |        |    |   |      |   | 1,358                 |  |   | 1,120                     |   |  |                       | 323 |   |       |   |     |   |  |   | 2,801 |  
|Cost of revenues:                                                   |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 423                   |  |   | 361                       |   |  |                       | 101 |   |       |   |     |   |  |   | 885   |  
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 162                   |  |   | 123                       |   |  |                       | 36  |   |       |   |     |   |  |   | 321   |  
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 94                    |  |   | 61                        |   |  |                       | 19  |   |       |   |     |   |  |   | 174   |  
|Cost of new equipment sales                                         |  |        |    |   |      |   | 69                    |  |   | 55                        |   |  |                       | 23  |   |       |   |     |   |  |   | 147   |  
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 107                   |  |   | 105                       |   |  |                       | 33  |   |       |   |     |   |  |   | 245   |  
|Cost of service and other revenues                                  |  |        |    |   |      |   | 32                    |  |   | 20                        |   |  |                       | 8   |   |       |   |     |   |  |   | 60    |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Total cost of revenues                                              |  |        |    |   |      |   | 887                   |  |   | 725                       |   |  |                       | 220 |   |       |   |     |   |  |   | 1,832 |  
|Gross Profit                                                        |  |        |    |   |      |   | 471                   |  |   | 395                       |   |  |                       | 103 |   |       |   |     |   |  |   | 969   |  
|Selling, general and administrative expenses                        |  |        |    |   |      |   | 180                   |  |   | 207                       |   |  |                       | 60  |   |       |   |     |   |  |   | 447   |  
|Non-rental depreciation and amortization                            |  |        | 7   |   |      |   | 15                    |  |   | 13                        |   |  |                       | 3   |   |       |   |     |   |  |   | 38    |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Operating Income                                                    |  |        | (7  | ) |      |   | 276                   |  |   | 175                       |   |  |                       | 40  |   |       |   |     |   |  |   | 484   |  
|Interest expense, net                                               |  |        |    |   |      |   | 138                   |  |   |                          |   |  |                       | 8   |   |       |   |     |   |  |   | 146   |  
|                                                                    |  |        |     |   |      |  
|Interest expense- subordinated convertible debentures               |  |        | 7   |   |      |   |                      |  |   |                          |   |  |                       |    |   |       |   |     |   |  |   | 7     |  
|Other expense (income), net                                         |  |        |    |   |      |   | 24                    |  |   | 17                        |   |  |                       | (48 | ) |       |   |     |   |  |   | (7    | )
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations before provision for income taxes |  |        | (14 | ) |      |   | 114                   |  |   | 158                       |   |  |                       | 80  |   |       |   |     |   |  |   | 338   |  
|Provision for income taxes                                          |  |        | (5  | ) |      |   | 43                    |  |   | 59                        |   |  |                       | 31  |   |       |   |     |   |  |   | 128   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations                                   |  |        | (9  | ) |      |   | 71                    |  |   | 99                        |   |  |                       | 49  |   |       |   |     |   |  |   | 210   |  
|Loss from discontinued operations, net of tax                       |  |        |    |   |      |   | 2                     |  |   | (3                        | ) |  |                       |    |   |       |   |      |   |  |   | (1    | )
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income (loss) before equity in net earnings of subsidiaries         |  |        | (9  | ) |      |   | 73                    |  |   | 96                        |   |  |                       | 49  |   |       |   |     |   |  |   | 209   |  
|Equity in net earnings of subsidiaries                              |  |        | 218 |   |      |   | 145                   |  |   |                          |   |  |                       |    |   |       |   | (363 | ) |  |   |      |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Net income (loss)                                                   |  | $      | 209 |   |      | $ | 218                   |  | $ | 96                        |   |  | $                     | 49  |   |       | $ | (363 | ) |  | $ | 209   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the Nine Months Ended September 30, 2006



|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----- | - | ---- | - |  | - | ----- | -
|                                                                    |  | Parent |     |   | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | Total |  
|Revenues:                                                           |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Equipment rentals                                                   |  | $      |    |   |      | $ | 920                   |  | $ | 775                       |   |  | $                     | 179 |   |       | $ |     |   |  | $ | 1,874 |  
|Sales of rental equipment                                           |  |        |    |   |      |   | 123                   |  |   | 99                        |   |  |                       | 26  |   |       |   |     |   |  |   | 248   |  
|New equipment sales                                                 |  |        |    |   |      |   | 82                    |  |   | 66                        |   |  |                       | 24  |   |       |   |     |   |  |   | 172   |  
|Contractor supplies sales                                           |  |        |    |   |      |   | 116                   |  |   | 139                       |   |  |                       | 33  |   |       |   |     |   |  |   | 288   |  
|Service and other revenues                                          |  |        |    |   |      |   | 65                    |  |   | 41                        |   |  |                       | 13  |   |       |   |     |   |  |   | 119   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Total revenues                                                      |  |        |    |   |      |   | 1,306                 |  |   | 1,120                     |   |  |                       | 275 |   |       |   |     |   |  |   | 2,701 |  
|Cost of revenues:                                                   |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation                   |  |        |    |   |      |   | 417                   |  |   | 341                       |   |  |                       | 92  |   |       |   |     |   |  |   | 850   |  
|Depreciation of rental equipment                                    |  |        |    |   |      |   | 154                   |  |   | 117                       |   |  |                       | 33  |   |       |   |     |   |  |   | 304   |  
|Cost of rental equipment sales                                      |  |        |    |   |      |   | 89                    |  |   | 66                        |   |  |                       | 17  |   |       |   |     |   |  |   | 172   |  
|Cost of new equipment sales                                         |  |        |    |   |      |   | 66                    |  |   | 55                        |   |  |                       | 20  |   |       |   |     |   |  |   | 141   |  
|Cost of contractor supplies sales                                   |  |        |    |   |      |   | 99                    |  |   | 108                       |   |  |                       | 27  |   |       |   |     |   |  |   | 234   |  
|Cost of service and other revenues                                  |  |        |    |   |      |   | 31                    |  |   | 20                        |   |  |                       | 7   |   |       |   |     |   |  |   | 58    |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Total cost of revenues                                              |  |        |    |   |      |   | 856                   |  |   | 707                       |   |  |                       | 196 |   |       |   |     |   |  |   | 1,759 |  
|Gross Profit                                                        |  |        |    |   |      |   | 450                   |  |   | 413                       |   |  |                       | 79  |   |       |   |     |   |  |   | 942   |  
|Selling, general and administrative expenses                        |  |        |    |   |      |   | 185                   |  |   | 215                       |   |  |                       | 53  |   |       |   |     |   |  |   | 453   |  
|Non-rental depreciation and amortization                            |  |        | 7   |   |      |   | 16                    |  |   | 11                        |   |  |                       | 3   |   |       |   |     |   |  |   | 37    |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Operating Income                                                    |  |        | (7  | ) |      |   | 249                   |  |   | 187                       |   |  |                       | 23  |   |       |   |     |   |  |   | 452   |  
|Interest expense, net                                               |  |        | 3   |   |      |   | 150                   |  |   | (3                        | ) |  |                       | 7   |   |       |   |     |   |  |   | 157   |  
|                                                                    |  |        |     |   |      |  
|Interest expense- subordinated convertible debentures               |  |        | 11  |   |      |   |                      |  |   |                          |   |  |                       |    |   |       |   |     |   |  |   | 11    |  
|Other expense (income), net                                         |  |        | 1   |   |      |   | 11                    |  |   | 10                        |   |  |                       | (22 | ) |       |   |     |   |  |   |      |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations before provision for income taxes |  |        | (22 | ) |      |   | 88                    |  |   | 180                       |   |  |                       | 38  |   |       |   |     |   |  |   | 284   |  
|Provision for income taxes                                          |  |        | (9  | ) |      |   | 35                    |  |   | 71                        |   |  |                       | 15  |   |       |   |     |   |  |   | 112   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income from continuing operations                                   |  |        | (13 | ) |      |   | 53                    |  |   | 109                       |   |  |                       | 23  |   |       |   |     |   |  |   | 172   |  
|Loss from discontinued operations, net of tax                       |  |        |    |   |      |   |                      |  |   | (1                        | ) |  |                       |    |   |       |   |      |   |  |   | (1    | )
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Income (loss) before equity in net earnings of subsidiaries         |  |        | (13 | ) |      |   | 53                    |  |   | 108                       |   |  |                       | 23  |   |       |   |     |   |  |   | 171   |  
|Equity in net earnings of subsidiaries                              |  |        | 184 |   |      |   | 131                   |  |   |                          |   |  |                       |    |   |       |   | (315 | ) |  |   |      |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  
|Net income (loss)                                                   |  | $      | 171 |   |      | $ | 184                   |  | $ | 108                       |   |  | $                     | 23  |   |       | $ | (315 | ) |  | $ | 171   |  
|                                                                    |  |        |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |       |   |      |   |  |   |       |  



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##### Table of Contents

UNITED RENTALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months Ended September 30, 2007



|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|------------------------------------------------------------------ |  | ------ | --- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | ----- |  | - | - |  | - | ---- | -
|                                                                   |  | Parent |     |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     | Total | 
|Net cash provided by operating activities - continuing operations  |  | $      | 4   |   |      | $ | 191  |                       |  | $ | 231                       |   |  | $                     | 58  |       |  | $ |  |  | $ | 484  |  
|Net cash provided by operating activities - discontinued operation |  |        |    |   |      |   |     |                       |  |   | 9                         |   |  |                       |    |       |  |   |  |  |   | 9    |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash provided by operating activities                          |  |        | 4   |   |      |   | 191  |                       |  |   | 240                       |   |  |                       | 58  |       |  |   |  |  |   | 493  |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash used in investing activities - continuing operations      |  |        | (11 | ) |      |   | (306 | )                     |  |   | (236                      | ) |  |                       | (73 | )     |  |   |  |  |   | (626 | )
|Net cash provided by investing activities - discontinued operation |  |        |    |   |      |   | 66   |                       |  |   | 1                         |   |  |                       |    |       |  |   |  |  |   | 67   |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash used in investing activities                              |  |        | (11 | ) |      |   | (240 | )                     |  |   | (235                      | ) |  |                       | (73 | )     |  |   |  |  |   | (559 | )
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net cash provided by financing activities                          |  |        | 7   |   |      |   | 27   |                       |  |   |                          |   |  |                       | 13  |       |  |   |  |  |   | 47   |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Effect of foreign exchange rate                                    |  |        |    |   |      |   |     |                       |  |   |                          |   |  |                       | 12  |       |  |   |  |  |   | 12   |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Net increase (decrease) in cash and cash equivalents               |  |        |    |   |      |   | (22  | )                     |  |   | 5                         |   |  |                       | 10  |       |  |   |  |  |   | (7   | )
|Cash and cash equivalents at beginning of period                   |  |        |    |   |      |   | 40   |                       |  |   | 3                         |   |  |                       | 76  |       |  |   |  |  |   | 119  |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  
|Cash and cash equivalents at end of period                         |  | $      |    |   |      | $ | 18   |                       |  | $ | 8                         |   |  | $                     | 86  |       |  | $ |  |  | $ | 112  |  
|                                                                   |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |       |  |   |   |  |   |      |  

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months Ended September 30, 2006



|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|------------------------------------------------------------------------- |  | ------ | --- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | ----- |  | - | - |  | - | ---- | -
|                                                                          |  | Parent |     |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      | Total | 
|Net cash provided by (used in) operating activities continuing operations |  | $      | (1  | ) |      | $ | 515  |                       |  | $ | 193                       |   |  | $                     | (118 | )     |  | $ |  |  | $ | 589  |  
|Net cash provided by operating activities - discontinued operation        |  |        |    |   |      |   |     |                       |  |   | 17                        |   |  |                       |     |       |  |   |  |  |   | 17   |  
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash provided by (used in) operating activities                       |  |        | (1  | ) |      |   | 515  |                       |  |   | 210                       |   |  |                       | (118 | )     |  |   |  |  |   | 606  |  
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash used in investing activities - continuing operations             |  |        | (10 | ) |      |   | (309 | )                     |  |   | (235                      | ) |  |                       | (61  | )     |  |   |  |  |   | (615 | )
|Net cash used in investing activities - discontinued operation            |  |        |    |   |      |   |     |                       |  |   | (11                       | ) |  |                       |     |       |  |   |  |  |   | (11  | )
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash provided by (used in) investing activities                       |  |        | (10 | ) |      |   | (309 | )                     |  |   | (246                      | ) |  |                       | (61  | )     |  |   |  |  |   | (626 | )
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net cash provided by (used in) financing activities                       |  |        | 11  |   |      |   | (386 | )                     |  |   |                          |   |  |                       | 219  |       |  |   |  |  |   | (156 | )
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Effect of foreign exchange rate                                           |  |        |    |   |      |   |     |                       |  |   |                          |   |  |                       |     |       |  |   |  |  |   |     |  
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Net increase (decrease) in cash and cash equivalents                      |  |        |    |   |      |   | (180 | )                     |  |   | (36                       | ) |  |                       | 40   |       |  |   |  |  |   | (176 | )
|Cash and cash equivalents at beginning of period                          |  |        |    |   |      |   | 200  |                       |  |   | 105                       |   |  |                       | 11   |       |  |   |  |  |   | 316  |  
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  
|Cash and cash equivalents at end of period                                |  | $      |    |   |      | $ | 20   |                       |  | $ | 69                        |   |  | $                     | 51   |       |  | $ |  |  | $ | 140  |  
|                                                                          |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |      |       |  |   |   |  |   |      |  



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##### Table of Contents

8. Subsequent Event

On October 16, 2007, we announced that URNA has commenced cash tender offers and consent
solicitations for all of its outstanding 6 1/2percent Senior Notes due 2012 (the 6 1/2percent Notes), 7 3/4percent Senior Subordinated Notes due 2013 (the 7 3/4percent Notes) and 7 percent Senior Subordinated Notes due 2014 (the 7 percent Notes and together with the 6 1/2percent Notes and the 7 3/4percent Notes, the
Notes). The Notes are comprised of (i) $1.0 billion principal amount of 6 1/2percent Notes,
(ii) $525 principal amount of 7 3/4percent Notes and (iii) $375 principal amount of 7 percent Notes.
The tender offers and consent solicitations are being conducted in connection with, and are conditioned upon among other things the consummation of, the anticipated acquisition of the Company by affiliates of Cerberus. The full terms and conditions
of the tender offers and consent solicitations are set forth in URNAs Offer to Purchase and Consent Solicitation Statement and related Consent and Letter of Transmittal, each dated October 16, 2007. The tender offers will expire at 12:00
midnight, New York City time, on November 13, 2007, unless extended or earlier terminated. The consent solicitations expired at 5:00 p.m., New York city time, on October 29, 2007. As of that time, URNA had received sufficient consents with
respect to all of the Notes (more than 98% of the principal amount in each case) to effect all proposed amendments to the indentures governing the Notes. For more information, please see our Current Report on Form 8-K, filed with the SEC on October
30, 2007.



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##### Table of Contents

|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 696 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 our 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 20,000 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 rental (used) equipment, sales of new equipment, contractor supplies sales and service and other. Rental equipment revenues
have historically accounted for approximately 70 percent of our total revenues.

In April 2007, we announced that our board of directors
had authorized the commencement of a process to explore a broad range of strategic alternatives to maximize shareholder value, including a possible sale of the Company, and had retained financial advisors in this process. We also announced the
retirement of our Chief Executive Officer, Wayland R. Hicks, effective following the conclusion of our 2007 Annual Meeting of Stockholders, which occurred on June 4, 2007, and the naming of Michael J. Kneeland as interim Chief Executive Officer
effective upon Mr. Hicks retirement. On July 23, 2007, we announced that we had signed a definitive merger agreement to be acquired by affiliates of Cerberus Capital Management, L.P. (Cerberus), in a transaction valued at
approximately $6.66 billion, inclusive of approximately $2.60 billion in outstanding debt obligations, but exclusive of transaction costs. Completion of the transaction is subject to customary closing conditions, including approval of the
transaction by our stockholders, but not to a financing condition. On October 19, 2007, at a special meeting of our stockholders, the merger agreement was approved. We currently expect the transaction to close on or about November 16, 2007, but
cannot guarantee this timing or result. For more detailed information, see our Current Reports on Form 8-K, filed with the SEC on July 24, 2007, October 19, 2007 and October 30, 2007.

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 entitled In 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.

In July 2007, we received a letter from the staff of the SEC stating that the staff intends 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, periodic filing requirements, as well as antifraud provisions as set forth in Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a),
13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, 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.

The U.S. Attorneys office 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.

Current and Future Strategy

We intend to use our
extensive fleet, broad footprint, advanced information technology systems and industry experience to generate significant cash flow and strengthen our leadership position in the equipment rental industry. We plan to achieve these objectives by:

Optimizing Our Field Operations.We intend to continue the process of analyzing and optimizing our
field operations in order to improve fleet allocation, service and delivery and sales management efforts. We expect this process will create opportunities for branch closures as fleet assets are moved from low-return branches to high-return
locations, as well as additional cost-saving opportunities such as consolidating administrative and back-office functions where possible. We believe optimizing our field operations should increase equipment utilization and reduce operating costs.

Reducing Operating Spend. In an effort to bring our cost structure in line with those of other leading equipment rental companies,
we engaged a major consulting firm in the spring of 2007 to review our back-office functions related to the general and administrative aspects of our business and identify opportunities for increased efficiencies. Such firm identified a number of
opportunities to consolidate duplicative functions, outsource back-office operations and automate processes. As a result, we have implemented a headcount reduction program and undertaken specific initiatives to reduce our selling, general and
administrative expenses.

Accelerating Sourcing Initiatives. Our rental equipment purchases have been centralized which we believe
has enabled us to negotiate more favorable pricing and other terms from our equipment providers. We launched a strategic sourcing initiative in 2006 that was designed to centralize our non-equipment purchases. We believe that centralizing the
procurement of these items will enable us to leverage our significant spend to obtain better pricing and/or terms from our suppliers. We spent over $1.2 billion in 2006 on materials, services, contractor supplies, parts, and other non-equipment
spend.

Optimizing Time Utilization. We continue to reassess existing fleet investments and realign certain incentive programs to
increase the time utilization of our fleet assets. We intend to better allocate resources to where they are needed rather than where they are located, resulting in fleet rationalization opportunities. We also expect to implement stricter fleet
investment policies to improve our return on capital. By coupling such initiatives with an increased focus on preventative maintenance and improved turn-around time for returned equipment, we believe that we can increase the time utilization of our
fleet and serve our customer base with a smaller fleet.

Deemphasizing Contractor Supplies Business. We currently sell a variety of
contractor supplies, such as construction consumables, tools, small equipment and safety supplies, through several channels, including our sales representatives, rental branches and U.S. and Canadian product catalogues. Although revenues from the
contractor supplies business have grown from $125 in 2002 to $385 in 2006, this business requires that we maintain significant volumes of inventory in order to meet customer demand and carries a higher cost structure relative to our core equipment
rental business. In 2006, the gross margin for our contractor supplies business was 21.6% versus 38.9% for our equipment rental operations (including depreciation).

Going forward, we intend to deemphasize our contractor supplies business and position it as a complementary offering to our equipment rental business. We expect this deemphasis to result in productivity improvements
within our sales force, thus helping to improve equipment utilization and rental rates, as well as result in some headcount reduction. As part of the deemphasis, we expect to reduce the number of stock keeping units associated with these operations.
Additionally, we have recently closed one of our nine distribution centers and we intend to further evaluate the closure of additional distribution centers.

Implement Like-Kind-Exchange Tax Savings Program. We use accelerated depreciation for tax purposes versus straight-line depreciation for accounting purposes. Sales of assets that have been fully depreciated for
tax purposes can therefore give rise to significant tax liabilities. We intend to explore whether we can take advantage of tax deferral opportunities that may be available under Section 1031 of the Internal Revenue Code, which permits tax gains to
be temporarily deferred as long as the proceeds from asset sales are reinvested in similar assets. We did not previously implement a similar program because of net operating loss carryforwards we had been utilizing in recent years.



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##### Table of Contents

As discussed in note 5 to our unaudited condensed consolidated financial statements, in addition to the
matters referenced above, we are also subject to certain ongoing class action and derivative suits. Although we have not accrued any amounts related to the ultimate disposition of these or the above matters to date, any liabilities resulting from an
adverse judgment or settlement of such 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.

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:



|                                      |  |                 |       |                               |   |       |  |   |      
|------------------------------------- |  | --------------- | ----- | ----------------------------- | - | ----- |  | - | -----
|                                      |  | General rentals |       | Trench safety, pump and power |   | Total
|Three months ended September 30, 2007 |  |                 |       |                               |   |       |  |   |      
|Equipment rentals                     |  | $               | 670   |                               | $ | 49    |  | $ | 719  
|Sales of rental equipment             |  |                 | 73    |                               |   | 5     |  |   | 78   
|Sales of new equipment                |  |                 | 53    |                               |   | 3     |  |   | 56   
|Contractor supplies sales             |  |                 | 92    |                               |   | 4     |  |   | 96   
|Service and other                     |  |                 | 44    |                               |   | 1     |  |   | 45   
|                                      |  |                 |       |                               |   |       |  |   |      
|Total revenue                         |  | $               | 932   |                               | $ | 62    |  | $ | 994  
|                                      |  |                 |       |                               |   |       |  |   |      
|Three months ended September 30, 2006 |  |                 |       |                               |   |       |  |   |      
|Equipment rentals                     |  | $               | 645   |                               | $ | 48    |  | $ | 693  
|Sales of rental equipment             |  |                 | 83    |                               |   | 4     |  |   | 87   
|Sales of new equipment                |  |                 | 54    |                               |   | 6     |  |   | 60   
|Contractor supplies sales             |  |                 | 98    |                               |   | 4     |  |   | 102  
|Service and other                     |  |                 | 41    |                               |   |      |  |   | 41   
|                                      |  |                 |       |                               |   |       |  |   |      
|Total revenue                         |  | $               | 921   |                               | $ | 62    |  | $ | 983  
|                                      |  |                 |       |                               |   |       |  |   |      
|Nine months ended September 30, 2007  |  |                 |       |                               |   |       |  |   |      
|Equipment rentals                     |  | $               | 1,815 |                               | $ | 132   |  | $ | 1,947
|Sales of rental equipment             |  |                 | 231   |                               |   | 12    |  |   | 243  
|Sales of new equipment                |  |                 | 167   |                               |   | 10    |  |   | 177  
|Contractor supplies sales             |  |                 | 289   |                               |   | 12    |  |   | 301  
|Service and other                     |  |                 | 130   |                               |   | 3     |  |   | 133  
|                                      |  |                 |       |                               |   |       |  |   |      
|Total revenue                         |  | $               | 2,632 |                               | $ | 169   |  | $ | 2,801
|                                      |  |                 |       |                               |   |       |  |   |      
|Nine months ended September 30, 2006  |  |                 |       |                               |   |       |  |   |      
|Equipment rentals                     |  | $               | 1,745 |                               | $ | 129   |  | $ | 1,874
|Sales of rental equipment             |  |                 | 238   |                               |   | 10    |  |   | 248  
|Sales of new equipment                |  |                 | 159   |                               |   | 13    |  |   | 172  
|Contractor supplies sales             |  |                 | 276   |                               |   | 12    |  |   | 288  
|Service and other                     |  |                 | 117   |                               |   | 2     |  |   | 119  
|                                      |  |                 |       |                               |   |       |  |   |      
|Total revenue                         |  | $               | 2,535 |                               | $ | 166   |  | $ | 2,701
|                                      |  |                 |       |                               |   |       |  |   |      



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Three months ended September 30, 2007 and 2006. Equipment rentals in 2007 of $719 increased
$26, or 4 percent, reflecting a 4.0 percentage point increase in time utilization on a larger fleet, partially offset by a 2.0 percent decline in rental rates. Equipment rentals represented 72 percent of total revenues for the three months ended
September 30, 2007. On a segment basis, equipment rentals represented approximately 72 percent and 79 percent of total revenues for general rentals and trench safety, pump and power, respectively. General rentals equipment rentals increased
$25, or 4 percent, reflecting a 3.0 percent increase in same-store rental revenues.

Nine months ended September 30, 2007
and 2006. Equipment rentals in 2007 of $1,947 increased $73, or 4 percent, reflecting a 2.5 percentage point increase in time utilization on a larger fleet, partially offset by a 0.6 percent decline in rental rates. Equipment rentals represented
70 percent of total revenues for the nine months ended September 30, 2007. On a segment basis, equipment rentals represented 69 percent and 78 percent of total revenues for general rentals and trench safety, pump and power, respectively.
General rentals equipment rentals increased $70, or 4 percent, reflecting a 3.1 percentage point increase in same-store rental revenues. Trench safety, pump and power equipment rentals increased $3, reflecting increases from cold starts. This
benefit was partially offset by a 0.3 percentage point decline in same-store revenues, reflecting the absence of the benefit we received from hurricane-related business in the prior year period.

Sales of rental equipment. For the three and nine months ended September 30, 2007, sales of rental equipment represented approximately 9
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 months ended September 30, 2007,
sales of rental equipment decreased 10 percent reflecting a change in the mix of equipment sold as we generally sold older equipment in the third quarter 2007 as compared to the prior year.

Sales of new equipment. For the three and nine months ended September 30, 2007, sales of new equipment represented 6 percent of our total
revenues and our general rentals segment accounted for approximately 95 percent of these sales. Sales of new equipment for trench safety, pump and power were insignificant. For the three months ended September 30, 2007, sales of new equipment
decreased 7 percent reflecting reduced 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 months ended September 30, 2007, sales of contractor supplies decreased 6 percent, reflecting reduced volume resulting from a third quarter repositioning of this business to refocus the sales force on our core
rental business and begin offering a narrower range of items for sale. We expect this repositioning to lead to stronger gross profit margins for contractor supplies, but on a reduced revenue base. For the nine months ended September 30, 2007,
sales of contractor supplies increased 5 percent, reflecting increased volume during the first half of the year.

Service and other.
Service and other primarily represents our revenues earned from providing 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 nine months ended September 30, 2007, service and other revenue increased 10 and 12 percent, respectively. The third quarter results reflect improved pricing and volume while the nine month
period reflects increased volume.

Segment Operating Profit

Segment operating profit and operating margin were as follows:



|                                      |  |                 |      |   |                               |   |      |       |  |   |      |  
|------------------------------------- |  | --------------- | ---- | - | ----------------------------- | - | ---- | ----- |  | - | ---- | -
|                                      |  | General rentals |      |   | Trench safety, pump and power |   |      | Total | 
|Three months ended September 30, 2007 |  |                 |      |   |                               |   |      |       |  |   |      |  
|Operating Profit                      |  | $               | 195  |   |                               | $ | 19   |       |  | $ | 214  |  
|Operating Margin                      |  |                 | 20.9 | % |                               |   | 30.6 | %     |  |   | 21.5 | %
|Three months ended September 30, 2006 |  |                 |      |   |                               |   |      |       |  |   |      |  
|Operating Profit                      |  | $               | 187  |   |                               | $ | 18   |       |  | $ | 205  |  
|Operating Margin                      |  |                 | 20.3 | % |                               |   | 29.0 | %     |  |   | 20.9 | %
|Nine months ended September 30, 2007  |  |                 |      |   |                               |   |      |       |  |   |      |  
|Operating Profit                      |  | $               | 440  |   |                               | $ | 44   |       |  | $ | 484  |  
|Operating Margin                      |  |                 | 16.7 | % |                               |   | 26.0 | %     |  |   | 17.3 | %
|Nine months ended September 30, 2006  |  |                 |      |   |                               |   |      |       |  |   |      |  
|Operating Profit                      |  | $               | 409  |   |                               | $ | 43   |       |  | $ | 452  |  
|Operating Margin                      |  |                 | 16.1 | % |                               |   | 25.9 | %     |  |   | 16.7 | %



27



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##### Table of Contents

General rentals. For the three and nine months ended September 30, 2007, our operating
margin improved 0.6 percentage points, reflecting improved selling, general and administrative expense leverage.

Trench safety, pump
and power. For the three months ended September 30, 2007, our operating margin improved 1.6 percentage points, reflecting improved selling, general and administrative expense leverage.

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



|                          |  |                                 |   |  |                                |   |  |      |   |  |      |  
|------------------------- |  | ------------------------------- | - |  | ------------------------------ | - |  | ---- | - |  | ---- | -
|                          |  | Three Months EndedSeptember 30, |   |  | Nine months EndedSeptember 30, |  
|                          |  | 2007                            |   |  | 2006                           |   |  | 2007 |   |  | 2006 |  
|Total gross margin        |  | 38.1                            | % |  | 37.7                           | % |  | 34.6 | % |  | 34.9 | %
|Equipment rentals         |  | 42.4                            | % |  | 41.8                           | % |  | 38.1 | % |  | 38.4 | %
|Sales of rental equipment |  | 28.2                            | % |  | 32.2                           | % |  | 28.4 | % |  | 30.6 | %
|Sales of new equipment    |  | 16.1                            | % |  | 20.0                           | % |  | 16.9 | % |  | 18.0 | %
|Contractor supplies sales |  | 18.8                            | % |  | 19.6                           | % |  | 18.6 | % |  | 18.8 | %
|Service and other         |  | 55.6                            | % |  | 51.2                           | % |  | 54.9 | % |  | 51.3 | %

For the three months ended September 30, 2007, total gross profit margin increased 0.4
percentage points primarily reflecting improved gross margins from equipment rentals, partially offset by reduced gross margins on sales of used equipment as well as contractor supplies sales. Equipment rentals gross margin improved 0.6 percentage
points reflecting reduced rental costs. The reduction in gross margins on sales of rental equipment reflects a change in the mix of equipment sold as a higher proportion of auction, as opposed to retail, sales occurred in the current period. The
reduction in gross margin on contractor supplies sales reflects a change in product mix.

For the nine months ended September 30,
2007, total gross profit margin decreased 0.3 percentage points primarily reflecting reduced gross margins from equipment rentals and sales of rental equipment, partially offset by improved gross margins on service and other. Equipment rentals gross
margin decreased 0.3 percentage points reflecting increased rental costs. Gross margins on sales of rental equipment decreased 2.2 percentage points reflecting a change in mix of equipment sold. The gross margin improvement in service and other
primarily reflects increased revenues from the licensing of software.

Selling, general and administrative expenses
(SG&A). SG&A expense information for the three and nine months ended September 30, 2007 and 2006 was as follows:



|                                |  |                                 |      |   |                                |   |      |      |  |   |      |   |  |   |      |  
|------------------------------- |  | ------------------------------- | ---- | - | ------------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                |  | Three Months EndedSeptember 30, |      |   | Nine months EndedSeptember 30, |  
|                                |  | 2007                            |      |   | 2006                           |   |      | 2007 |  |   | 2006 |  
|Total SG&A expenses             |  | $                               | 152  |   |                                | $ | 156  |      |  | $ | 447  |   |  | $ | 453  |  
|SG&A as a percentage of revenue |  |                                 | 15.3 | % |                                |   | 15.9 | %    |  |   | 16.0 | % |  |   | 16.8 | %

SG&A expense primarily includes sales force compensation, bad debt expense, information
technology costs, advertising and marketing expenses, third party professional fees, management salaries and clerical and administrative overhead. For the three months ended September 30, 2007, SG&A expense of $152 decreased $4 as compared
to 2006 and declined by 0.6 percentage points as a percentage of revenue. This improvement reflects reduced incentive compensation costs as well as a $1 reduction in the level of professional fees associated with regulatory matters. The benefit
associated with these matters was partially offset by increased costs incurred in conjunction with our exploration of strategic alternatives and the amendment of our former Chairmans service agreement, as well as normal inflationary increases.

For the nine months ended September 30, 2007, SG&A expense of $447 decreased $6 as compared to 2006 and declined by 0.8
percentage points as a percentage of revenue. This improvement reflects an $11 reduction in the level of professional fees related to regulatory matters and reduced bad debt expense of $7. The benefit associated with these matters was partially
offset by increased costs associated with our exploration of strategic alternatives, the amendment of our former Chairmans service agreement, and charges associated with the accelerated vesting, upon his June 4, 2007 retirement, of a
restricted stock award (see income taxes discussion below) held by our former Chief Executive Officer, as well as normal inflationary increases. For the nine month period ended September 30, 2007, the year-over-year reduction in bad debt
expense reflects improved accounts receivable collection experience, write-off trends and credit management.



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Interest expense, net for the three and nine months ended September 30, 2007 and 2006
was as follows:



|                      |  |                                 |    |                                |   |      |  |      |     |  |   |    
|--------------------- |  | ------------------------------- | -- | ------------------------------ | - | ---- |  | ---- | --- |  | - | ---
|                      |  | Three Months EndedSeptember 30, |    | Nine months EndedSeptember 30,
|                      |  | 2007                            |    | 2006                           |   | 2007 |  | 2006
|Interest expense, net |  | $                               | 44 |                                | $ | 57   |  | $    | 146 |  | $ | 157

Interest expense for the three and nine months ended September 30, 2007 decreased by $13 and
$11, respectively, and includes $7 and $3, respectively, of interest expense benefits associated with changes in the fair value of interest rate swaps which were de-designated as fair value hedges in February 2007. Interest expense for the three and
nine months ended September 30, 2007 reflects the favorable mark-to-market impact of these swaps as well as lower average debt balances, partially offset by the increase in interest rates applicable to our floating rate debt.

Income taxes. The following table summarizes our continuing operations provision for income taxes and the related effective tax rate for
the three and nine months ended September 30, 2007 and 2006:



|                                  |  |                                 |      |   |                                |   |      |      |  |   |      |   |  |   |      |  
|--------------------------------- |  | ------------------------------- | ---- | - | ------------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                  |  | Three Months EndedSeptember 30, |      |   | Nine months EndedSeptember 30, |  
|                                  |  | 2007                            |      |   | 2006                           |   |      | 2007 |  |   | 2006 |  
|Income from continuing operations |  | $                               | 172  |   |                                | $ | 144  |      |  | $ | 338  |   |  | $ | 284  |  
|Provision for income taxes        |  |                                 | 61   |   |                                |   | 56   |      |  |   | 128  |   |  |   | 112  |  
|Effective tax rate                |  |                                 | 35.5 | % |                                |   | 38.9 | %    |  |   | 37.9 | % |  |   | 39.4 | %

The difference between the consolidated effective tax rates and the U.S. federal statutory income
tax rate of 35 percent primarily relate to state taxes as well as certain non-deductible charges. During the third quarter of 2007, we recorded a benefit of $2 within the income tax provision as a result of the reversal of a valuation allowance. The
valuation allowance was related to certain state tax net operating loss carry forwards. Additionally, within the tax provision, a charge of $3 was recorded in the second quarter related to the restricted stock grant referred to in the following
paragraph and a benefit of $1 was recorded in the first quarter related to the release of a valuation allowance applicable to foreign tax credits.

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 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 legal 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.

Our principal existing
sources of cash are cash generated from operations, including from the sale of rental equipment, and borrowings available under our revolving credit facility and receivables securitization facility. As of September 30, 2007, we had
(i) $490 of borrowing capacity available under the revolving credit facility portion of our $1.55 billion senior credit facility, (ii) $255 of borrowing capacity available under our receivables securitization facility and (iii) cash
and cash equivalents of $112. We believe that our existing sources of cash will be sufficient to support our existing operations prior to the closing of the proposed acquisition of our Company by affiliates of Cerberus or, if the closing were not to
occur, over the next twelve months.



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We expect that our principal needs for cash relating to our existing operations over the next twelve
months (absent a closing of the announced merger) 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,
(iv) debt service and (v) acquisitions. We plan to fund such cash requirements from our existing sources of cash. In addition, we may seek additional financing through the securitization of some of our equipment or real estate or through
the use of additional operating leases.

If and when the announced merger closes, we expect our cash needs for debt service to increase
significantly. Currently, we anticipate refinancing our existing senior secured credit facilities and accounts receivable securitization facility with new senior secured credit facilities providing up to $2.60 billion in aggregate borrowing capacity
(approximately $1.54 billion of which we estimate will be drawn at closing). We also intend to sell approximately $2.55 billion in new second priority senior secured notes and draw down approximately $1.35 billion under a new senior unsecured bridge
credit facility. Proceeds from these financings are to be used, in conjunction with an anticipated approximately $1.43 billion in equity financing, to pay for all costs associated with the merger, including the acquisition of our outstanding equity,
the cash out of our existing equity awards, the retirement of the Notes pursuant to the terms of our currently pending tender offers, and the payment of transaction-related fees, costs and expenses.

Loan Covenants and Compliance.As of September 30, 2007, we were in compliance with the covenants and other provisions of our senior
secured credit facility, the senior notes, the subordinated convertible debentures and our accounts receivables securitization facility.

Sources and Uses of Cash  Continuing Operations. During the nine months ended September 30, 2007, we (i) generated cash from operating activities of $484, (ii) generated cash from the sale of rental
equipment of $243 and (iii) received proceeds from the exercise of common stock options of $22. We used cash during this period principally to (i) purchase rental and non-rental equipment of $866 and (ii) purchase other companies for
$23.

During the nine months ended September 30, 2006, we (i) generated cash from operating activities of $589,
(ii) generated cash from the sale of rental equipment of $248 and (iii) received proceeds from the exercise of common stock options of $64. We used cash during this period principally to (i) purchase rental and non-rental equipment of
$837, (ii) fund payments on debt, net of proceeds received, of $158, (iii) retire $64 of subordinated convertible debentures and (iv) purchase other companies for $39.

Our credit ratings as of October 26, 2007 were as follows:



|        |  |                  |  |          |    
|------- |  | ---------------- |  | -------- | ---
|        |  | Corporate Rating |  | Outlook  |    
|Moodys |  | B1               |  | RVRD     | (1)
|S&P     |  | BB-              |  | Negative |    
|Fitch   |  | BB-              |  | Stable   |    

---

|(1) | Ratings under review for possible downgrade.
|--- | --------------------------------------------

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.

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. We periodically utilize interest rate swap agreements and
interest rate cap agreements to manage our interest costs and exposure to changes in interest rates. As of September 30, 2007, we had swap agreements with an aggregate notional amount of $1.2 billion. The effects of the swap agreements were, at
September 30, 2007, to convert $1.2 billion of our fixed rate notes to floating rate instruments. The fixed rate notes being converted consisted of (i) $445 of our 6 1/2percent Notes through 2012, (ii) $375 of our 7 percent Notes through 2014, and (iii) $375 of our 73/4percent senior subordinated notes through 2013. Certain of



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##### Table of Contents

these swaps contain mutual put provisions which allow either party to terminate the swap for the market value of the swap as of certain specified dates
between 2007 and 2009. In February 2007, swaps with a notional amount of $250 were modified and, as a result, these swaps have been de-designated as fair value hedges. Accordingly, there may be volatility in our future earnings.

As of September 30, 2007, after giving effect to our interest rate swap agreements, we had an aggregate of $1.7 billion of indebtedness that bears
interest at variable rates. The debt that is subject to fluctuations in interest rates includes (i) $160 of borrowings under our revolving Canadian credit facility, (ii) $45 of borrowings under our accounts receivable securitization
facility, (iii) $1.2 billion in debt that is subject to interest rate swaps and (iv) $329 of term loans. The weighted-average effective interest rates applicable to our variable rate debt as of September 30, 2007 were (i) 6.9
percent for the revolving credit facility (represents the Canadian rate since the amount outstanding was Canadian borrowings), (ii) 5.4 percent for the accounts receivable securitization facility, (iii) 7.9 percent for the debt subject to
our swap agreements and (iv) 7.7 percent for the term loan. As of September 30, 2007, based upon the amount of our variable rate debt outstanding, after giving effect to our interest rate swap agreements, our net income would decrease by
approximately $9 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 revolving credit facility and receivables securitization facility from time to time.

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 2006 relative to the company as a whole, a 10 percent change in this exchange rate would not have a material impact on our earnings. In addition, we periodically enter into foreign exchange contracts to hedge our
transaction exposures. We had no outstanding foreign exchange contracts as of September 30, 2007. 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 September 30, 2007. 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 September 30, 2007.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2007 that materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



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

The information set forth under
note 5 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 2006

Form 10-K, which risk factors are incorporated herein by
reference, as well as to the additional risk factors described below. 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. In addition, these risk factors could cause significant fluctuations in the price of our common stock.

Our exploration of strategic alternatives, which has resulted in the signing of a definitive merger agreement with affiliates of Cerberus, may have an adverse impact on our business operations.

On April 10, 2007, we announced that our board of directors had authorized commencement of a process to explore a broad range of strategic
alternatives to maximize shareholder value, including a possible sale of the Company. On July 23, 2007, we announced that we had signed a definitive merger agreement to be acquired by affiliates of Cerberus. There are various risks and
uncertainties relating to the strategic alternatives process we have conducted and the resulting merger agreement, including:



| |  |  | management and employees may be distracted by the process and transition and lose focus on normal business operations or have their time and resources significantly
diverted;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | arriving at the merger agreement and implementing its terms is time consuming and expensive and may result in missing or not executing on near or long-term business
opportunities;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | perceived uncertainties as to our post-merger direction may result in increased difficulties and expense in recruiting and retaining employees, particularly senior
management, and may also impact our relationships with various other constituencies, such as customers and vendors; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the outcome of any legal proceedings that have been or may be instituted against us, members of our board of directors and others relating to the merger agreement.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any of the foregoing could have a material negative impact on our operating results, our financial outlook and/or the
price of our common stock.

Failure to complete the proposed merger could adversely affect the Company and our stock price.

Consummation of the proposed merger contemplated by our merger agreement with affiliates of Cerberus is subject to customary closing conditions described
in the merger agreement. We cannot guarantee that these closing conditions will be satisfied, or that the proposed merger will be successfully completed.

In the event that the proposed merger is not completed:



| |  |  | we may not be able to identify and consummate an attractive strategic alternative, and even if we do, we may not be able to successfully achieve the benefits
thereof;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we may lose key employees or members of management;
| | - |  | ---------------------------------------------------



| |  |  | our relationships with our other constituencies, such as our customers and vendors, may be substantially disrupted as a result of uncertainties with regard to our
business and prospects;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | certain significant costs related to the proposed merger, such as legal and accounting fees, are payable by us whether or not the proposed merger is completed;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | under certain circumstances, if the proposed merger is not completed, the merger agreement requires us to pay a termination (break-up) fee of up to $100,000,000;
and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the market price of shares of our common stock is likely to decline to the extent that the current market price of those shares reflects a market assumption that
the proposed merger will be completed.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Any of the foregoing could have a material negative impact on our operating results, our financial
outlook and/or the price of our common stock.

If the proposed merger closes, we will be highly leveraged and will need to devote a substantial portion
of our cash flow to debt service, which could, among other things, stress our financial resources and make it more difficult for us to cope with a downtown in our business.

In order to finance the proposed merger, we expect to incur and carry substantial additional debt, both under refinanced senior secured credit facilities
and a new senior unsecured bridge credit facility, as well as by the issuance of new second priority senior secured notes. Immediately after closing, we expect to have aggregate borrowings under such facilities (excluding approximately $138 of
outstanding letters of credit) and notes of approximately $5.44 billion, with additional borrowing capacity under such facilities of approximately $919.

This high degree of leverage could:



| |  |  | increase our vulnerability to adverse economic, industry or competitive developments;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | limit our flexibility in planning for, or reacting to, changes in our business or market conditions and place us at a competitive disadvantage compared to
competitors;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | require us to devote a substantial portion of our cash flow to debt service and reduce the funds available for other purposes, including operations, capital
expenditures and future business opportunities;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | affect our ability to obtain additional financing;
| | - |  | --------------------------------------------------



| |  |  | decrease our profitability and/or cash flow; and
| | - |  | ------------------------------------------------



| |  |  | increase the possibility that we will be unable to service our indebtedness and fund our operations.
| | - |  | ----------------------------------------------------------------------------------------------------

If we are unable to service our indebtedness and fund our operations, we will be forced to adopt an alternative strategy that may include reducing or
delaying capital expenditures, limiting our growth, seeking additional capital, selling assets and/or restructuring or refinancing our indebtedness. However, even if we adopt an alternative strategy, the strategy may not be successful and we may
continue to be unable to service our indebtedness and fund our operations.



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

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 third quarter of 2007:



|                                        |  |                                      |  |                              |      
|--------------------------------------- |  | ------------------------------------ |  | ---------------------------- | -----
|Period                                  |  | Total Number of Shares Purchased (1) |  | Average Price Paid per Share
|July 1, 2007 to July 31, 2007           |  | 66,353                               |  | $                            | 32.54
|August 1, 2007 to August 31, 2007       |  | 19,473                               |  | $                            | 32.33
|September 1, 2007 to September 30, 2007 |  | 1,139,504                            |  | $                            | 32.23
|                                        |  |                                      |  |                              |      
|Total                                   |  | 1,225,330                            |  |                              |      
|                                        |  |                                      |  |                              |      

---

|(1) | The shares were surrendered to the Company by employees in order to satisfy tax withholding obligations upon the vesting of restricted stock. These shares were not acquired pursuant
to any repurchase plan or program. August 2007 includes cashless exercise of 50,000 warrants, with 15,340 shares of common stock being reacquired and 34,660 shares of common stock issued. The shares were reacquired at $32.60 per share. September
2007 includes cashless exercise of 2,531,821 warrants, with 1,139,179 shares of common stock being reacquired and 1,392,642 shares of common stock issued. The shares were reacquired at $32.23 per share.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

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

(a) 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 to the United Rentals,
Inc. Current Report on Form 8-K filed on July 24, 2007 (the July 2007 8-K))                                                                
|               | 
|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)                                                                                      
|               | 
|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 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 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 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 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 to the
July 2007 8-K)                                                                                                                                    
|               | 
|10(a)*         |  | First Amendment, dated August 1, 2007, to the Employment Agreement between United Rentals, Inc. and Michael J. Kneeland                                                                                                                                                                                                                         
|               | 
|10(b)*         |  | Retention Benefit Agreement, dated as of July 2, 2007, between United Rentals, Inc. and Michael J. Kneeland                                                                                                                                                                                                                                     
|               | 
|10(c)*         |  | Retention Benefit Agreement, dated as of July 2, 2007, between United Rentals, Inc. and Martin Welch III                                                                                                                                                                                                                                        
|               | 
|10(d)*         |  | Retention Benefit Agreement, dated as of July 2, 2007, between United Rentals, Inc. and Roger E. Schwed                                                                                                                                                                                                                                         
|               | 
|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                                                                                                                                                                                                                                                                                           
|               | 
|99(a)          |  | Voting Agreement, dated as of July 22, 2007, among RAM Holdings, Inc. and RAM Acquisition Corp. and the other parties thereto (incorporated by
reference to Exhibit 99.1 to the July 2007 8-K)                                                                                                                                                  
|               | 
|99(b)          |  | Warrant Holders Agreement, dated as of July 22, 2007, among RAM Holdings, Inc. and RAM Acquisition Corp. and the other parties thereto (incorporated by reference to Exhibit 99.2 to the July 2007
8-K)                                                                                                                                         
|               | 
|99(c)          |  | Class Action Complaint served by Nathan Brundridge, as Trustee of and for the Brundridge Living Trust in the Superior Court of the State of Connecticut, Judicial District of Stamford Norwalk, on
September 28, 2007 (incorporated by reference to Exhibit 99.1 of the United Rentals, Inc. Current Report on Form 8-K filed on October 5,2007)

---

|* | 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: October 31, 2007 |  |  |  | By:                                  |  | /s/ TODD G. HELVIE                                                            
|                        |  |  |  |                                      |  | Todd G. Helvie                                                                
|                        |  |  |  |                                      |  | Senior Vice President and Controller                                          
|                        |  |  | 
|                        |  |  |  |                                      |  | /s/ JOHN J. FAHEY                                                             
|                        |  |  |  |                                      |  | John J. Fahey                                                                 
|                        |  |  |  |                                      |  | Vice President-Assistant Corporate Controller and Principal Accounting Officer
|                        |  | 
|                        |  |  |  | UNITED RENTALS (NORTH AMERICA), INC.
|                        |  |  | 
|Dated: October 31, 2007 |  |  |  | By:                                  |  | /s/ TODD G. HELVIE                                                            
|                        |  |  |  |                                      |  | Todd G. Helvie                                                                
|                        |  |  |  |                                      |  | Senior Vice President and Controller                                          
|                        |  |  | 
|                        |  |  |  |                                      |  | /s/ JOHN J. FAHEY                                                             
|                        |  |  |  |                                      |  | John J. Fahey                                                                 
|                        |  |  |  |                                      |  | Vice President-Assistant Corporate Controller and Principal Accounting Officer



35