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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



|þ | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended September 30, 2006



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

For the transition period from              to

Commission File Number 1-14387

United Rentals, Inc.

Commission
File Number 1-13663

United Rentals (North America), Inc.

(Exact Names of Registrants as Specified in Their Charters)



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|                                                  |  |                                      
|------------------------------------------------- |  | -------------------------------------
|Delaware Delaware                                 |  | 06-1522496 06-1493538                
|(States 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.    þ  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    þ |  | 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    þ  No

As of October 20, 2006, there were 81,109,020 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 form 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,
2006

INDEX



|        |  |                                                                                                                                                  |  |     
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|        |  |                                                                                                                                                  |  | Page
|PART I  |  | FINANCIAL INFORMATION                                                                                                                            |  |     
|        |  |                                                                                                                                                 
|Item 1  |  | Unaudited Condensed Consolidated Financial Statements:                                                                                           |  |     
|        |  |                                                                                                                                                 
|        |  | United Rentals, Inc. Condensed Consolidated Balance Sheets as of September 30, 2006, September 30, 2005 and December 31, 2005 (unaudited)        |  | 3   
|        |  |                                                                                                                                                 
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2006 and 2005 (unaudited) |  | 4   
|        |  |                                                                                                                                                 
|        |  | United Rentals, Inc. Condensed Consolidated Statement of Stockholders Equity for the Nine Months Ended September 30, 2006 (unaudited)           |  | 5   
|        |  |                                                                                                                                                 
|        |  | United Rentals, Inc. Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2006 and 2005 (unaudited)           |  | 6   
|        |  |                                                                                                                                                 
|        |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                   |  | 7   
|        |  |                                                                                                                                                 
|Item 2  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                            |  | 24  
|        |  |                                                                                                                                                 
|Item 3  |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                       |  | 33  
|        |  |                                                                                                                                                 
|Item 4  |  | Controls and Procedures                                                                                                                          |  | 34  
|        |  |                                                                                                                                                 
|PART II |  | OTHER INFORMATION                                                                                                                                |  |     
|        |  |                                                                                                                                                 
|Item 1  |  | Legal Proceedings                                                                                                                                |  | 36  
|        |  |                                                                                                                                                 
|Item 1A |  | Risk Factors                                                                                                                                     |  | 36  
|        |  |                                                                                                                                                 
|Item 2  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                      |  | 36  
|        |  |                                                                                                                                                 
|Item 6  |  | Exhibits                                                                                                                                         |  | 37  
|        |  |                                                                                                                                                 
|        |  | Signatures                                                                                                                                       |  | 38  



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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 and unless otherwise indicated)



|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ----- | ----------------- | - | ----- | ---------------- |  | - | ----- | -
|                                                                                                                                                                                                                                                             |  | September 30,2006 |       | September 30,2005 |   |       | December 31,2005 | 
|ASSETS                                                                                                                                                                                                                                                       |  |                   |       |                   |   |       |                  |  |   |       |  
|Cash and cash equivalents                                                                                                                                                                                                                                    |  | $                 | 140   |                   | $ | 151   |                  |  | $ | 316   |  
|Accounts receivable, net of allowance for doubtful accounts of $40 on September 30, 2006, $43 on September 30, 2005 and $45 on
December 31, 2005                                                                                                             |  |                   | 615   |                   |   | 584   |                  |  |   | 572   |  
|Inventory                                                                                                                                                                                                                                                    |  |                   | 174   |                   |   | 180   |                  |  |   | 174   |  
|Prepaid expenses and other assets                                                                                                                                                                                                                            |  |                   | 123   |                   |   | 158   |                  |  |   | 154   |  
|Rental equipment, net                                                                                                                                                                                                                                        |  |                   | 2,688 |                   |   | 2,443 |                  |  |   | 2,351 |  
|Property and equipment, net                                                                                                                                                                                                                                  |  |                   | 378   |                   |   | 338   |                  |  |   | 346   |  
|Goodwill                                                                                                                                                                                                                                                     |  |                   | 1,340 |                   |   | 1,300 |                  |  |   | 1,328 |  
|Other intangible assets, net                                                                                                                                                                                                                                 |  |                   | 30    |                   |   | 34    |                  |  |   | 33    |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|                                                                                                                                                                                                                                                             |  | $                 | 5,488 |                   | $ | 5,188 |                  |  | $ | 5,274 |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|                                                                                                                                                                                                                                                             |  |                   |      
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                         |  |                   |       |                   |   |       |                  |  |   |       |  
|Liabilities:                                                                                                                                                                                                                                                 |  |                   |       |                   |   |       |                  |  |   |       |  
|Accounts payable                                                                                                                                                                                                                                             |  | $                 | 267   |                   | $ | 243   |                  |  | $ | 211   |  
|Accrued expenses and other liabilities                                                                                                                                                                                                                       |  |                   | 423   |                   |   | 367   |                  |  |   | 420   |  
|Debt                                                                                                                                                                                                                                                         |  |                   | 2,798 |                   |   | 2,936 |                  |  |   | 2,930 |  
|Subordinated convertible debentures                                                                                                                                                                                                                          |  |                   | 159   |                   |   | 222   |                  |  |   | 222   |  
|Deferred taxes                                                                                                                                                                                                                                               |  |                   | 340   |                   |   | 239   |                  |  |   | 262   |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|Total liabilities                                                                                                                                                                                                                                            |  |                   | 3,987 |                   |   | 4,007 |                  |  |   | 4,045 |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|Stockholders equity:                                                                                                                                                                                                                                        |  |                   |       |                   |   |       |                  |  |   |       |  
|Preferred stock$0.01 par value, 5,000,000 shares authorized:                                                                                                                                                                                                |  |                   |       |                   |   |       |                  |  |   |       |  
|Series C perpetual convertible preferred stock$.30 liquidation preference, 300,000 shares issued and outstanding                                                                                                                                            |  |                   |      |                   |   |      |                  |  |   |      |  
|Series D perpetual convertible preferred stock$.15 liquidation preference, 150,000 shares issued and outstanding                                                                                                                                            |  |                   |      |                   |   |      |                  |  |   |      |  
|Common stock$.01 par value, 500,000,000 shares authorized, 80,570,247 shares issued and outstanding on September 30, 2006,
77,443,139 shares issued and outstanding on September 30, 2005 and 77,302,915 shares issued and outstanding on December 31, 2005 |  |                   | 1     |                   |   | 1     |                  |  |   | 1     |  
|Additional paid-in capital                                                                                                                                                                                                                                   |  |                   | 1,424 |                   |   | 1,349 |                  |  |   | 1,345 |  
|Deferred compensation                                                                                                                                                                                                                                        |  |                   |      |                   |   | (15   | )                |  |   | (12   | )
|Retained earnings (accumulated deficit)                                                                                                                                                                                                                      |  |                   | 16    |                   |   | (204  | )                |  |   | (155  | )
|Accumulated other comprehensive income                                                                                                                                                                                                                       |  |                   | 60    |                   |   | 50    |                  |  |   | 50    |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|Total stockholders equity                                                                                                                                                                                                                                   |  |                   | 1,501 |                   |   | 1,181 |                  |  |   | 1,229 |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  
|                                                                                                                                                                                                                                                             |  | $                 | 5,488 |                   | $ | 5,188 |                  |  | $ | 5,274 |  
|                                                                                                                                                                                                                                                             |  |                   |       |                   |   |       |                  |  |   |       |  

See accompanying notes.



3



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

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



|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|---------------------------------------------------- |  | ------------------------------- | ----- | ---- | ------------------------------ | ---- | ---- |  | ---- | ----- |  | - | ----- | -
|                                                     |  | Three Months EndedSeptember 30, |       |      | Nine Months EndedSeptember 30, |     
|                                                     |  | 2006                            |       | 2005 |                                |      | 2006 |  | 2005 |      
|Revenues:                                            |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Equipment rentals                                    |  | $                               | 773   |      | $                              | 737  |      |  | $    | 2,061 |  | $ | 1,877 |  
|Sales of rental equipment                            |  |                                 | 87    |      |                                | 61   |      |  |      | 250   |  |   | 228   |  
|New equipment sales                                  |  |                                 | 60    |      |                                | 55   |      |  |      | 174   |  |   | 151   |  
|Contractor supplies sales                            |  |                                 | 109   |      |                                | 89   |      |  |      | 306   |  |   | 238   |  
|Service and other revenues                           |  |                                 | 41    |      |                                | 37   |      |  |      | 119   |  |   | 104   |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Total revenues                                       |  |                                 | 1,070 |      |                                | 979  |      |  |      | 2,910 |  |   | 2,598 |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Cost of revenues:                                    |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Cost of equipment rentals, excluding depreciation    |  |                                 | 354   |      |                                | 354  |      |  |      | 1,000 |  |   | 955   |  
|Depreciation of rental equipment                     |  |                                 | 112   |      |                                | 103  |      |  |      | 319   |  |   | 303   |  
|Cost of rental equipment sales                       |  |                                 | 60    |      |                                | 43   |      |  |      | 173   |  |   | 165   |  
|Cost of new equipment sales                          |  |                                 | 49    |      |                                | 45   |      |  |      | 143   |  |   | 124   |  
|Cost of contractor supplies sales                    |  |                                 | 86    |      |                                | 69   |      |  |      | 246   |  |   | 181   |  
|Cost of service and other revenue                    |  |                                 | 19    |      |                                | 20   |      |  |      | 57    |  |   | 52    |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Total cost of revenues                               |  |                                 | 680   |      |                                | 634  |      |  |      | 1,938 |  |   | 1,780 |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Gross profit                                         |  |                                 | 390   |      |                                | 345  |      |  |      | 972   |  |   | 818   |  
|Selling, general and administrative expenses         |  |                                 | 164   |      |                                | 162  |      |  |      | 480   |  |   | 419   |  
|Non-rental depreciation and amortization             |  |                                 | 10    |      |                                | 10   |      |  |      | 38    |  |   | 28    |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Operating income                                     |  |                                 | 216   |      |                                | 173  |      |  |      | 454   |  |   | 371   |  
|Interest expense, net                                |  |                                 | 58    |      |                                | 48   |      |  |      | 160   |  |   | 134   |  
|Interest expensesubordinated convertible debentures |  |                                 | 4     |      |                                | 4    |      |  |      | 11    |  |   | 12    |  
|Other (income) expense, net                          |  |                                 |      |      |                                | (5   | )    |  |      |      |  |   | (2    | )
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Income before provision for income taxes             |  |                                 | 154   |      |                                | 126  |      |  |      | 283   |  |   | 227   |  
|Provision for income taxes                           |  |                                 | 59    |      |                                | 50   |      |  |      | 112   |  |   | 89    |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Net income                                           |  | $                               | 95    |      | $                              | 76   |      |  | $    | 171   |  | $ | 138   |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Earnings per sharebasic:                            |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Income available to common stockholders              |  | $                               | 0.97  |      | $                              | 0.80 |      |  | $    | 1.77  |  | $ | 1.45  |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Earnings per sharediluted:                          |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  
|Income available to common stockholders              |  | $                               | 0.85  |      | $                              | 0.71 |      |  | $    | 1.56  |  | $ | 1.32  |  
|                                                     |  |                                 |       |      |                                |      |      |  |      |       |  |   |       |  

See accompanying notes.



4



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited)

(In millions)



|                                                                                          |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------------ | - | ------------------------------------------ | - | ------------ |  | ------------------------ |  | - | -------------------- |  | - | -------------------------------------- | - |  | ------------------- | --- | - | ----------------------------------- | - | ---- | - |  | - | --- | - |  | - | -- | -
|                                                                                          |  | Series CPerpetualConvertiblePreferredStock |   | Series DPerpetualConvertiblePreferredStock |   | Common Stock |  | AdditionalPaid-inCapital |  |   | DeferredCompensation |  |   | RetainedEarnings /(AccumulatedDeficit) |   |  | ComprehensiveIncome |     |   | AccumulatedOtherComprehensiveIncome |  
|                                                                                          |  |                                            |   | Number ofShares                            |   | Amount       |  |                          |  |   |                     
|Balance, December 31, 2005                                                                |  | $                                          |  |                                            | $ |             |  | 77                       |  | $ | 1                    |  | $ | 1,345                                  |   |  | $                   | (12 | ) |                                     | $ | (155 | ) |  |   |     |   |  | $ | 50 |  
|Comprehensive income:                                                                     |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Net income                                                                                |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   | 171  |   |  | $ | 171 |   |  |   |    |  
|Other comprehensive income:                                                               |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Foreign currency translation adjustments                                                  |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   | 11  |   |  |   | 11 |  
|Derivatives qualifying as hedges, net of tax of ($1)                                      |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   | (1  | ) |  |   | (1 | )
|                                                                                          |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Comprehensive income                                                                      |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  | $ | 181 |   |  |   |    |  
|                                                                                          |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Reclassification of unearned stock compensation in connection with adoption of FAS 123(R) |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   | (12                                    | ) |  |                     | 12  |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Exercise of common stock options and warrants                                             |  |                                            |   |                                            |   |              |  | 4                        |  |   |                      |  |   | 64                                     |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Tax benefit on vesting of restricted stock and exercise of stock options                  |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   | 18                                     |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Amortization of stock compensation                                                        |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   | 11                                     |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Other                                                                                     |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   | (2                                     | ) |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|                                                                                          |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  
|Balance, September 30, 2006                                                               |  | $                                          |  |                                            | $ |             |  | 81                       |  | $ | 1                    |  | $ | 1,424                                  |   |  | $                   |    |   |                                     | $ | 16   |   |  |   |     |   |  | $ | 60 |  
|                                                                                          |  |                                            |   |                                            |   |              |  |                          |  |   |                      |  |   |                                        |   |  |                     |     |   |                                     |   |      |   |  |   |     |   |  |   |    |  



5



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UNITED RENTALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in millions)



|                                                                                                                                            |  |                                |      |   |      |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---- | - | ---- | - | ---- | -
|                                                                                                                                            |  | Nine Months EndedSeptember 30, |     
|                                                                                                                                            |  | 2006                           |      |   | 2005 |  
|Cash Flows From Operating Activities:                                                                                                       |  |                                |      |   |      |   |      |  
|Net income                                                                                                                                  |  | $                              | 171  |   |      | $ | 138  |  
|Adjustments to reconcile net income to net cash provided by operating activities:                                                           |  |                                |      |   |      |   |      |  
|Depreciation and amortization                                                                                                               |  |                                | 365  |   |      |   | 336  |  
|Gain on sales of rental equipment                                                                                                           |  |                                | (77  | ) |      |   | (63  | )
|Gain on sales of non-rental equipment                                                                                                       |  |                                | (4   | ) |      |   | (2   | )
|Write-off of deferred financing fees and unamortized premiums on interest rate caps                                                         |  |                                | 8    |   |      |   |     |  
|Non-cash adjustments to equipment                                                                                                           |  |                                | 17   |   |      |   | 21   |  
|Amortization of deferred compensation                                                                                                       |  |                                | 11   |   |      |   | 6    |  
|Increase in deferred taxes                                                                                                                  |  |                                | 92   |   |      |   | 87   |  
|Changes in operating assets and liabilities:                                                                                                |  |                                |      |   |      |   |      |  
|Accounts receivable                                                                                                                         |  |                                | (42  | ) |      |   | (95  | )
|Inventory                                                                                                                                   |  |                                | 1    |   |      |   | (62  | )
|Prepaid expenses and other assets                                                                                                           |  |                                | 11   |   |      |   | (7   | )
|Accounts payable                                                                                                                            |  |                                | 56   |   |      |   | 26   |  
|Accrued expenses and other liabilities                                                                                                      |  |                                | (3   | ) |      |   | 29   |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Net cash provided by operating activities                                                                                                   |  |                                | 606  |   |      |   | 414  |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Cash Flows From Investing Activities:                                                                                                       |  |                                |      |   |      |   |      |  
|Purchases of rental equipment                                                                                                               |  |                                | (770 | ) |      |   | (680 | )
|Purchases of non-rental equipment                                                                                                           |  |                                | (81  | ) |      |   | (56  | )
|Proceeds from sales of rental equipment                                                                                                     |  |                                | 250  |   |      |   | 228  |  
|Proceeds from sales of non-rental equipment                                                                                                 |  |                                | 14   |   |      |   | 9    |  
|Purchases of other companies                                                                                                                |  |                                | (39  | ) |      |   | (3   | )
|Proceeds from sales of rental locations                                                                                                     |  |                                |     |   |      |   | 2    |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Net cash used in investing activities                                                                                                       |  |                                | (626 | ) |      |   | (500 | )
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Cash Flows From Financing Activities:                                                                                                       |  |                                |      |   |      |   |      |  
|Cash proceeds from borrowings under credit facility                                                                                         |  |                                | 65   |   |      |   |     |  
|Cash proceeds from borrowings under accounts receivable securitization facility                                                             |  |                                | 200  |   |      |   |     |  
|Payments of financing costs                                                                                                                 |  |                                |     |   |      |   | (34  | )
|Payments of debt, including $400 prepayment of term loan in 2006                                                                            |  |                                | (423 | ) |      |   | (32  | )
|Company-obligated mandatorily redeemable convertible securities of a subsidiary trust repurchased and retired, including premium paid of
$1 |  |                                | (64  | ) |      |   |     |  
|Proceeds from the exercise of common stock options                                                                                          |  |                                | 64   |   |      |   | 1    |  
|Proceeds received in conjunction with partial termination of interest rate caps                                                             |  |                                | 3    |   |      |   |     |  
|Other                                                                                                                                       |  |                                | (1   | ) |      |   | (2   | )
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Net cash used in financing activities                                                                                                       |  |                                | (156 | ) |      |   | (67  | )
|Effect of foreign exchange rates                                                                                                            |  |                                |     |   |      |   | 1    |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Net decrease in cash and cash equivalents                                                                                                   |  |                                | (176 | ) |      |   | (152 | )
|Cash and cash equivalents at beginning of period                                                                                            |  |                                | 316  |   |      |   | 303  |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  
|Cash and cash equivalents at end of period                                                                                                  |  | $                              | 140  |   |      | $ | 151  |  
|                                                                                                                                            |  |                                |      |   |      |   |      |  

See accompanying notes.



6



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share data and 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 ownership of all of the 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 services. The nature of our business is such that short-term obligations are typically met by cash flow generated from long-term assets. Therefore, the
accompanying balance sheets are presented on an unclassified basis.

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, 2005 (the 2005 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 2005 Form 10-K. Certain reclassifications have been made to prior year financial information to conform to the current year presentation. These reclassifications include the
reclassification of the amortization of deferred financing costs from Non-rental depreciation and amortization to Interest expense, net, the reclassification of certain customer rebates from Selling, general and administrative expenses to contra
revenue and the reclassification of the depreciation expense for certain vehicles from Non-rental depreciation and amortization to Depreciation of rental equipment.

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.

In August 2004, we received
notice from the SEC that it was conducting a non-public, fact-finding inquiry of the Company. The SEC inquiry appears to relate to a broad range of the Companys accounting practices and is not confined to a specific period. In March 2005, our
board of directors formed a special committee of independent directors (the Special Committee) to review matters related to the SEC inquiry. Our 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 2005 Form 10-K.

Recent Accounting Changes and New Accounting Standards

Effective January 1, 2006, we adopted Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based Payment
(FAS 123(R)), which is an amendment of SFAS No. 123, Accounting for Stock-Based Compensation (FAS123), using the modified prospective transition method, and therefore we did not restate the results of prior
periods.

The effect of adopting FAS 123(R) on our net income for the three and nine months ended September 30, 2006 was not material.
FAS 123(R) requires that cash flows from tax benefits resulting from tax deductions in



7



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



excess of the compensation cost recognized for stock-based awards (excess tax benefits) be classified as financing cash flows prospectively from
January 1, 2006. Prior to the adoption of FAS 123(R), such excess tax benefits were presented as operating cash flows.

Refer to notes
2 and 14 in our 2005 Form 10-K for further information regarding our adoption of FAS 123(R) and our stock-based compensation arrangements, including related disclosures required upon the adoption of FAS 123(R).

Restricted stock awards are issued at the fair value of the stock on the grant date. Prior to the adoption of FAS 123(R), unearned compensation for
grants of restricted stock equivalent to the fair value of the shares at the date of grant was recorded as a separate component of stockholders equity and subsequently amortized to compensation expense over the awards vesting period. In
accordance with FAS 123(R), stockholders equity is credited commensurate with the recognition of compensation expense. All unamortized unearned compensation at January 1, 2006 was reclassified to additional paid-in capital.

Prior to January 1, 2006, in accordance with Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, we did not recognize compensation expense relating to employee stock options because the exercise price was equal to or greater than the market price at the date of grant. If we had elected to recognize compensation expense using a
fair value approach as required by FAS 123, our pro forma income and earnings per share for the three and nine months ended September 30, 2005 would have been as follows:



|                                                                                          |  |                                      |      |   |                                     |   |      |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------ | ---- | - | ----------------------------------- | - | ---- | -
|                                                                                          |  | Three Months EndedSeptember 30, 2005 |      |   | Nine Months EndedSeptember 30, 2005 |  
|Net income as reported                                                                    |  | $                                    | 76   |   |                                     | $ | 138  |  
|Plus: Stock-based compensation expense included in reported net income, net of tax        |  |                                      |     |   |                                     |   | 4    |  
|Less: Stock-based compensation expense determined using the fair value method, net of tax |  |                                      | (1   | ) |                                     |   | (5   | )
|                                                                                          |  |                                      |      |   |                                     |   |      |  
|Pro forma net income                                                                      |  | $                                    | 75   |   |                                     | $ | 137  |  
|                                                                                          |  |                                      |      |   |                                     |   |      |  
|Basic earnings per share:                                                                 |  |                                      |      |   |                                     |   |      |  
|As reported                                                                               |  | $                                    | 0.80 |   |                                     | $ | 1.45 |  
|Pro forma                                                                                 |  | $                                    | 0.79 |   |                                     | $ | 1.45 |  
|Diluted earnings per share:                                                               |  |                                      |      |   |                                     |   |      |  
|As reported                                                                               |  | $                                    | 0.71 |   |                                     | $ | 1.32 |  
|Pro forma                                                                                 |  | $                                    | 0.70 |   |                                     | $ | 1.32 |  

In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation
No. 48, Accounting for Uncertainty in Income Taxes (an interpretation of FAS 109, Accounting for Income Taxes), which is effective for fiscal years beginning after December 15, 2006 with earlier adoption encouraged.
This interpretation was issued to clarify the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. We are currently evaluating the potential impact of this interpretation.

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



8



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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.

2.    Segment Information

Our reportable segments are general rentals, trench
safety, pump and power and traffic control. 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. The traffic control segment includes the rental of equipment used in the management of traffic-related services and activities. The traffic control segments customers
include construction companies involved in infrastructure projects and municipalities. The traffic control segment operates in the United States. All three reporting segments generate revenues from equipment rentals as well as the sale of new and
used equipment and related contractor supplies. Our external segment reporting is aligned with the manner in which management evaluates and allocates resources. We evaluate segment performance based on segment operating results.

Operating segment financial information for the three and nine months ended September 30, 2006 and 2005 were as follows:



|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|-------------------------------------------- |  | ------------------------------- | ----- | ---- | ------------------------------ | --- | ---- |  | - | ----- | - |  | - | ----- | -
|                                             |  | Three Months EndedSeptember 30, |       |      | Nine Months EndedSeptember 30, |    
|                                             |  | 2006                            |       | 2005 |                                |     | 2006 |  |   | 2005  |  
|Total revenues:                              |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|General rentals                              |  | $                               | 921   |      | $                              | 844 |      |  | $ | 2,535 |   |  | $ | 2,268 |  
|Trench safety, pump and power                |  |                                 | 62    |      |                                | 52  |      |  |   | 166   |   |  |   | 130   |  
|Traffic control                              |  |                                 | 87    |      |                                | 83  |      |  |   | 209   |   |  |   | 200   |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Total revenues                               |  | $                               | 1,070 |      | $                              | 979 |      |  | $ | 2,910 |   |  | $ | 2,598 |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Total depreciation and amortization expense: |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|General rentals                              |  | $                               | 111   |      | $                              | 104 |      |  | $ | 324   |   |  | $ | 300   |  
|Trench safety, pump and power                |  |                                 | 6     |      |                                | 4   |      |  |   | 17    |   |  |   | 14    |  
|Traffic control                              |  |                                 | 5     |      |                                | 5   |      |  |   | 16    |   |  |   | 17    |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Total depreciation and amortization expense  |  | $                               | 122   |      | $                              | 113 |      |  | $ | 357   |   |  | $ | 331   |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Segment operating income (loss):             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|General rentals                              |  | $                               | 190   |      | $                              | 156 |      |  | $ | 414   |   |  | $ | 350   |  
|Trench safety, pump and power                |  |                                 | 18    |      |                                | 18  |      |  |   | 44    |   |  |   | 35    |  
|Traffic control                              |  |                                 | 8     |      |                                | (1  | )    |  |   | (4    | ) |  |   | (14   | )
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Segment operating income                     |  | $                               | 216   |      | $                              | 173 |      |  | $ | 454   |   |  | $ | 371   |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Total capital expenditures:                  |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|General rentals                              |  | $                               | 177   |      | $                              | 201 |      |  | $ | 800   |   |  | $ | 687   |  
|Trench safety, pump and power                |  |                                 | 11    |      |                                | 14  |      |  |   | 40    |   |  |   | 33    |  
|Traffic control                              |  |                                 | 4     |      |                                | 6   |      |  |   | 11    |   |  |   | 16    |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  
|Total capital expenditures                   |  | $                               | 192   |      | $                              | 221 |      |  | $ | 851   |   |  | $ | 736   |  
|                                             |  |                                 |       |      |                                |     |      |  |   |       |   |  |   |       |  



9



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



|                              |  |                   |       |                   |   |                  |  |   |      
|----------------------------- |  | ----------------- | ----- | ----------------- | - | ---------------- |  | - | -----
|                              |  | September 30,2006 |       | September 30,2005 |   | December 31,2005
|Total assets:                 |  |                   |       |                   |   |                  |  |   |      
|General rentals               |  | $                 | 5,171 |                   | $ | 4,811            |  | $ | 4,929
|Trench safety, pump and power |  |                   | 157   |                   |   | 123              |  |   | 116  
|Traffic control               |  |                   | 160   |                   |   | 254              |  |   | 229  
|                              |  |                   |       |                   |   |                  |  |   |      
|Total assets                  |  | $                 | 5,488 |                   | $ | 5,188            |  | $ | 5,274
|                              |  |                   |       |                   |   |                  |  |   |      

3.    Acquisitions

We completed two acquisitions during the nine months ended September 30, 2006 and none during the nine months ended September 30, 2005. The
results of operations of the businesses acquired in these acquisitions have been included in our results of operations from the respective acquisition dates. In March 2006, we acquired the equipment and sales assets of Handy Rent-All Center, which
had annual revenues of approximately $16. The aggregate purchase price for this acquisition was approximately $23. In June 2006, we acquired the equipment and sales assets of D. Larry Carter, Inc., which had annual revenues of approximately $10. The
aggregate purchase price for this acquisition was approximately $18. Pro forma results of operations giving effect to these acquisitions would not vary materially from our historical results.

The purchase price for these acquisitions has been allocated to the assets acquired and liabilities assumed based on their fair values at the respective
acquisition dates. Purchase price allocations are subject to change when additional information concerning asset and liability valuations is completed. The preliminary purchase price allocations that are subject to change primarily consist of rental
and non-rental equipment valuations. These allocations are finalized within twelve months of the acquisition date and are not expected to result in significant differences between the preliminary and final allocations.

4.    Goodwill and Other Intangible Assets

The carrying amount of the Companys goodwill was $1,340 at September 30, 2006, $1,300 at September 30, 2005 and $1,328 at December 31, 2005. We 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 conduct an earlier review. The scheduled review date is October 1 of each year.

Prior to January 1, 2004, we tested for goodwill impairment on a branch-by-branch basis. Accordingly, a goodwill write-off was required even if only
one or a limited number of our branches had an impairment as of the testing date and even if there was no impairment for all our branches on an aggregate basis. Commencing January 1, 2004, we began testing for goodwill impairment at a regional,
rather than a branch, level. We began testing for impairment at this level because SFAS No. 142, Goodwill and Other Intangible Assets requires that goodwill impairment testing be performed at the reporting unit level. In 2004,
following a reorganization of our reporting structure, our regions became our reporting units. As disclosed in our 2005 Form 10-K, this change in reporting units may impact future goodwill impairment analyses because there are substantially fewer
regions (nine) than there are branches (in excess of 700). In the third quarter of 2006, there was a further reorganization of our reporting structure. As a result of this change, which has no impact on our reporting segments, we now have twelve
regions rather than nine. Our regions are still our reporting units.

Other intangible assets consist of customer relationships and
non-compete agreements and are amortized over periods ranging from three to twelve years. Amortization expense for other intangible assets was $1 for the



10



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



three months ended September 30, 2006 and 2005 and $3 for the nine months ended September 30, 2006 and 2005. The cost of other intangible assets
and the related accumulated amortization as of September 30, 2006 was $61 and $(31) respectively.

5.    Debt and Subordinated
Convertible Debentures

Debt consists of the following:



|                                                  |  |                   |       |                   |   |                  |  |   |      
|------------------------------------------------- |  | ----------------- | ----- | ----------------- | - | ---------------- |  | - | -----
|                                                  |  | September 30,2006 |       | September 30,2005 |   | December 31,2005
|Credit Facility                                   |  | $                 | 208   |                   | $ | 137              |  | $ | 137  
|Term Loan                                         |  |                   | 331   |                   |   | 739              |  |   | 737  
|73/4percent Senior Subordinated Notes             |  |                   | 525   |                   |   | 525              |  |   | 525  
|7 percent Senior Subordinated Notes               |  |                   | 375   |                   |   | 375              |  |   | 375  
|61/2percent Senior Notes                          |  |                   | 1,000 |                   |   | 1,000            |  |   | 1,000
|17/8percent Convertible Senior Subordinated Notes |  |                   | 144   |                   |   | 144              |  |   | 144  
|Accounts Receivable Securitization Facility       |  |                   | 200   |                   |   |                 |  |   |     
|Other                                             |  |                   | 15    |                   |   | 16               |  |   | 12   
|                                                  |  |                   |       |                   |   |                  |  |   |      
|                                                  |  | $                 | 2,798 |                   | $ | 2,936            |  | $ | 2,930
|                                                  |  |                   |       |                   |   |                  |  |   |      

During the third quarter of 2006, we prepaid $400 of our outstanding term loan using $200 of
available cash and $200 borrowed under our accounts receivable securitization facility. Amounts repaid in respect of the term loan may not be reborrowed. Contemporaneous with this term loan prepayment, we terminated a portion of our interest rate
caps that were hedging our interest rate exposures on the term loan. In conjunction with the termination of a portion of these interest rate caps which are designated as cash flow hedges, we recognized a pre-tax gain of $3.2 which is classified in
Interest expense, net, in the accompanying unaudited condensed consolidated statements of operations. Additionally, in conjunction with this prepayment, we recorded a pre-tax charge of $2.6 related to the write-off of a portion of the unamortized
premium associated with these caps. Finally, an additional pre-tax charge of $2.6 was recorded related to the partial write-off of deferred financing costs associated with the term loan. These charges were also recorded in Interest expense, net, in
the accompanying unaudited condensed consolidated statements of operations. The Companys accounts receivable securitization facility is fully drawn as of September 30, 2006.

Subordinated Convertible Debentures

Subordinated Convertible Debentures consist of the following:



| |  |                   |     |                   |   |                  |  |   |    
| |  | ----------------- | --- | ----------------- | - | ---------------- |  | - | ---
| |  | September 30,2006 |     | September 30,2005 |   | December 31,2005
| |  | $                 | 159 |                   | $ | 222              |  | $ | 222

The subordinated convertible debentures included in our unaudited condensed consolidated balance
sheets reflect the obligation to our subsidiary trust that has issued 61/2% Convertible Quarterly Income
Preferred Securities (QUIPS). This subsidiary trust is not consolidated in our financial statements because we are not the primary beneficiary of the trust. During the third quarter of 2006, we announced the redemption of $63 of QUIPS.
The redemption price was 101.3%. In conjunction with the redemption, we retired $63 of our subordinated convertible debentures. This redemption was funded with the proceeds of stock option exercises received during 2006. In conjunction with this
transaction, during the third quarter of 2006, we recorded a pre-tax



11



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



charge of $3 related to the write-off of a portion of certain deferred financing costs. This charge is included in Interest expense, net, in the accompanying
unaudited condensed consolidated statements of operations. Additionally, we recorded a pre-tax charge of $0.8 related to the redemption premium. This charge is included in Other (income) expense, net, in the accompanying unaudited condensed
consolidated statements of operations. In October 2006, we announced the redemption, effective November 30, 2006, of an additional $12.7 of QUIPS.

6.    Legal and Regulatory Matters

SEC Non-Public Fact Finding Inquiry and Special Committee Review

As previously announced, on August 25, 2004, the Company 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 the Companys documents. The letter and the subpoena referred to an SEC investigation entitled In the Matter of United Rentals, Inc. The notice from the SEC states that the inquiry
does not mean that the SEC has concluded that the Company or anyone else has broken the law or that the SEC has a negative opinion of any person, entity or security. As previously announced, the inquiry appears to relate to a broad range of the
Companys accounting practices and is not confined to a specific period.

The Company has since received additional document subpoenas
from the SEC. As previously announced, in March 2005, the Companys 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 2005 Form 10-K.

The Company has
provided documents in response to the SEC subpoenas to the SEC or to the Special Committee, which has, in turn, provided documents to the SEC. The Company is cooperating fully with the SEC in complying with the subpoenas. The Company is also
responding to the SECs informal requests for information. The U.S. Attorneys office has also requested information from the Company about matters related to the SEC inquiry.The Company is cooperating fully with this office.

Shareholder Class Action Lawsuits and Derivative Litigation

As previously announced, in August 2004 the Company received notice from the SEC that it was conducting a non-public, fact-finding inquiry of the Company. As previously announced, following the Companys 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 the Companys securities from October 23, 2003 to August 30, 2004. The lawsuits initially named as the defendants the Company, its chairman, its vice chairman and chief executive officer, its
former president and chief financial officer, and its former corporate controller. These initial complaints alleged, among other things, that certain of the Companys 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 the Companys 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
such Act. The complaints sought unspecified compensatory damages, costs and expenses. On February 1, 2005, the Court entered an order



12



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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 entitled In re United Rentals, Inc. Securities Litigation. The parties agreed upon, and the Court subsequently approved, a schedule for the filing of a consolidated amended complaint
in this action and the briefing of any motions to dismiss directed to the operative complaint in the action. On June 5, 2006, lead plaintiff filed a consolidated amended complaint, which (a) adds allegations relating to, among other
things, the conclusions of the Special Committee and to other matters disclosed in the 2005 Form 10-K, (b) amends the purported class period to include purchasers of the Companys securities from February 28, 2001 to August 30,
2004 and (c) names as an additional defendant the Companys first chief financial officer. In September 2006, the Company and certain of the individual defendants moved to dismiss the consolidated amended complaint in this action. Briefing
with respect to these motions is in progress. The Company intends 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.

As previously announced, 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., names as defendants certain of the
Companys current and/or former directors and/or officers, and names the Company as a nominal defendant. The complaint asserts, 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 anticipated motions to dismiss in the purported shareholder class actions.

As previously announced, in November 2004 the Company 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 the Companys current and/or former directors and/or officers. Following
receipt of the letter, the Companys 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 the Companys 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 the Companys chairman and its vice chairman and 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 the Company with respect to fiscal years 2001, 2002 and
2003. The parties agreed upon a schedule for the filing of an amended complaint in this action, and the briefing of any motions to dismiss directed to the operative complaint in this action. On June 5, 2006, plaintiff filed an amended
complaint, which (a) adds allegations relating to, among other things, the conclusions of the Special Committee and to other matters disclosed in the 2005 Form 10-K, and (b) names as an additional defendant the Companys former
president and chief financial officer and asserts the same claims against him as it previously asserted and continues to assert against the Companys chairman and its vice chairman and chief executive officer. In



13



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



September 2006, the Company and certain of the individual defendants moved to dismiss the amended complaint in this action. Briefing with respect to these
motions is in progress.

As previously announced, 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, entitled Natalie Gordon v. Wayland R. Hicks, et al., names as defendants certain of the Companys current and/or former directors
and/or officers, and names 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 the Companys common
stock while in possession of material, non-public information, and (b) a claim against the Companys chairman, its vice chairman and chief executive officer, and its former president and chief financial officer for recovery of certain
incentive-based compensation under 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 the Company for all bonuses or other incentive-based or equity-based compensation
they received for the fiscal years 1999 through 2004. The parties agreed upon, and the Court approved, a schedule for the filing of an amended complaint in this action, and the briefing of any motions to dismiss directed to the operative complaint
in this action. On June 5, 2006, plaintiff filed an amended complaint, which (a) adds allegations relating to, among other things, the conclusions of the Special Committee and to other matters disclosed in the 2005 Form 10-K, and
(b) names as additional defendants certain other of the Companys current and/or former directors and/or officers. The amended complaint also asserts an additional claim against certain of the Companys current and/or former directors
for violation of Section 14(a) of the Exchange Act. In September 2006, the Company and certain of the individual defendants moved to dismiss the amended complaint in this action. Briefing with respect to these motions is in progress.

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, tax examinations 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 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.



14



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



7.    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 also includes the impact of other dilutive securities. The following table sets forth the computation of basic
and diluted earnings per share:



|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|--------------------------------------------------------------------------- |  | ------------------------------- | ----------- | ------------------------------ | - | ----------- |  | ---- | ----------- |  | - | -----------
|                                                                            |  | Three Months EndedSeptember 30, |             | Nine Months EndedSeptember 30,
|                                                                            |  | 2006                            |             | 2005                           |   | 2006        |  | 2005
|Numerator:                                                                  |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Net income                                                                  |  | $                               | 95          |                                | $ | 76          |  | $    | 171         |  | $ | 138        
|Plus:                                                                       |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Convertible debt interest                                                   |  |                                 |            |                                |   | 1           |  |      | 1           |  |   | 1          
|Subordinated convertible debentures interest                                |  |                                 | 2           |                                |   | 2           |  |      | 6           |  |   | 7          
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Income available to common stockholders                                     |  | $                               | 97          |                                | $ | 79          |  | $    | 178         |  | $ | 146        
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Denominator:                                                                |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Weighted-average common shares                                              |  |                                 | 80,598,276  |                                |   | 78,010,517  |  |      | 79,123,520  |  |   | 77,960,242 
|Series C preferred                                                          |  |                                 | 12,000,000  |                                |   | 12,000,000  |  |      | 12,000,000  |  |   | 12,000,000 
|Series D preferred                                                          |  |                                 | 5,000,000   |                                |   | 5,000,000   |  |      | 5,000,000   |  |   | 5,000,000  
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Denominator for basic earnings per shareweighted-average                   |  |                                 | 97,598,276  |                                |   | 95,010,517  |  |      | 96,123,520  |  |   | 94,960,242 
|Effect of dilutive securities:                                              |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Employee stock options and warrants                                         |  |                                 | 4,709,591   |                                |   | 3,974,510   |  |      | 6,257,446   |  |   | 4,128,840  
|Convertible shares                                                          |  |                                 | 6,460,671   |                                |   | 5,702,334   |  |      | 6,460,671   |  |   | 5,634,055  
|Subordinated convertible debentures                                         |  |                                 | 5,077,926   |                                |   | 5,077,926   |  |      | 5,077,926   |  |   | 5,077,926  
|Restricted stock units and phantom shares                                   |  |                                 | 135,232     |                                |   | 150,334     |  |      | 158,560     |  |   | 175,617    
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Denominator for diluted earnings per shareadjusted weighted-average shares |  |                                 | 113,981,696 |                                |   | 109,915,621 |  |      | 114,078,123 |  |   | 109,976,680
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Earnings per sharebasic:                                                   |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Income available to common stockholders                                     |  | $                               | 0.97        |                                | $ | 0.80        |  | $    | 1.77        |  | $ | 1.45       
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Earnings per sharediluted:                                                 |  |                                 |             |                                |   |             |  |      |             |  |   |            
|Income available to common stockholders                                     |  | $                               | 0.85        |                                | $ | 0.71        |  | $    | 1.56        |  | $ | 1.32       
|                                                                            |  |                                 |             |                                |   |             |  |      |             |  |   |            



15



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



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

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2006



|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|------------------------------------------ |  | ------ | ----- | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----------------- | - | ------ | - |  | - | -----
|                                           |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | ConsolidatedTotal
|ASSETS                                     |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Cash and cash equivalents                  |  | $      |      |      | $ | 20                    |  | $ | 69                        |   |  | $                     | 51   |   |                   | $ |       |   |  | $ | 140  
|Accounts receivable, net                   |  |        |      |      |   | 17                    |  |   | 49                        |   |  |                       | 549  |   |                   |   |       |   |  |   | 615  
|Intercompany receivable (payable)          |  |        |      |      |   | 396                   |  |   | 5                         |   |  |                       | (401 | ) |                   |   |       |   |  |   |     
|Inventory                                  |  |        |      |      |   | 69                    |  |   | 85                        |   |  |                       | 20   |   |                   |   |       |   |  |   | 174  
|Prepaid expenses and other assets          |  |        | 8     |      |   | 59                    |  |   | 55                        |   |  |                       | 1    |   |                   |   |       |   |  |   | 123  
|Rental equipment, net                      |  |        |      |      |   | 1,477                 |  |   | 958                       |   |  |                       | 253  |   |                   |   |       |   |  |   | 2,688
|Property and equipment, net                |  |        | 40    |      |   | 85                    |  |   | 224                       |   |  |                       | 29   |   |                   |   |       |   |  |   | 378  
|Investment in subsidiaries                 |  |        | 1,612 |      |   | 2,325                 |  |   |                          |   |  |                       |     |   |                   |   | (3,937 | ) |  |   |     
|Goodwill and other intangible assets, net  |  |        |      |      |   | 167                   |  |   | 1,063                     |   |  |                       | 140  |   |                   |   |       |   |  |   | 1,370
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|                                           |  | $      | 1,660 |      | $ | 4,615                 |  | $ | 2,508                     |   |  | $                     | 642  |   |                   | $ | (3,937 | ) |  | $ | 5,488
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Liabilities:                               |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Accounts payable                           |  | $      |      |      | $ | 68                    |  | $ | 166                       |   |  | $                     | 33   |   |                   | $ |       |   |  | $ | 267  
|Accrued expenses and other liabilities     |  |        |      |      |   | 240                   |  |   | 257                       |   |  |                       | 12   |   |                   |   | (86    | ) |  |   | 423  
|Debt                                       |  |        |      |      |   | 2,448                 |  |   | 7                         |   |  |                       | 343  |   |                   |   |       |   |  |   | 2,798
|Subordinated convertible debentures        |  |        | 159   |      |   |                      |  |   |                          |   |  |                       |     |   |                   |   |       |   |  |   | 159  
|Deferred taxes                             |  |        |      |      |   | 333                   |  |   | (32                       | ) |  |                       | 39   |   |                   |   |       |   |  |   | 340  
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities                          |  |        | 159   |      |   | 3,089                 |  |   | 398                       |   |  |                       | 427  |   |                   |   | (86    | ) |  |   | 3,987
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total stockholders equity                 |  |        | 1,501 |      |   | 1,526                 |  |   | 2,110                     |   |  |                       | 215  |   |                   |   | (3,851 | ) |  |   | 1,501
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities and stockholders equity |  | $      | 1,660 |      | $ | 4,615                 |  | $ | 2,508                     |   |  | $                     | 642  |   |                   | $ | (3,937 | ) |  | $ | 5,488
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      



16



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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2005



|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|------------------------------------------ |  | ------ | ----- | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----------------- | - | ------ | - |  | - | -----
|                                           |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | ConsolidatedTotal
|ASSETS                                     |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Cash and cash equivalents                  |  | $      |      |      | $ |                      |  | $ | 142                       |   |  | $                     | 9    |   |                   | $ |       |   |  | $ | 151  
|Accounts receivable, net                   |  |        |      |      |   | 38                    |  |   | 62                        |   |  |                       | 484  |   |                   |   |       |   |  |   | 584  
|Intercompany receivable (payable)          |  |        |      |      |   | 577                   |  |   | (32                       | ) |  |                       | (545 | ) |                   |   |       |   |  |   |     
|Inventory                                  |  |        |      |      |   | 76                    |  |   | 90                        |   |  |                       | 14   |   |                   |   |       |   |  |   | 180  
|Prepaid expenses and other assets          |  |        | 11    |      |   | 72                    |  |   | 73                        |   |  |                       | 2    |   |                   |   |       |   |  |   | 158  
|Rental equipment, net                      |  |        |      |      |   | 1,343                 |  |   | 863                       |   |  |                       | 237  |   |                   |   |       |   |  |   | 2,443
|Property and equipment, net                |  |        | 33    |      |   | 83                    |  |   | 201                       |   |  |                       | 21   |   |                   |   |       |   |  |   | 338  
|Investment in subsidiaries                 |  |        | 1,359 |      |   | 2,151                 |  |   |                          |   |  |                       |     |   |                   |   | (3,510 | ) |  |   |     
|Goodwill and other intangible assets, net  |  |        |      |      |   | 165                   |  |   | 1,021                     |   |  |                       | 148  |   |                   |   |       |   |  |   | 1,334
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|                                           |  | $      | 1,403 |      | $ | 4,505                 |  | $ | 2,420                     |   |  | $                     | 370  |   |                   | $ | (3,510 | ) |  | $ | 5,188
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Liabilities:                               |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Accounts payable                           |  | $      |      |      | $ | 43                    |  | $ | 180                       |   |  | $                     | 20   |   |                   | $ |       |   |  | $ | 243  
|Accrued expenses and other liabilities     |  |        |      |      |   | 136                   |  |   | 279                       |   |  |                       | 8    |   |                   |   | (56    | ) |  |   | 367  
|Debt                                       |  |        |      |      |   | 2,799                 |  |   |                          |   |  |                       | 137  |   |                   |   |       |   |  |   | 2,936
|Subordinated convertible debentures        |  |        | 222   |      |   |                      |  |   |                          |   |  |                       |     |   |                   |   |       |   |  |   | 222  
|Deferred taxes                             |  |        |      |      |   | 224                   |  |   | (15                       | ) |  |                       | 30   |   |                   |   |       |   |  |   | 239  
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities                          |  |        | 222   |      |   | 3,202                 |  |   | 444                       |   |  |                       | 195  |   |                   |   | (56    | ) |  |   | 4,007
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total stockholders equity                 |  |        | 1,181 |      |   | 1,303                 |  |   | 1,976                     |   |  |                       | 175  |   |                   |   | (3,454 | ) |  |   | 1,181
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities and stockholders equity |  | $      | 1,403 |      | $ | 4,505                 |  | $ | 2,420                     |   |  | $                     | 370  |   |                   | $ | (3,510 | ) |  | $ | 5,188
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      



17



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2005



|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|------------------------------------------ |  | ------ | ----- | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | ---- | - | ----------------- | - | ------ | - |  | - | -----
|                                           |  | Parent |       | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |      |   | ConsolidatedTotal
|ASSETS                                     |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Cash and cash equivalents                  |  | $      |      |      | $ | 200                   |  | $ | 105                       |   |  | $                     | 11   |   |                   | $ |       |   |  | $ | 316  
|Accounts receivable, net                   |  |        |      |      |   | 11                    |  |   | 47                        |   |  |                       | 514  |   |                   |   |       |   |  |   | 572  
|Intercompany receivable (payable)          |  |        |      |      |   | 471                   |  |   | 69                        |   |  |                       | (540 | ) |                   |   |       |   |  |   |     
|Inventory                                  |  |        |      |      |   | 73                    |  |   | 83                        |   |  |                       | 18   |   |                   |   |       |   |  |   | 174  
|Prepaid expenses and other assets          |  |        | 11    |      |   | 69                    |  |   | 73                        |   |  |                       | 1    |   |                   |   |       |   |  |   | 154  
|Rental equipment, net                      |  |        |      |      |   | 1,303                 |  |   | 828                       |   |  |                       | 220  |   |                   |   |       |   |  |   | 2,351
|Property and equipment, net                |  |        | 38    |      |   | 88                    |  |   | 201                       |   |  |                       | 19   |   |                   |   |       |   |  |   | 346  
|Investment in subsidiaries                 |  |        | 1,402 |      |   | 2,186                 |  |   |                          |   |  |                       |     |   |                   |   | (3,588 | ) |  |   |     
|Goodwill and other intangible assets, net  |  |        |      |      |   | 163                   |  |   | 1,052                     |   |  |                       | 146  |   |                   |   |       |   |  |   | 1,361
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|                                           |  | $      | 1,451 |      | $ | 4,564                 |  | $ | 2,458                     |   |  | $                     | 389  |   |                   | $ | (3,588 | ) |  | $ | 5,274
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Liabilities:                               |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Accounts payable                           |  | $      |      |      | $ | 45                    |  | $ | 144                       |   |  | $                     | 22   |   |                   | $ |       |   |  | $ | 211  
|Accrued expenses and other liabilities     |  |        |      |      |   | 150                   |  |   | 318                       |   |  |                       | 10   |   |                   |   | (58    | ) |  |   | 420  
|Debt                                       |  |        |      |      |   | 2,793                 |  |   |                          |   |  |                       | 137  |   |                   |   |       |   |  |   | 2,930
|Subordinated convertible debentures        |  |        | 222   |      |   |                      |  |   |                          |   |  |                       |     |   |                   |   |       |   |  |   | 222  
|Deferred taxes                             |  |        |      |      |   | 232                   |  |   | (7                        | ) |  |                       | 37   |   |                   |   |       |   |  |   | 262  
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities                          |  |        | 222   |      |   | 3,220                 |  |   | 455                       |   |  |                       | 206  |   |                   |   | (58    | ) |  |   | 4,045
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total stockholders equity                 |  |        | 1,229 |      |   | 1,344                 |  |   | 2,003                     |   |  |                       | 183  |   |                   |   | (3,530 | ) |  |   | 1,229
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      
|Total liabilities and stockholders equity |  | $      | 1,451 |      | $ | 4,564                 |  | $ | 2,458                     |   |  | $                     | 389  |   |                   | $ | (3,588 | ) |  | $ | 5,274
|                                           |  |        |       |      |   |                       |  |   |                           |   |  |                       |      |   |                   |   |        |   |  |   |      



18



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS



|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|----------------------------------------------------------- |  | --------------------------------------------- | --- | - | ---- | - | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----------------- | - | ---- | - |  | - | -----
|                                                            |  | For the Three Months Ended September 30, 2006
|                                                            |  | Parent                                        |     |   | URNA |   | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | ConsolidatedTotal
|Revenues:                                                   |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Equipment rentals                                           |  | $                                             |    |   |      | $ | 335                   |  | $ | 369                       |   |  | $                     | 69  |   |                   | $ |     |   |  | $ | 773  
|Sales of rental equipment                                   |  |                                               |    |   |      |   | 41                    |  |   | 36                        |   |  |                       | 10  |   |                   |   |     |   |  |   | 87   
|New equipment sales                                         |  |                                               |    |   |      |   | 28                    |  |   | 24                        |   |  |                       | 8   |   |                   |   |     |   |  |   | 60   
|Contractor supplies sales                                   |  |                                               |    |   |      |   | 40                    |  |   | 57                        |   |  |                       | 12  |   |                   |   |     |   |  |   | 109  
|Service and other revenues                                  |  |                                               |    |   |      |   | 22                    |  |   | 15                        |   |  |                       | 4   |   |                   |   |     |   |  |   | 41   
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Total revenues                                              |  |                                               |    |   |      |   | 466                   |  |   | 501                       |   |  |                       | 103 |   |                   |   |     |   |  |   | 1,070
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Cost of revenues:                                           |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Cost of equipment rentals, excluding depreciation           |  |                                               |    |   |      |   | 145                   |  |   | 177                       |   |  |                       | 32  |   |                   |   |     |   |  |   | 354  
|Depreciation of rental equipment                            |  |                                               |    |   |      |   | 54                    |  |   | 46                        |   |  |                       | 12  |   |                   |   |     |   |  |   | 112  
|Cost of rental equipment sales                              |  |                                               |    |   |      |   | 30                    |  |   | 24                        |   |  |                       | 6   |   |                   |   |     |   |  |   | 60   
|Cost of new equipment sales                                 |  |                                               |    |   |      |   | 22                    |  |   | 20                        |   |  |                       | 7   |   |                   |   |     |   |  |   | 49   
|Cost of contractor supplies sales                           |  |                                               |    |   |      |   | 32                    |  |   | 45                        |   |  |                       | 9   |   |                   |   |     |   |  |   | 86   
|Cost of service and other revenue                           |  |                                               |    |   |      |   | 10                    |  |   | 7                         |   |  |                       | 2   |   |                   |   |     |   |  |   | 19   
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Total cost of revenues                                      |  |                                               |    |   |      |   | 293                   |  |   | 319                       |   |  |                       | 68  |   |                   |   |     |   |  |   | 680  
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Gross profit                                                |  |                                               |    |   |      |   | 173                   |  |   | 182                       |   |  |                       | 35  |   |                   |   |     |   |  |   | 390  
|Selling, general and administrative expenses                |  |                                               |    |   |      |   | 62                    |  |   | 84                        |   |  |                       | 18  |   |                   |   |     |   |  |   | 164  
|Non-rental depreciation and amortization                    |  |                                               | 2   |   |      |   | 6                     |  |   | 3                         |   |  |                       | (1  | ) |                   |   |     |   |  |   | 10   
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Operating income (loss)                                     |  |                                               | (2  | ) |      |   | 105                   |  |   | 95                        |   |  |                       | 18  |   |                   |   |     |   |  |   | 216  
|Interest expense, net                                       |  |                                               | 3   |   |      |   | 56                    |  |   | (3                        | ) |  |                       | 2   |   |                   |   |     |   |  |   | 58   
|Interest expensesubordinated convertible debentures        |  |                                               | 4   |   |      |   |                      |  |   |                          |   |  |                       |    |   |                   |   |     |   |  |   | 4    
|Other (income) expense, net                                 |  |                                               | 1   |   |      |   | 4                     |  |   | 3                         |   |  |                       | (8  | ) |                   |   |     |   |  |   |     
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|Income (loss) before provision (benefit) for income taxes   |  |                                               | (10 | ) |      |   | 45                    |  |   | 95                        |   |  |                       | 24  |   |                   |   |     |   |  |   | 154  
|Provision (benefit) for income taxes                        |  |                                               | (4  | ) |      |   | 17                    |  |   | 37                        |   |  |                       | 9   |   |                   |   |     |   |  |   | 59   
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      
|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   
|                                                            |  |                                               |     |   |      |   |                       |  |   |                           |   |  |                       |     |   |                   |   |      |   |  |   |      



19



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS



|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|----------------------------------------------------------- |  | --------------------------------------------- | -- | - | ---- | - | --------------------- |  | ------------------------- | --- |  | --------------------- | -- | - | ----------------- | - | ---- | - |  | - | --- | -
|                                                            |  | For the Three Months Ended September 30, 2005 |   
|                                                            |  | Parent                                        |    |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |     |  | Other andEliminations |    |   | ConsolidatedTotal |  
|Revenues:                                                   |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Equipment rentals                                           |  | $                                             |   |   |      | $ | 322                   |  | $                         | 353 |  | $                     | 62 |   |                   | $ |     |   |  | $ | 737 |  
|Sales of rental equipment                                   |  |                                               |   |   |      |   | 27                    |  |                           | 27  |  |                       | 7  |   |                   |   |     |   |  |   | 61  |  
|New equipment sales                                         |  |                                               |   |   |      |   | 28                    |  |                           | 21  |  |                       | 6  |   |                   |   |     |   |  |   | 55  |  
|Contractor supplies sales                                   |  |                                               |   |   |      |   | 33                    |  |                           | 47  |  |                       | 9  |   |                   |   |     |   |  |   | 89  |  
|Service and other revenues                                  |  |                                               |   |   |      |   | 20                    |  |                           | 13  |  |                       | 4  |   |                   |   |     |   |  |   | 37  |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Total revenues                                              |  |                                               |   |   |      |   | 430                   |  |                           | 461 |  |                       | 88 |   |                   |   |     |   |  |   | 979 |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Cost of revenues:                                           |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Cost of equipment rentals, excluding depreciation           |  |                                               |   |   |      |   | 140                   |  |                           | 186 |  |                       | 28 |   |                   |   |     |   |  |   | 354 |  
|Depreciation of rental equipment                            |  |                                               |   |   |      |   | 51                    |  |                           | 41  |  |                       | 11 |   |                   |   |     |   |  |   | 103 |  
|Cost of rental equipment sales                              |  |                                               |   |   |      |   | 19                    |  |                           | 20  |  |                       | 4  |   |                   |   |     |   |  |   | 43  |  
|Cost of new equipment sales                                 |  |                                               |   |   |      |   | 23                    |  |                           | 17  |  |                       | 5  |   |                   |   |     |   |  |   | 45  |  
|Cost of contractor supplies sales                           |  |                                               |   |   |      |   | 32                    |  |                           | 30  |  |                       | 7  |   |                   |   |     |   |  |   | 69  |  
|Cost of service and other revenue                           |  |                                               |   |   |      |   | 11                    |  |                           | 7   |  |                       | 2  |   |                   |   |     |   |  |   | 20  |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Total cost of revenues                                      |  |                                               |   |   |      |   | 276                   |  |                           | 301 |  |                       | 57 |   |                   |   |     |   |  |   | 634 |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Gross profit                                                |  |                                               |   |   |      |   | 154                   |  |                           | 160 |  |                       | 31 |   |                   |   |     |   |  |   | 345 |  
|Selling, general and administrative expenses                |  |                                               |   |   |      |   | 59                    |  |                           | 86  |  |                       | 17 |   |                   |   |     |   |  |   | 162 |  
|Non-rental depreciation and amortization                    |  |                                               | 1  |   |      |   | 4                     |  |                           | 5   |  |                       |   |   |                   |   |     |   |  |   | 10  |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Operating income (loss)                                     |  |                                               | (1 | ) |      |   | 91                    |  |                           | 69  |  |                       | 14 |   |                   |   |     |   |  |   | 173 |  
|Interest expense, net                                       |  |                                               |   |   |      |   | 43                    |  |                           | 2   |  |                       | 3  |   |                   |   |     |   |  |   | 48  |  
|Interest expensesubordinated convertible debentures        |  |                                               | 4  |   |      |   |                      |  |                           |    |  |                       |   |   |                   |   |     |   |  |   | 4   |  
|Other (income) expense, net                                 |  |                                               |   |   |      |   | 2                     |  |                           |    |  |                       | (7 | ) |                   |   |     |   |  |   | (5  | )
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Income (loss) before provision (benefit) for income taxes   |  |                                               | (5 | ) |      |   | 46                    |  |                           | 67  |  |                       | 18 |   |                   |   |     |   |  |   | 126 |  
|Provision (benefit) for income taxes                        |  |                                               | (2 | ) |      |   | 19                    |  |                           | 26  |  |                       | 7  |   |                   |   |     |   |  |   | 50  |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Income (loss) before equity in net earnings of subsidiaries |  |                                               | (3 | ) |      |   | 27                    |  |                           | 41  |  |                       | 11 |   |                   |   |     |   |  |   | 76  |  
|Equity in net earnings of subsidiaries                      |  |                                               | 79 |   |      |   | 52                    |  |                           |    |  |                       |   |   |                   |   | (131 | ) |  |   |    |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  
|Net income (loss)                                           |  | $                                             | 76 |   |      | $ | 79                    |  | $                         | 41  |  | $                     | 11 |   |                   | $ | (131 | ) |  | $ | 76  |  
|                                                            |  |                                               |    |   |      |   |                       |  |                           |     |  |                       |    |   |                   |   |      |   |  |   |     |  



20



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS



|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|----------------------------------------------------------- |  | -------------------------------------------- | --- | - | ---- | - | --------------------- |  | ------------------------- | ----- |  | --------------------- | --- | - | ----------------- | - | ---- | - |  | - | -----
|                                                            |  | For the Nine Months Ended September 30, 2006
|                                                            |  | Parent                                       |     |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |       |  | Other andEliminations |     |   | ConsolidatedTotal
|Revenues:                                                   |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Equipment rentals                                           |  | $                                            |    |   |      | $ | 920                   |  | $                         | 962   |  | $                     | 179 |   |                   | $ |     |   |  | $ | 2,061
|Sales of rental equipment                                   |  |                                              |    |   |      |   | 123                   |  |                           | 101   |  |                       | 26  |   |                   |   |     |   |  |   | 250  
|New equipment sales                                         |  |                                              |    |   |      |   | 82                    |  |                           | 68    |  |                       | 24  |   |                   |   |     |   |  |   | 174  
|Contractor supplies sales                                   |  |                                              |    |   |      |   | 116                   |  |                           | 157   |  |                       | 33  |   |                   |   |     |   |  |   | 306  
|Service and other revenues                                  |  |                                              |    |   |      |   | 65                    |  |                           | 41    |  |                       | 13  |   |                   |   |     |   |  |   | 119  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Total revenues                                              |  |                                              |    |   |      |   | 1,306                 |  |                           | 1,329 |  |                       | 275 |   |                   |   |     |   |  |   | 2,910
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Cost of revenues:                                           |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Cost of equipment rentals, excluding depreciation           |  |                                              |    |   |      |   | 417                   |  |                           | 491   |  |                       | 92  |   |                   |   |     |   |  |   | 1,000
|Depreciation of rental equipment                            |  |                                              |    |   |      |   | 154                   |  |                           | 132   |  |                       | 33  |   |                   |   |     |   |  |   | 319  
|Cost of rental equipment sales                              |  |                                              |    |   |      |   | 89                    |  |                           | 67    |  |                       | 17  |   |                   |   |     |   |  |   | 173  
|Cost of new equipment sales                                 |  |                                              |    |   |      |   | 66                    |  |                           | 57    |  |                       | 20  |   |                   |   |     |   |  |   | 143  
|Cost of contractor supplies sales                           |  |                                              |    |   |      |   | 99                    |  |                           | 120   |  |                       | 27  |   |                   |   |     |   |  |   | 246  
|Cost of service and other revenue                           |  |                                              |    |   |      |   | 31                    |  |                           | 19    |  |                       | 7   |   |                   |   |     |   |  |   | 57   
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Total cost of revenues                                      |  |                                              |    |   |      |   | 856                   |  |                           | 886   |  |                       | 196 |   |                   |   |     |   |  |   | 1,938
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Gross profit                                                |  |                                              |    |   |      |   | 450                   |  |                           | 443   |  |                       | 79  |   |                   |   |     |   |  |   | 972  
|Selling, general and administrative expenses                |  |                                              |    |   |      |   | 185                   |  |                           | 242   |  |                       | 53  |   |                   |   |     |   |  |   | 480  
|Non-rental depreciation and amortization                    |  |                                              | 7   |   |      |   | 16                    |  |                           | 12    |  |                       | 3   |   |                   |   |     |   |  |   | 38   
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Operating income (loss)                                     |  |                                              | (7  | ) |      |   | 249                   |  |                           | 189   |  |                       | 23  |   |                   |   |     |   |  |   | 454  
|Interest expense, net                                       |  |                                              | 3   |   |      |   | 150                   |  |                           |      |  |                       | 7   |   |                   |   |     |   |  |   | 160  
|Interest expensesubordinated convertible debentures        |  |                                              | 11  |   |      |   |                      |  |                           |      |  |                       |    |   |                   |   |     |   |  |   | 11   
|Other (income) expense, net                                 |  |                                              | 1   |   |      |   | 11                    |  |                           | 10    |  |                       | (22 | ) |                   |   |     |   |  |   |     
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|Income (loss) before provision (benefit) for income taxes   |  |                                              | (22 | ) |      |   | 88                    |  |                           | 179   |  |                       | 38  |   |                   |   |     |   |  |   | 283  
|Provision (benefit) for income taxes                        |  |                                              | (9  | ) |      |   | 35                    |  |                           | 71    |  |                       | 15  |   |                   |   |     |   |  |   | 112  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      
|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  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |      



21



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS



|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|----------------------------------------------------------- |  | -------------------------------------------- | --- | - | ---- | - | --------------------- |  | ------------------------- | ----- |  | --------------------- | --- | - | ----------------- | - | ---- | - |  | - | ----- | -
|                                                            |  | For the Nine Months Ended September 30, 2005 |    
|                                                            |  | Parent                                       |     |   | URNA |   | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |       |  | Other andEliminations |     |   | ConsolidatedTotal |  
|Revenues:                                                   |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Equipment rentals                                           |  | $                                            |    |   |      | $ | 844                   |  | $                         | 879   |  | $                     | 154 |   |                   | $ |     |   |  | $ | 1,877 |  
|Sales of rental equipment                                   |  |                                              |    |   |      |   | 106                   |  |                           | 95    |  |                       | 27  |   |                   |   |     |   |  |   | 228   |  
|New equipment sales                                         |  |                                              |    |   |      |   | 77                    |  |                           | 57    |  |                       | 17  |   |                   |   |     |   |  |   | 151   |  
|Contractor supplies sales                                   |  |                                              |    |   |      |   | 89                    |  |                           | 124   |  |                       | 25  |   |                   |   |     |   |  |   | 238   |  
|Service and other revenues                                  |  |                                              |    |   |      |   | 58                    |  |                           | 35    |  |                       | 11  |   |                   |   |     |   |  |   | 104   |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Total revenues                                              |  |                                              |    |   |      |   | 1,174                 |  |                           | 1,190 |  |                       | 234 |   |                   |   |     |   |  |   | 2,598 |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Cost of revenues:                                           |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Cost of equipment rentals, excluding depreciation           |  |                                              |    |   |      |   | 384                   |  |                           | 495   |  |                       | 76  |   |                   |   |     |   |  |   | 955   |  
|Depreciation of rental equipment                            |  |                                              |    |   |      |   | 147                   |  |                           | 124   |  |                       | 32  |   |                   |   |     |   |  |   | 303   |  
|Cost of rental equipment sales                              |  |                                              |    |   |      |   | 77                    |  |                           | 69    |  |                       | 19  |   |                   |   |     |   |  |   | 165   |  
|Cost of new equipment sales                                 |  |                                              |    |   |      |   | 62                    |  |                           | 48    |  |                       | 14  |   |                   |   |     |   |  |   | 124   |  
|Cost of contractor supplies sales                           |  |                                              |    |   |      |   | 75                    |  |                           | 87    |  |                       | 19  |   |                   |   |     |   |  |   | 181   |  
|Cost of service and other revenue                           |  |                                              |    |   |      |   | 28                    |  |                           | 18    |  |                       | 6   |   |                   |   |     |   |  |   | 52    |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Total cost of revenues                                      |  |                                              |    |   |      |   | 773                   |  |                           | 841   |  |                       | 166 |   |                   |   |     |   |  |   | 1,780 |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Gross profit                                                |  |                                              |    |   |      |   | 401                   |  |                           | 349   |  |                       | 68  |   |                   |   |     |   |  |   | 818   |  
|Selling, general and administrative expenses                |  |                                              |    |   |      |   | 170                   |  |                           | 202   |  |                       | 47  |   |                   |   |     |   |  |   | 419   |  
|Non-rental depreciation and amortization                    |  |                                              | 4   |   |      |   | 10                    |  |                           | 12    |  |                       | 2   |   |                   |   |     |   |  |   | 28    |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Operating income (loss)                                     |  |                                              | (4  | ) |      |   | 221                   |  |                           | 135   |  |                       | 19  |   |                   |   |     |   |  |   | 371   |  
|Interest expense, net                                       |  |                                              |    |   |      |   | 125                   |  |                           | 2     |  |                       | 7   |   |                   |   |     |   |  |   | 134   |  
|Interest expensesubordinated convertible debentures        |  |                                              | 12  |   |      |   |                      |  |                           |      |  |                       |    |   |                   |   |     |   |  |   | 12    |  
|Other (income) expense, net                                 |  |                                              |    |   |      |   | 9                     |  |                           | 7     |  |                       | (18 | ) |                   |   |     |   |  |   | (2    | )
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Income (loss) before provision (benefit) for income taxes   |  |                                              | (16 | ) |      |   | 87                    |  |                           | 126   |  |                       | 30  |   |                   |   |     |   |  |   | 227   |  
|Provision (benefit) for income taxes                        |  |                                              | (6  | ) |      |   | 34                    |  |                           | 50    |  |                       | 11  |   |                   |   |     |   |  |   | 89    |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Income (loss) before equity in net earnings of subsidiaries |  |                                              | (10 | ) |      |   | 53                    |  |                           | 76    |  |                       | 19  |   |                   |   |     |   |  |   | 138   |  
|Equity in net earnings of subsidiaries                      |  |                                              | 148 |   |      |   | 95                    |  |                           |      |  |                       |    |   |                   |   | (243 | ) |  |   |      |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  
|Net income (loss)                                           |  | $                                            | 138 |   |      | $ | 148                   |  | $                         | 76    |  | $                     | 19  |   |                   | $ | (243 | ) |  | $ | 138   |  
|                                                            |  |                                              |     |   |      |   |                       |  |                           |       |  |                       |     |   |                   |   |      |   |  |   |       |  



22



---

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

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



CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months Ended September 30, 2006



|                                                    |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |     |   |  |   |      |  
|--------------------------------------------------- |  | ------ | --- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----------------- | - | --- | - |  | - | ---- | -
|                                                    |  | Parent |     |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | ConsolidatedTotal |  
|Net cash provided by (used in) operating activities |  | $      | (1  | ) |      | $ | 496  |                       |  | $ | 210                       |   |  | $                     | (99 | ) |                   | $ |    |   |  | $ | 606  |  
|Net cash used in investing activities               |  |        | (74 | ) |      |   | (309 | )                     |  |   | (246                      | ) |  |                       | (61 | ) |                   |   | 64  |   |  |   | (626 | )
|Net cash provided by (used in) financing activities |  |        | 75  |   |      |   | (367 | )                     |  |   |                          |   |  |                       | 200 |   |                   |   | (64 | ) |  |   | (156 | )
|                                                    |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |     |   |  |   |      |  
|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  |  
|                                                    |  |        |     |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |     |   |  |   |      |  

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months Ended September 30, 2005



|                                                                     |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |    |   |  |   |      |  
|-------------------------------------------------------------------- |  | ------ | -- | - | ---- | - | ---- | --------------------- |  | - | ------------------------- | - |  | --------------------- | --- | - | ----------------- | - | -- | - |  | - | ---- | -
|                                                                     |  | Parent |    |   | URNA |   |      | GuarantorSubsidiaries |  |   | Non-GuarantorSubsidiaries |   |  | Other andEliminations |     |   | ConsolidatedTotal |  
|Net cash provided by (used in) operating activities                  |  | $      |   |   |      | $ | 71   |                       |  | $ | 316                       |   |  | $                     | 27  |   |                   | $ |   |   |  | $ | 414  |  
|Net cash used in investing activities                                |  |        | (9 | ) |      |   | (245 | )                     |  |   | (207                      | ) |  |                       | (41 | ) |                   |   | 2  |   |  |   | (500 | )
|Net cash provided by (used in) financing activities                  |  |        | 9  |   |      |   | (73  | )                     |  |   | (1                        | ) |  |                       |    |   |                   |   | (2 | ) |  |   | (67  | )
|Effect of foreign exchange rate changes on cash and cash equivalents |  |        |   |   |      |   |     |                       |  |   |                          |   |  |                       | 1   |   |                   |   |   |   |  |   | 1    |  
|                                                                     |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |    |   |  |   |      |  
|Increase (decrease) in cash and cash equivalents                     |  |        |   |   |      |   | (247 | )                     |  |   | 108                       |   |  |                       | (13 | ) |                   |   |   |   |  |   | (152 | )
|Cash and cash equivalents at beginning of period                     |  |        |   |   |      |   | 247  |                       |  |   | 34                        |   |  |                       | 22  |   |                   |   |   |   |  |   | 303  |  
|                                                                     |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |    |   |  |   |      |  
|Cash and cash equivalents at end of period                           |  | $      |   |   |      | $ |     |                       |  | $ | 142                       |   |  | $                     | 9   |   |                   | $ |   |   |  | $ | 151  |  
|                                                                     |  |        |    |   |      |   |      |                       |  |   |                           |   |  |                       |     |   |                   |   |    |   |  |   |      |  

9.    Subsequent Event

In October 2006, we amended our existing accounts receivable securitization facility. The amended facility provides for generally lower borrowing costs
and the facility size has been increased from $200 to $300. Additionally, the maturity date has been extended from May 2009 to October 2011. Borrowings under the amended facility will continue to be reflected as debt on our consolidated balance
sheets.



23



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

Executive Overview

We are the largest equipment rental company in the world, with an integrated network of more than 760 rental locations in the United States, Canada and Mexico. The equipment rental industry is highly fragmented and diverse and 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 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, traffic control equipment, 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 more
than 70 percent of our total revenues and we expect this to continue.

In August 2004, we received notice from the SEC that it was
conducting a non-public, fact-finding inquiry of the Company. The SEC inquiry appears to relate to a broad range of the Companys accounting practices and is not confined to a specific period. As previously announced, in March 2005, our board
of directors formed a 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, including the restatement of previously issued consolidated financial statements for 2003 and 2002, are discussed in our 2005 Form 10-K. The SEC inquiry is ongoing and we are
continuing to cooperate fully with the SEC. The U.S. Attorneys office has also requested information from the Company about matters related to the SEC inquiry. The Company is cooperating fully with this office.

As discussed in note 6 to our unaudited condensed consolidated financial statements, in addition to the SEC inquiry 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 matters to date, any liabilities resulting from an adverse judgment or settlement of these matters may be
material to our results of operations and cash flows during the period incurred. Other costs associated with the SEC inquiry and the class action and derivative suits, including reimbursement of attorneys fees incurred by indemnified officers
and directors, are expensed as incurred.

As discussed in note 1 to our unaudited condensed consolidated financial statements, certain
reclassifications have been made to 2005 financial information to conform to the 2006 presentation. These reclassifications had no impact on Income before provision for income taxes, Net income, Earnings per share or cash flows.

Financial Overview

Net income for the three and nine
months ended September 30, 2006 and 2005 was as follows:



|           |  |                    |     |                   |   |    
|---------- |  | ------------------ | --- | ----------------- | - | ---
|           |  | Three Months Ended
|           |  | September 30,2006  |     | September 30,2005
|Net income |  | $                  | 95  |                   | $ | 76 
|           | 
|           |  | Nine Months Ended 
|           |  | September 30,2006  |     | September 30,2005
|Net income |  | $                  | 171 |                   | $ | 138



24



---

Net income for the three and nine months ended September 30, 2006 includes refinancing charges of
$3.6 ($5.8 pre-tax). The refinancing charges, which are discussed further in note 5 to our unaudited condensed consolidated financial statements, relate to the $400 prepayment of our term loan and the retirement of $63 of subordinated convertible
debentures. The refinancing charges of $5.8 pre-tax include a net charge of $5 pre-tax recorded in Interest expense, net, as well as a $0.8 charge recorded in Other (income) expense, net. The net charge of $5 pre-tax includes $8.2 of non-cash
charges related to the write-offs of unamortized deferred financing costs and a portion of the unamortized premium on our interest rate caps, partially offset by a $3.2 gain recognized in conjunction with the partial termination of these interest
rate caps. The $0.8 charge relates to the premium paid in conjunction with the retirement of $63 of subordinated convertible debentures.

Results of
Operations

As discussed in note 2 to our unaudited condensed consolidated financial statements included in this Report, our reportable
segments are general rentals, trench safety, pump and power and traffic control. 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. The traffic control segment includes the rental of equipment used in the management of traffic-related services and activities. The traffic control
segments customers include construction companies involved in infrastructure projects and municipalities. The traffic control segment operates in the United States. All three reporting segments generate revenues from equipment rentals as well
as the sales of new and used equipment and related contractor supplies. Our external segment reporting is aligned 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.



25



---

Revenues by segment were as follows:



|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|------------------------------------- |  | -------------- | ----- | ---------------------------- | - | --------------- |  | ----- | --- |  | - | -----
|                                      |  | Generalrentals |       | Trench safety,pump and power |   | Traffic control |  | Total
|Three months ended September 30, 2006 |  |                |       |                              |   |                 |  |       |     |  |   |      
|Equipment rentals                     |  | $              | 645   |                              | $ | 48              |  | $     | 80  |  | $ | 773  
|Sales of rental equipment             |  |                | 83    |                              |   | 4               |  |       |    |  |   | 87   
|New equipment sales                   |  |                | 54    |                              |   | 6               |  |       |    |  |   | 60   
|Contractor supplies sales             |  |                | 98    |                              |   | 4               |  |       | 7   |  |   | 109  
|Service and other revenues            |  |                | 41    |                              |   |                |  |       |    |  |   | 41   
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|Total revenues                        |  | $              | 921   |                              | $ | 62              |  | $     | 87  |  | $ | 1,070
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|                                      |  |                |       |                             
|Three months ended September 30, 2005 |  |                |       |                              |   |                 |  |       |     |  |   |      
|Equipment rentals                     |  | $              | 620   |                              | $ | 42              |  | $     | 75  |  | $ | 737  
|Sales of rental equipment             |  |                | 57    |                              |   | 3               |  |       | 1   |  |   | 61   
|New equipment sales                   |  |                | 51    |                              |   | 3               |  |       | 1   |  |   | 55   
|Contractor supplies sales             |  |                | 80    |                              |   | 3               |  |       | 6   |  |   | 89   
|Service and other revenues            |  |                | 36    |                              |   | 1               |  |       |    |  |   | 37   
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|Total revenues                        |  | $              | 844   |                              | $ | 52              |  | $     | 83  |  | $ | 979  
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|                                      |  |                |       |                             
|Nine months ended September 30, 2006  |  |                |       |                              |   |                 |  |       |     |  |   |      
|Equipment rentals                     |  | $              | 1,745 |                              | $ | 129             |  | $     | 187 |  | $ | 2,061
|Sales of rental equipment             |  |                | 238   |                              |   | 10              |  |       | 2   |  |   | 250  
|New equipment sales                   |  |                | 159   |                              |   | 13              |  |       | 2   |  |   | 174  
|Contractor supplies sales             |  |                | 276   |                              |   | 12              |  |       | 18  |  |   | 306  
|Service and other revenues            |  |                | 117   |                              |   | 2               |  |       |    |  |   | 119  
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|Total revenues                        |  | $              | 2,535 |                              | $ | 166             |  | $     | 209 |  | $ | 2,910
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|                                      |  |                |       |                             
|Nine months ended September 30, 2005  |  |                |       |                              |   |                 |  |       |     |  |   |      
|Equipment rentals                     |  | $              | 1,599 |                              | $ | 100             |  | $     | 178 |  | $ | 1,877
|Sales of rental equipment             |  |                | 215   |                              |   | 9               |  |       | 4   |  |   | 228  
|New equipment sales                   |  |                | 139   |                              |   | 10              |  |       | 2   |  |   | 151  
|Contractor supplies sales             |  |                | 213   |                              |   | 9               |  |       | 16  |  |   | 238  
|Service and other revenues            |  |                | 102   |                              |   | 2               |  |       |    |  |   | 104  
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      
|Total revenues                        |  | $              | 2,268 |                              | $ | 130             |  | $     | 200 |  | $ | 2,598
|                                      |  |                |       |                              |   |                 |  |       |     |  |   |      

Equipment rentals.

Three months ended September 30, 2006 and 2005. 2006 equipment rentals of $773 increased $36, or 5 percent, reflecting a 5.1 percent increase
in rental rates and a 3.5 percent increase in same-store rental revenues, partially offset by a 0.2 percentage point decline in our dollar equipment utilization rate from 72.4 percent for the three months ended September 30, 2005 to 72.2
percent for the three months ended September 30, 2006. The decrease in our dollar equipment utilization rate reflects a change in the mix of our equipment on rent. On a segment basis, equipment rentals represented approximately 70 percent, 77
percent and 92 percent of total revenues for general rentals, trench safety, pump and power and traffic control, respectively. General rentals equipment rentals increased $25, or 4 percent, reflecting increased rental rates and a 3.3 percent
increase in same-store rental revenues. Trench safety, pump and power equipment rentals increased $6, or 14 percent, reflecting rental revenue growth from new branches (cold starts) as well as acquisitions. Traffic control equipment
rentals increased $5, or 7 percent.



26



---

Nine months ended September 30, 2006 and 2005. 2006 equipment rentals of $2,061 increased
$184, or 10 percent, reflecting a 5.6 percent increase in rental rates and an 8.4 percent increase in same-store rental revenues. The increase also reflects an increase in our dollar equipment utilization rate from 63.5 percent for the nine months
ended September 30, 2005 to 66.1 percent for the nine months ended September 30, 2006. On a segment basis, equipment rentals represented approximately 69 percent, 78 percent and 89 percent of total revenues for general rentals, trench
safety, pump and power, and traffic control, respectively, for the nine months ended September 30, 2006. General rentals equipment rentals increased $146, or 9 percent, reflecting increased rental rates and an 8.3 percent increase in same-store
rental revenues. Trench safety, pump and power equipment rentals increased $29, or 29 percent. Traffic control equipment rentals increased $9, or 5 percent.

Sales of rental equipment. Sales of rental equipment represents revenues associated with selling used equipment. For the three and nine months ended September 30, 2006, sales of rental
equipment represented approximately 8 percent of our total revenues and our general rentals segment accounted for approximately 95 percent of these sales. Sales of rental equipment for trench safety, pump and power and traffic control were
insignificant for all periods. The increase in sales of rental equipment for the three and nine months ended September 30, 2006 primarily relates to improved pricing and the mix of equipment sold.

New equipment sales. For the three and nine months ended September 2006 and 2005, sales of new equipment represented approximately 6
percent of our total revenues. Our general rentals segment accounted for between 90 and 93 percent of these sales. Sales of new equipment for trench safety, pump and power and traffic control were insignificant for all periods. The increase in sales
of new equipment for the three and nine months ended September 30, 2006 primarily relates to the mix of equipment sold.

Contractor supplies sales. Contractor supplies sales represents our revenues associated with selling a variety of contractor supplies including construction consumables, tools, small equipment and safety supplies.
Consistent with sales of rental and used equipment, general rentals accounts for substantially all of our contractor supplies sales. For the three and nine months ended September 30, 2006 and 2005, general rentals accounted for approximately 90
percent of total contractor supplies sales. The increase in contractor supplies sales for the three and nine months ended September 30, 2006 primarily relates to an increase in the volume of supplies sold.

Service and other revenues. Service and other revenues 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. The increase in service and other revenue for the three and nine
months ended September 30, 2006 primarily relates to increased service and parts sales.



27



---

Segment Operating Profit.

Segment operating profit and operating margin were as follows:



|                                      |  |                |     |   |                              |   |    |                 |  |   |       |   |  |   |     |  
|------------------------------------- |  | -------------- | --- | - | ---------------------------- | - | -- | --------------- |  | - | ----- | - |  | - | --- | -
|                                      |  | Generalrentals |     |   | Trench safety,pump and power |   |    | Traffic control |  |   | Total |  
|Three months ended September 30, 2006 |  |                |     |   |                              |   |    |                 |  |   |       |   |  |   |     |  
|Operating Profit                      |  | $              | 190 |   |                              | $ | 18 |                 |  | $ | 8     |   |  | $ | 216 |  
|Operating Margin                      |  |                | 21  | % |                              |   | 29 | %               |  |   | 9     | % |  |   | 20  | %
|Three months ended September 30, 2005 |  |                |     |   |                              |   |    |                 |  |   |       |   |  |   |     |  
|Operating Profit (Loss)               |  | $              | 156 |   |                              | $ | 18 |                 |  | $ | (1    | ) |  | $ | 173 |  
|Operating Margin                      |  |                | 18  | % |                              |   | 35 | %               |  |   | -1    | % |  |   | 18  | %
|Nine months ended September 30, 2006  |  |                |     |   |                              |   |    |                 |  |   |       |   |  |   |     |  
|Operating Profit (Loss)               |  | $              | 414 |   |                              | $ | 44 |                 |  | $ | (4    | ) |  | $ | 454 |  
|Operating Margin                      |  |                | 16  | % |                              |   | 27 | %               |  |   | -2    | % |  |   | 16  | %
|Nine months ended September 30, 2005  |  |                |     |   |                              |   |    |                 |  |   |       |   |  |   |     |  
|Operating Profit (Loss)               |  | $              | 350 |   |                              | $ | 35 |                 |  | $ | (14   | ) |  | $ | 371 |  
|Operating Margin                      |  |                | 15  | % |                              |   | 27 | %               |  |   | -7    | % |  |   | 14  | %

General rentals. For the three months ended September 30, 2006, operating
margin increased by 3 percentage points as compared to the same period in 2005 primarily reflecting higher rental rates on a larger fleet.

For the nine months ended September 30, 2006, operating margin increased by 1 percentage point as compared to the same period in 2005 as the benefits of higher rental rates were partially offset by increased costs for labor and
benefits associated with normal inflationary increases and increased professional costs related to regulatory issues and related matters.

Trench safety, pump and power. For the three months ended September 30, 2006, operating profit remained flat as compared to the same period in 2005. Our operating margin declined by 6 percent as the impact of increased
costs associated with the opening of new stores (cold starts) and revenue mix offset a 19 percent increase in revenues.

For
the nine months ended September 30, 2006, operating profit increased by $9 as compared to the same period in 2005. Operating profit growth reflects an approximate 28 percent increase in revenue.

Traffic control. Traffic control operating profit improved by $9 for the three months ended September 30, 2006 as compared to the same
period in 2005 reflecting the benefit of an approximate 5 percent increase in revenues as well as cost containment initiatives.

For the
nine months ended September 30, 2006, the operating loss decreased by $10 as compared to the same period in 2005 reflecting the benefit of an approximate 5 percent increase in revenues as well as cost containment initiatives.

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



|                           |  |                    |   |  |                   |  
|-------------------------- |  | ------------------ | - |  | ----------------- | -
|                           |  | Three Months Ended |  
|                           |  | September 30,2006  |   |  | September 30,2005 |  
|Total gross margin         |  | 36.4               | % |  | 35.2              | %
|Equipment rentals          |  | 39.7               | % |  | 38.0              | %
|Sales of rental equipment  |  | 31.0               | % |  | 29.5              | %
|New equipment sales        |  | 18.3               | % |  | 18.2              | %
|Contractor supplies sales  |  | 21.1               | % |  | 22.5              | %
|Service and other revenues |  | 53.7               | % |  | 45.9              | %



28



---

|                           |  |                   |   |  |                   |  
|-------------------------- |  | ----------------- | - |  | ----------------- | -
|                           | 
|                           |  | Nine Months Ended |  
|                           |  | September 30,2006 |   |  | September 30,2005 |  
|Total gross margin         |  | 33.4              | % |  | 31.5              | %
|Equipment rentals          |  | 36.0              | % |  | 33.0              | %
|Sales of rental equipment  |  | 30.8              | % |  | 27.6              | %
|New equipment sales        |  | 17.8              | % |  | 17.9              | %
|Contractor supplies sales  |  | 19.6              | % |  | 23.9              | %
|Service and other revenues |  | 52.1              | % |  | 50.0              | %

For the three months ended September 30, 2006, total gross margin improved 1.2 percentage
points as compared to the same period in 2005. Equipment rentals gross margin improved 1.7 percentage points primarily due to a year-over-year increase in rental rates of 5.1 percent. During the second quarter of 2006, we determined that we had been
depreciating certain vehicles on capital lease over a period which exceeded the related contractual lease terms. As a result, our Depreciation of rental equipment for the nine months ended September 30, 2006 includes a pre- and after-tax charge
of $1 to correct depreciation expense recorded since the fourth quarter of 2002. Depreciation of rental equipment is a component of Equipment rentals gross margin. This correction does not affect historical or future cash flows and its effect on our
current and prior years Net income, cash flows from operations, and Stockholders equity is not material. The reduction in the gross margin on contractor supplies sales of 1.4 percentage points resulted primarily from increased costs
related to our distribution centers that opened during 2005. The fluctuations in gross margin on sales of rental equipment reflect improved pricing and a change in the mix of equipment sold.

For the nine months ended September 30, 2006, total gross margin improved by 1.9 percentage points as compared to the same period in 2005. Equipment
rentals gross margin improved 3.0 percentage points primarily due to a year-over-year increase in rental rates of 5.6 percent and strong revenue growth in trench safety, pump and power. The reduction in the gross margin on contractor supplies sales
of 4.3 percentage points resulted primarily from increased costs related to our distribution centers that opened during 2005 as well as increased provisions for excess and slow moving inventory. The increase in gross margin on the sales of rental
equipment resulted from improved pricing and a change in the mix of equipment sold.

Selling, general and administrative expenses
(SG&A). SG&A expense information for the three and nine months ended September 30, 2006 and 2005 was as follows:



|                                |  |                    |      |   |                   |   |      |  
|------------------------------- |  | ------------------ | ---- | - | ----------------- | - | ---- | -
|                                |  | Three Months Ended |     
|                                |  | September 30,2006  |      |   | September 30,2005 |  
|Total SG&A expenses             |  | $                  | 164  |   |                   | $ | 162  |  
|SG&A as a percentage of revenue |  |                    | 15.3 | % |                   |   | 16.5 | %
|                                | 
|                                |  | Nine Months Ended  |     
|                                |  | September 30,2006  |      |   | September 30,2005 |  
|Total SG&A expenses             |  | $                  | 480  |   |                   | $ | 419  |  
|SG&A as a percentage of revenue |  |                    | 16.5 | % |                   |   | 16.1 | %

SG&A expense primarily includes sales force compensation, bad debt expense, advertising and
marketing expenses, third party professional fees, management salaries and clerical and administrative overhead.

For the three months
ended September 30, 2006, SG&A expense was essentially flat and, as a percentage of revenue, decreased by 1.2 percent points. This year-over-year performance reflects normal inflationary increases and higher selling and administrative costs
related to growth in the business, offset by a year-over-year reduction of $6 in the level of professional fees associated with regulatory issues and related matters as well as a year-over-year reduction of $5 in our bad debt provisions.



29



---

For the nine months ended September 30, 2006, SG&A expense increased $61. In addition to
normal inflationary increases as well as higher selling and administrative costs related to growth in the business, the year-over-year growth in SG&A expense reflects increased professional costs related to regulatory issues and related matters
of $5 as well as professional fees for business improvement initiatives.

Non-rental depreciation and amortizationfor the
three and nine months ended September 30, 2006 and 2005 was as follows:



|                                                                 |  |                    |    |   |                   |   |    |  
|---------------------------------------------------------------- |  | ------------------ | -- | - | ----------------- | - | -- | -
|                                                                 |  | Three Months Ended |   
|                                                                 |  | September 30,2006  |    |   | September 30,2005 |  
|Non-rental depreciation and amortization                         |  | $                  | 10 |   |                   | $ | 10 |  
|Non-rental depreciation and amortization as a percent of revenue |  |                    | 1  | % |                   |   | 1  | %
|                                                                 | 
|                                                                 |  | Nine Months Ended  |   
|                                                                 |  | September 30,2006  |    |   | September 30,2005 |  
|Non-rental depreciation and amortization                         |  | $                  | 38 |   |                   | $ | 28 |  
|Non-rental depreciation and amortization as a percent of revenue |  |                    | 1  | % |                   |   | 1  | %

Non-rental depreciation and amortization includes (i) depreciation expense associated with
equipment that is not offered for rent (such as vehicles, computers and office equipment) and amortization expense associated with leasehold improvements and (ii) the amortization of other intangible assets. Our other intangible assets
primarily consist of customer relationships and non-compete agreements. During the second quarter of 2006, we determined that we had been depreciating certain vehicles on capital lease over a period which exceeded the related contractual lease
terms. As a result, our Non-rental depreciation and amortization expense for the nine months ended September 30, 2006 includes a pre-tax charge of $4 ($2 net of tax) to correct depreciation expense recorded since the fourth quarter of 2002.This correction does not affect historical or future cash flows and its effect on our current and prior years Net income, cash flows from operations, and Stockholders equity is not material.

Interest expense, net for the three and nine months ended September 30, 2006 and 2005 was as follows:



|                      |  |                    |     |                   |   |    
|--------------------- |  | ------------------ | --- | ----------------- | - | ---
|                      |  | Three Months Ended
|                      |  | September 30,2006  |     | September 30,2005
|Interest expense, net |  | $                  | 58  |                   | $ | 48 
|                      | 
|                      |  | Nine Months Ended 
|                      |  | September 30,2006  |     | September 30,2005
|Interest expense, net |  | $                  | 160 |                   | $ | 134

Interest expense, net, for the three and nine months ended September 30, 2006 increased $10
and $26, respectively. As discussed more fully in note 5 to our unaudited condensed consolidated financial statements, during the third quarter of 2006 we prepaid $400 of our outstanding term loan and retired $63 of our subordinated convertible
debentures. These transactions will reduce our interest expense going forward as well as provide us with greater financial flexibility. As a result of these transactions, Interest expense, net, for the three and nine months ended September 30,
2006 includes charges of $5.6 related to the partial write-off of deferred financing costs and a charge of $2.6 related to a partial write-off of the unamortized premium associated with the interest rate caps on our term loan. These interest rate
caps have been designated as cash flow hedges. Additionally, Interest expense, net, for the three and nine months ended September 30, 2006 includes a gain of $3.2 related to the partial termination of the interest rate caps hedging our term
loan exposures. The balance of



30



---

the increase for the three and nine months ended September 30, 2006 relates to the increase in interest costs applicable to our floating rate debt. As
of September 30, 2006, approximately 53 percent of our debt was floating rate debt.

Income taxes. The following table
summarizes our consolidated provision for income taxes and the related effective tax rate for the three and nine months ended September 30, 2006 and 2005:



|                           |  |                    |      |   |                   |   |      |  
|-------------------------- |  | ------------------ | ---- | - | ----------------- | - | ---- | -
|                           |  | Three Months Ended |     
|                           |  | September 30,2006  |      |   | September 30,2005 |  
|Pre-tax income             |  | $                  | 154  |   |                   | $ | 126  |  
|Provision for income taxes |  | $                  | 59   |   |                   | $ | 50   |  
|Effective tax rate         |  |                    | 38.3 | % |                   |   | 39.7 | %
|                           | 
|                           |  | Nine Months Ended  |     
|                           |  | September 30,2006  |      |   | September 30,2005 |  
|Pre-tax income             |  | $                  | 283  |   |                   | $ | 227  |  
|Provision for income taxes |  | $                  | 112  |   |                   | $ | 89   |  
|Effective tax rate         |  |                    | 39.6 | % |                   |   | 39.2 | %

The difference between the consolidated effective tax rates and the U.S. federal statutory income
tax rate of 35 percent primarily relates to state taxes as well as certain non-deductible charges. Additionally, the provision for income taxes for the nine months ended September 30, 2006 includes a net charge of $3 primarily related to an
identified tax contingency item.

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. We anticipate that our full year tax rate
will approximate 39.5%.

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 liquidity are cash generated from operations and from the sale of rental equipment
and borrowings available under our revolving credit facility and accounts receivables securitization facility.

As of September 30,
2006, we had (i) $414 of borrowing capacity available under the revolving credit facility portion of our $1.55 billion senior secured credit facility, (ii) no borrowing capacity available under our accounts receivables securitization
facility and (iii) cash and cash equivalents of $140. As discussed in note 9 to our unaudited condensed consolidated financial statements, in October 2006 we amended our existing accounts receivable securitization facility to, among other
things, increase the facility size from $200 to $300. We believe that our existing sources of cash will be sufficient to support our existing operations over the next twelve months.

We expect that our principal needs for cash relating to our existing operations over the next twelve months will be to fund (i) operating activities
and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service and (v) acquisitions. We plan to fund such cash requirements from cash
generated from operations as well as our existing sources of liquidity



31



---

discussed above. 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.

While emphasizing internal growth, we intend to continue to expand through a disciplined acquisition program.
We will consider potential transactions of varying sizes and may, on a selective basis, pursue acquisition or consolidation opportunities involving other public companies or large privately-held companies. We expect to pay for future acquisitions
using cash, capital stock, notes and/or assumption of indebtedness. To the extent that our existing sources of cash described above are not sufficient to fund such future acquisitions, we will require additional debt or equity financing and,
consequently, our indebtedness may increase or the ownership of existing stockholders may be diluted as we implement our growth strategy.

Sources and Uses of Cash. During the nine months ended September 30, 2006, we (i) generated cash from operations of $606, (ii) generated cash from the sale of rental equipment of $250, (iii) borrowed $200
under our accounts receivable securitization facility, (iv) borrowed $65 under our revolver and (v) received $64 of proceeds from the exercise of stock options. We used cash during this period principally to (i) prepay $400 of term
loan debt and retire $63 of our subordinated convertible debentures (ii) purchase rental equipment of $770 (including the buy-out of equipment under operating leases of $46), (iii) purchase non-rental equipment of $81 and
(iv) purchase other companies, net of cash acquired, of $39.

During the nine months ended September 30, 2005, we
(i) generated cash from operations of $414 and (ii) generated cash from the sale of rental equipment of $228. We used cash during this period principally to (i) purchase rental equipment of $680 (including the buy-out of equipment
under operating leases of $9), (ii) purchase non-rental equipment of $56 and debt repayments and pay financing costs of $66.

Our
corporate family credit ratings as of October 20, 2006 were as follows:



|        |  |                  |  |                  
|------- |  | ---------------- |  | -----------------
|        |  | Corporate Rating |  | Outlook (1)(2)(3)
|Moodys |  | B1               |  | Stable           
|S&P     |  | BB-              |  | Positive         
|Fitch   |  | BB-              |  | Stable           

---

|(1) | On September 7, 2006, Moodys changed its outlook to Stable from Developing.
|--- | ----------------------------------------------------------------------------

|(2) | On August 25, 2006, S&P changed its outlook to Positive from Developing.
|--- | ------------------------------------------------------------------------

|(3) | On June 6, 2006, Fitch changed its outlook to Stable from Negative.
|--- | -------------------------------------------------------------------

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 until our ratings reflect an investment grade rating.

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 provide 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.

Forward-Looking Statements

Certain statements in this Item 2 or contained elsewhere in this Report, as well as other oral and written statements made by us to the public,
contain and incorporate by reference forward-looking statements within the



32



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meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can generally be identified by
words such as believes, expects, plans, intends, projects, forecasts, may, will, should, on track, affirms or
anticipates, or the negative thereof or comparable terminology, or by discussions of strategy or outlook. Our businesses and operations are subject to a variety of risks and uncertainties, many of which are beyond our control, and,
consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) weaker or
unfavorable economic and industry conditions can reduce demand and prices for our products and services, (2) non-residential construction spending, or governmental funding for highway, infrastructure and other construction projects, may not
reach expected levels, (3) we may not have access to capital that our businesses or growth plans may require, (4) any companies we acquire could have undiscovered liabilities, may stretch our management capabilities or may be difficult to
integrate, (5) rates we can charge may increase less than anticipated, or costs we incur may increase more than anticipated, (6) we have significant leverage, which requires us to use a substantial portion of our cash flow for debt service
and can constrain our flexibility in responding to unanticipated or adverse business conditions, (7) we have not yet successfully remediated a previously identified material weakness in our internal controls relating to our financial close
process, (8) we are subject to an ongoing inquiry by the SEC, and there can be no assurance that its outcome will not require additional changes in our accounting policies and practices, restatements of financial statements, revisions of
results or guidance, or otherwise have adverse consequences for us and (9) we may incur additional significant expenses in connection with the SEC inquiry, our related internal reviews, the class action lawsuits and derivative actions that were
filed in light of the SEC inquiry, the U.S. Attorneys office request for information, or other litigation, regulatory or investigatory matters, related to the SEC inquiry or otherwise. For a fuller description of these and other possible
uncertainties, please refer to our 2005 Form 10-K, as well as to our subsequent filings with the SEC.

Our forward-looking statements
contained herein speak only as of the date of this Report or, in the case of any document incorporated by reference, the date of that document. We make no commitment to update or publicly release any revisions to forward-looking statements in order
to reflect new information or subsequent events, circumstances or changes in expectations.



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

Our exposure to market risk primarily consists of (i) interest rate risk associated with our variable rate debt and (ii) 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, 2006, we had swap agreements with an aggregate notional amount of $1.2 billion and cap agreements with an aggregate notional amount of $329. The effect of the swap agreements was, at
September 30, 2006, 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 61/2percent notes through 2012, (ii) $375 of our 7 percent notes, and (iii) $375 of our 73/4percent senior subordinated notes through 2013. The caps are designated as cash flow hedges and limit the interest rate on our term loan. During the third quarter of 2006, in
connection with the prepayment of $400 of term loan borrowings, the Company terminated a portion of these interest rate caps.

As of September 30, 2006, after giving effect to our interest rate swap and cap agreements, we had an aggregate of $1.6 billion of indebtedness that bears interest at variable rates. For this purpose, the portion of the term loan
subject to the cap is considered fixed. The debt that is subject to fluctuations in interest rates includes $208 of borrowings under our revolving credit facility, $1.2 billion in swaps, $2 of term loans not subject to an interest rate cap and $200
of borrowings under the accounts receivable securitization facility. The weighted-average effective interest rates applicable to our variable rate debt on September 30, 2006 were (i) 6.4% percent for the revolving credit facility,
(ii) 7.3 percent for the term loan, (iii) 8.0 percent for the debt subject to our swap agreements and (iv) 5.3 percent for our accounts receivable securitization facility. As of September 30, 2006, based upon the amount of our
variable rate debt outstanding, after giving effect to our interest rate swap



33



---

agreements, our annual earnings 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 U.S. and Canadian dollars. Based upon the level of our Canadian operations during 2005 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, 2006.

We do not engage in purchasing forward exchange contracts for speculative purposes.



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

We maintain disclosure
controls and procedures that are designed to ensure that information required to be disclosed in our 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 our Chief Executive Offer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of September 30, 2006, our 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 the design and operation of our disclosure controls and procedures, as defined in Rules 13a15(e) and 15d15(e) of the Exchange Act. Based on the continued existence of the material
weakness in internal control over financial reporting described below, our chief executive officer and chief financial officer have concluded that, as of September 30, 2006, our disclosure controls and procedures were not effective.

In light of the material weaknesses in internal control described below, we performed additional procedures to ensure that our unaudited condensed
consolidated financial statements included in this Report were prepared in accordance with GAAP. These steps included, among other actions, expansion of our closing procedures, including performing detailed analyses of accounts and review of
subsequent transactions to affirm account balances. As a result of the additional procedures, management has concluded that the unaudited condensed consolidated financial statements included in this Report are fairly stated, in all material
respects, in accordance with GAAP.

Under the supervision of our chief executive officer and chief financial officer, our management
assessed the effectiveness of our internal control over financial reporting as of December 31, 2005. In making this assessment, management used the criteria set forth inInternal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a control deficiency, or combination of
control deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. As previously described in greater detail in Item 9A of our 2005 Form
10-K, we determined that internal controls over the financial statement close process were not effective and represented a material weakness in internal control over financial reporting as of December 31, 2005. This material weakness in
internal control over financial reporting had not been effectively remediated, and therefore continued to exist, as of September 30, 2006.

During 2006, we have been implementing enhancements to the financial close process to remediate the material weakness in internal control over financial reporting, including the following:



| |  |  | Formalizing the account reconciliation and analysis processes to ensure accounts are properly analyzed and reconciled monthly;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



34



---

| |  |  | Performing additional review and documentation of the assumptions and processes used in determining the reserve balances for judgmental accounts, including converting underlying
system queries to production reports where practical;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Adopting measures to verify that journal entries have been properly prepared with supporting documentation and approved by appropriate management;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Documenting policies and procedures governing the financial statement close process; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | Appointing an experienced Corporate Controller and recruiting other additional staff for the corporate finance and accounting functions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

In addition to these remediation measures, in the first quarter of 2006 we initiated a long-term enterprise-wide finance transformation project to assess
and improve various other aspects of our financial operations and systems. Substantial improvements to our financial operations are expected to be achieved from this project over a twelve- to eighteen-month period.

Until the financial close process remediation measures discussed above are completed, the material weakness in the financial statement close process will
continue to exist. Management presently anticipates, but cannot guarantee, that the changes necessary to remediate this material weakness will be in place by year-end 2006. Until such time that the remediation is effectively completed, we will rely
on additional analyses and other detailed procedures to assist us with meeting the objectives otherwise fulfilled by an effective internal control environment.

Changes in Internal Control over Financial Reporting

As previously reported in our Current Report on Form 8-K filed on
September 1, 2006, during the third quarter of 2006, we announced the appointment of a member of financial management as Senior Vice President and Controller and the appointment of another member of financial management as Vice President and
Assistant Corporate Controller and Principal Accounting Officer. Except for these appointments and the ongoing progress related to the other remediation measures discussed above, there were no changes in our internal control over financial reporting
during the quarter ended September 30, 2006 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.



35



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PART II. OTHER INFORMATION



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

The information set forth under
note 6 of our unaudited condensed consolidated financial statements in this Report is incorporated by reference in answer to this Item.



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

There have been no material changes
with respect to this Item from the disclosure included in our 2005 Form 10-K.



|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 2006:



|                                        |  |                                     |  |                             |      
|--------------------------------------- |  | ----------------------------------- |  | --------------------------- | -----
|Period                                  |  | Total Number ofShares Purchased (1) |  | Average PricePaid per Share
|July 1, 2006 to July 31, 2006           |  | 9,052                               |  | $                           | 27.70
|August 1, 2006 to August 31, 2006       |  | 5,442                               |  | $                           | 21.08
|September 1, 2006 to September 30, 2006 |  | 16,252                              |  | $                           | 22.83
|                                        |  |                                     |  |                             |      
|Total                                   |  | 30,746                              |  |                             |      
|                                        |  |                                     |  |                             |      

---

|(1) | The shares were surrendered to the Company by employees in order to satisfy tax withholding obligations upon the vesting of restricted stock, except for 8,429 of the shares
reflected in September, which were acquired pursuant to an employees put right in a severance agreement. These shares were not acquired pursuant to any repurchase plan or program.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36



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

(a) Exhibits:



|              |      |  |                                                                                                                                                                                                                                                          
|------------- | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |      |  | Description of Exhibit                                                                                                                                                                                                                                   
|3             | (a)  |  | Amended and Restated Certificate of Incorporation of United Rentals, Inc., (incorporated by reference to exhibit 3.1 of United Rentals, Inc. Report on Form 10-Q for the quarter ended
June 30, 1998)                                                    
|              |     
|3             | (b)  |  | Certificate of Amendment to the United Rentals, Inc. Amended and Restated Certificate of Incorporation dated, September 29, 1998 (incorporated by reference to Exhibit 4.2 to the United
Rentals, Inc. Registration Statement on Form S-3, No. 333-70151)
|              |     
|3             | (c)  |  | By-laws of United Rentals, Inc. (incorporated by reference to exhibit 3.2 of United Rentals, Inc. Report on Form 10-Q for the quarter ended June 30, 1998)                                                                                               
|              |     
|3             | (d)  |  | Form of Certificate of Designation for Series C Perpetual Convertible Preferred Stock (incorporated by reference to exhibit 3(f) of United Rentals, Inc. Report on Form 10-Q for the quarter
ended September 30, 2001)                                   
|              |     
|3             | (e)  |  | Form of Certificate of Designation for Series D Perpetual Convertible Preferred Stock (incorporated by reference to exhibit 3(g) of United Rentals, Inc. Report on Form 10-Q for the quarter
ended September 30, 2001)                                   
|              |     
|3             | (f)  |  | 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             | (g)  |  | 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             | (h)  |  | 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. Report on Form
10-Q for the quarter ended June 30, 1998)                
|              |     
|3             | (i)  |  | By-laws of United Rentals (North America), Inc., (incorporated by reference to Exhibit 3.4 of the United Rentals (North America), Inc. Report on Form 10-Q for the quarter ended June 30,
1998)                                                          
|              |     
|10            | (a)  |  | Employment Agreement dated August 30, 2006, between United Rentals, Inc. and Todd Helvie (incorporated by reference to Exhibit 10.1 of United Rentals, Inc. Report on Form 8-K filed September
1, 2006)                                                  
|              |     
|10            | (b)  |  | Employment Agreement dated August 30, 2006, between United Rentals, Inc. and John Fahey (incorporated by reference to Exhibit 10.2 of United Rentals, Inc. Report on Form 8-K filed September
1, 2006)                                                   
|              |     
|31            | (a)* |  | Rule 13a-14(a) Certification by Chief Executive Officer                                                                                                                                                                                                  
|              |     
|31            | (b)* |  | Rule 13a-14(a) Certification by Chief Financial Officer                                                                                                                                                                                                  
|              |     
|32            | (a)* |  | Section 1350 Certification by Chief Executive Officer                                                                                                                                                                                                    
|              |     
|32            | (b)* |  | Section 1350 Certification by Chief Financial Officer                                                                                                                                                                                                    

---

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



37



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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, 2006 |  |                      |  | By:                                  |  | /s/    JOHN J. FAHEY                                                                        
|       |  |                  |  |                      |  |                                      |  |                                                                                             
|       |  |                  |  |                      |  |                                      |  | John J. Fahey Vice President-Assistant
Corporate Controller and Principal Accounting Officer
|       |  |                  |  |                     
|       |  |                  |  |                      |  |                                      |  | /s/    TODD G. HELVIE                                                                       
|       |  |                  |  |                      |  |                                      |  |                                                                                             
|       |  |                  |  |                      |  |                                      |  | Senior Vice President and Controller                                                        
|       |  |                  | 
|       |  |                  |  |                      |  | UNITED RENTALS (NORTH AMERICA), INC.
|       |  |                  |  |                     
|Dated: |  | October 31, 2006 |  |                      |  | By:                                  |  | /s/    JOHN J. FAHEY                                                                        
|       |  |                  |  |                      |  |                                      |  |                                                                                             
|       |  |                  |  |                      |  |                                      |  | John J. Fahey Vice President-Assistant
Corporate Controller and Principal Accounting Officer
|       |  |                  |  |                     
|       |  |                  |  |                      |  |                                      |  | /s/    TODD G. HELVIE                                                                       
|       |  |                  |  |                      |  |                                      |  |                                                                                             
|       |  |                  |  |                      |  |                                      |  | Senior Vice President and Controller                                                        



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