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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
    þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED:
    DECEMBER 31, 2007-OR-o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934  Commission File
    No. 001-33485
  
 RSC Holdings Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

22-1669012(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)6929 E. Greenway Pkwy
    Scottsdale, Arizona(Address of principal
    executive offices)

85254(zip code)   Registrants telephone
    number, including area code:
 (480) 905-3300
 Securities registered pursuant
    to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, Par Value $.01 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated
    filer o

Accelerated filer
    o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Documents Incorporated by
    Reference:




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##### 





TABLE OF
    CONTENTS
   
 Cautionary Statement for Forward-Looking Information


iiPART I




1Item 1.

Business


1Item 1A.

Risk Factors


11Item 1B.

Unresolved Staff Comments


22Item 2.

Properties


22Item 3.

Legal Proceedings


22Item 4.

Submission of Matters to a Vote of Security
    Holders


22PART II




23Item 5.

Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


23Item 6.

Selected Financial Data


25Item 7.

Managements Discussion and Analysis of
    Financial Conditions and Results of Operations


27Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


40Item 8.

Financial Statements and Supplementary Data


41Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


41Item 9A.(T)

Controls and Procedures


41Item 9B.

Other Information


42PART III




42Item 10.

Directors, Executive Officers and Corporate
    Governance


42Item 11.

Executive Compensation


42Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


42Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


42Item 14.

Principal Accountant Fees and Services


42PART IV




43Item 15.

Exhibits and Financial Statement Schedules


43EX-12EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   i




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Introductory
    Note
  Form 10-K,
    Cautionary
    Statement for Forward-Looking Information
        
    the effect of an economic downturn or other factors resulting in
    a decline in non-residential construction and capital investment;  
    increased competition from other companies in our industry and
    our inability to increase or maintain our prices;  
    risks related to the credit markets willingness to continue to
    lend to borrowers rated B- and Caa1;
    our ability to generate cash
    and/or incur
    additional indebtedness to finance equipment purchases;
    heavy reliance on centralized information systems;
    exposure to claims for personal injury, death and property
    damage resulting from the use of equipment rented or sold by us;
    the effect of changes in laws and regulations, including those
    relating to the environment and customer privacy, among others;
    fluctuations in fuel or supply costs;
    claims that the software products and information systems on
    which we rely infringe on the intellectual property rights of
    others; and
    the other factors described in Item 1A of this Annual
    Report under the caption Risk Factors. ii




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iii




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PART I  Item 1.
    Business  Our
    Company
  Overview
  year-over-year
    Organizational
    Overview
      1 2
 1




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Business
    Strategy
  Increase market share and pursue profitable
    growth.
  
    continuing to drive the profitability of existing branches and
    pursuing same store growth;
    continuing to invest in and maintain our high quality fleet to
    meet local customer demands;
    leveraging our reputation for superior customer service to
    increase our customer base;
    increasing our market penetration by opening new branches in
    targeted markets to leverage existing infrastructure and
    customer relationships;
    increasing our presence in complementary rental and service
    offerings to increase same store revenues, margins and return on
    investment;
    continuing to align incentives for local management teams with
    both profit and growth targets; and
    pursuing selected acquisitions in attractive markets, subject to
    economic conditions.  Further drive profitability, cash flow and return on
    capital.
  
    focus on the higher margin rental business;
    actively manage the quality, reliability and availability of our
    fleet and offer superior customer service, which supports our
    premium pricing strategy;
    evaluate each new investment in fleet based on strict return
    guidelines;
    deploy and allocate fleet among our operating regions based on
    pre-specified return thresholds to optimize utilization; and
    use our size and market presence to achieve economies of scale
    in capital investment.  Further enhance our industry leading customer
    service.
 2




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Business
        Operations
      Customers
     3




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
    run and maintain, which relates to day to day
    maintenance;
    turnaround, which relates to major planned
    general overhaul of operations; and
    capital projects, which relate to smaller
    expansion or modification work.  on-site ®
    Customer Service. best-in-class
  Fleet
   4




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Equipment
    Rental Fleet Breakdown
  As of December 31, 2007

% of TotalAerial Work Platform (AWP) booms


29.3Fork lifts


22.6Earth moving


18.1AWP scissors


11.1Trucks


4.3Air


3.4Generators/Light towers


2.8Compaction


2.6Other


5.8   Fleet Management Process. branch-by-branch
         5




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Fleet Procurement.
    Fleet Age. Fleet Management Process
  Sales and
    Marketing
    
    a branch-based sales force operating out of our network of local
    branches;
    local and national advertising efforts; and
    our self-service, web-based solution: RSC
    Online®.  Sales Force.
  RSC
    Online ® ® pick-ups (http://www.rscrental.com)
 6




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Information
    Systems
      
    fleet utilization and return on investment by individual asset,
    equipment category, branch, district or region;
    pricing and discounting trends by branch, district, region,
    salesperson, equipment category or customer;
    revenue trends by branch, district, region, salesperson,
    equipment category or customer; and
    financial results and performance of branches, districts,
    regions and the overall company.    Intellectual
    Property
    Competition
      Employees
   7




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Regulatory
    Matters
  Environmental,
    Health and Safety Matters
          Transportation,
    Delivery and Sales Fleet
    Management
    Name

Age

PositionErik Olsson


44


President, Chief Executive Officer and DirectorCharles Foster


48


Senior Vice President of OperationsHomer Graham


56


Senior Vice President of OperationsKevin Groman


37


Senior Vice President, General Counsel and Corporate SecretaryPhillip Hobson


41


Senior Vice President, Corporate OperationsDavid Ledlow


49


Senior Vice President of OperationsDavid Mathieson


53


Senior Vice President and Chief Financial OfficerJoseph Turturica


40


Senior Vice President and Chief People Officer  8




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Erik Olsson
  Charles Foster
  Homer Graham
  Kevin Groman
  Phillip Hobson
  David Ledlow
  David Mathieson
  Joseph Turturica
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K
 9




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1-800-SEC-0330. http://www.sec.gov
  RECENT
    TRANSACTIONS
  The
    Recapitalization
    Recapitalization
    Agreement
    Contingent
    Earn-Out Notes
             10




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Initial
    Public Offering
    Item 1A.
    Risk
    Factors.  Our business is subject to a number of important risks and
    uncertainties, some of which are described below. Any of these
    risks may have a material adverse effect on our business,
    financial condition, results of operations and cash flows.
  Risks
    Related to Our Business
  Our
    business could be hurt by a decline in non-residential
    construction and industrial activities or a decline in the
    amount of construction equipment that is rented.
    
    weakness in the economy or the onset of a recession;
    an increase in the cost of construction materials;
    an increase in interest rates;
    adverse weather conditions or natural disasters; or
    terrorism or hostilities involving the United States or Canada.    We
    face intense competition that may lead to our inability to
    increase or maintain our prices, which could have a material
    adverse impact on our results of operations.
   11




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Our
    revenues and operating results may fluctuate and any unexpected
    periods of decline could have a material adverse effect on our
    business, financial condition, results of operations and cash
    flows.
    
    changes in demand for our equipment or the prices we charge due
    to changes in economic conditions, competition or other factors;
    the timing of expenditures for new equipment and the disposal of
    used equipment;
    changes in the interest rates applicable to our variable rate
    debt;
    general economic conditions in the markets where we operate;
    the cyclical nature of our customers businesses,
    particularly those operating in the non-residential construction
    and industrial sectors;
    price changes in response to competitive factors;
    seasonal rental patterns, with rental activity tending to be
    lowest in the winter;
    timing of acquisitions and new location openings and related
    costs;
    labor shortages, work stoppages or other labor difficulties;
    possible unrecorded liabilities of acquired companies;
    our effectiveness in integrating acquired businesses and new
    locations into our existing operations; and
    possible write-offs or exceptional charges due to changes in
    applicable accounting standards, impairment of obsolete or
    damaged equipment or other assets, or the refinancing of our
    existing debt.    Our
    expenses could increase and our relationships with our customers
    could be hurt if there is an adverse change in our relationships
    with our equipment suppliers or if our suppliers are unable to
    provide us with products we rely on to generate
    revenues.
   12




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If our
    operating costs increase as our rental fleet ages and we are
    unable to pass along such costs, our earnings will
    decrease.
    The
    cost of new equipment we use in our rental fleet is increasing
    and therefore we may spend more for replacement equipment, and
    in some cases we may not be able to procure equipment on a
    timely basis due to supplier constraints.
    Our
    rental fleet is subject to residual value risk upon
    disposition.
    
    the market price for new equipment of a like kind;
    wear and tear on the equipment relative to its age and the
    performance of preventive maintenance;
    the time of year that it is sold;
    worldwide and domestic demand for used equipment; and
    general economic conditions.    Our
    reliance on available borrowings under our Senior ABL Facilities
    and cash from operating activities to purchase new equipment
    subjects us to a number of risks, many of which are beyond our
    control.
   13




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Any
    failure of ACAB and ACF to indemnify us against and defend us
    from certain claims in accordance with the terms of the
    Recapitalization Agreement could have a material adverse effect
    on us.
    Disruptions
    in our information technology systems could limit our ability to
    effectively monitor and control our operations and adversely
    affect our operating results.
    The
    Sponsors or their affiliates may compete directly against
    us.
    ACAB may compete against us in the future.
   14




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If we
    acquire any businesses in the future, they could prove difficult
    to integrate, disrupt our business, or have an adverse effect on
    our results of operations.
    
    potential disruption of our ongoing business and distraction of
    management;
    difficulty integrating the acquired business; and
    exposure to unknown liabilities, including litigation against
    the companies we may acquire.    If we
    fail to retain key management and personnel, we may be unable to
    implement our business plan.
    We are
    exposed to various possible claims relating to our business and
    our insurance may not fully protect us.
     15




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We may
    be unable to establish and/or maintain an effective system of
    internal control over financial reporting and comply with
    Section 404 of the Sarbanes-Oxley Act of 2002 and other
    related provisions of the U.S. securities laws.
  and/or and/or and/or and/or
  Environmental,
    health and safety laws, regulations and requirements and the
    costs of complying with them, or any liability or obligation
    imposed under them, could adversely affect our financial
    position, results of operations or cash flow.
            We may
    not be able to adequately protect our intellectual property and
    other proprietary rights that are material to our
    business.
   16




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Certain
    of our existing stockholders have significant
    control.
      We
    face risks related to changes in our ownership.
    Risks
    Related to Our Indebtedness
  We
    have substantial debt and may incur substantial additional debt,
    which could adversely affect our financial condition, our
    ability to obtain financing in the future and our ability to
    react to changes in our business.
      
    make it more difficult for us to satisfy our obligations to the
    holders of our Notes and to the lenders under our Senior Credit
    Facilities, resulting in possible defaults on and acceleration
    of such indebtedness;
    require us to dedicate a substantial portion of our cash flow
    from operations to make payments on our debt, which would reduce
    the availability of our cash flow from operations to fund
    working capital, capital expenditures or other general corporate
    purposes;
    increase our vulnerability to general adverse economic and
    industry conditions, including interest rate fluctuations,
    because a portion of our borrowings, including under the Senior
    Credit Facilities, is at variable rates of interest; 17




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
    place us at a competitive disadvantage to our competitors with
    proportionately less debt or comparable debt at more favorable
    interest rates;
    limit our ability to refinance our existing indebtedness or
    borrow additional funds in the future;
    limit our flexibility in planning for, or reacting to, changing
    conditions in our business and industry; and
    limit our ability to react to competitive pressures, or make it
    difficult for us to carry out capital spending that is necessary
    or important to our growth strategy and our efforts to improve
    operating margins.    Despite
    our current indebtedness levels, we and our subsidiaries may be
    able to incur substantial additional debt, which could further
    exacerbate the risks associated with our substantial
    indebtedness.
    We may
    not be able to generate sufficient cash to service all of our
    debt, and may be forced to take other actions to satisfy our
    obligations under such indebtedness, which may not be
    successful.
      A
    significant portion of our outstanding indebtedness is secured
    by substantially all of our consolidated assets. As a result of
    these security interests, such assets would only be available to
    satisfy claims of our general creditors or to holders of our
    equity securities if we were to become insolvent to the extent
    the value of such assets exceeded the amount of our indebtedness
    and other obligations. In addition, the existence of these
    security interests may adversely affect our financial
    flexibility.
   18




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Restrictive
    covenants in certain of the agreements and instruments governing
    our indebtedness may adversely affect our financial
    flexibility.
    
    incur additional indebtedness or provide guarantees;
    engage in mergers, acquisitions or dispositions;
    enter into sale-leaseback transactions;
    make dividends and other restricted payments;
    prepay other indebtedness;
    engage in certain transactions with affiliates;
    make other investments;
    change the nature of our business;
    incur liens;
    take actions other than those enumerated; and
    amend specified debt agreements.      
    incur additional debt;
    pay dividends or distributions on their capital stock or
    repurchase their capital stock;
    make certain investments;
    create liens on their assets to secure debt; 19




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
    enter into certain transactions with affiliates;
    create limitations on the ability of the restricted subsidiaries
    to make dividends or distributions to their respective parents;
    merge or consolidate with another company; and
    transfer and sell assets.    The
    instruments governing our debt contain cross default or cross
    acceleration provisions that may cause all of the debt issued
    under such instruments to become immediately due and payable as
    a result of a default under an unrelated debt
    instrument.
    Risks
    Related to our Common Stock and Market and Economic
    Factors
  RSC
    Holdings is a holding company with no operations of its own that
    depends on its subsidiaries for cash.
    Our
    operating and financial performance in any given period might
    not meet the guidance we have provided to the
    public.
   20




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Fluctuations
    in the stock market, as well as general economic and market
    conditions may impact our operations, sales, financial results
    and market price of our common stock.
    
    general economic changes, including rising interest rates,
    increased fuel costs and other energy costs; increased labor and
    healthcare costs, and increased levels of unemployment;
    variations in quarterly operating results;
    changes in the strategy and actions taken by our competitors,
    including pricing changes;
    securities analysts elections to discontinue coverage of our
    common stock, changes in financial estimates by analysts or a
    downgrade of our stock or our sector by analysts;
    announcements by us or our competitors of significant contracts,
    acquisitions, strategic partnerships, joint ventures or capital
    commitments;
    loss of a large customer or supplier;
    future sales of our common stock;
    investor perceptions of us and the equipment rental industry;
    our ability to successfully integrate acquisitions and
    consolidations; and
    national or regional catastrophes or circumstances and natural
    disasters, hostilities and acts of terrorism.    Our
    share price may decline due to the large number of shares
    eligible for future sale.
      Our
    certificate of incorporation, by-laws and Delaware law may
    discourage takeovers and business combinations that our
    stockholders might consider in their best
    interests.
    
    establishment of a classified Board of Directors, with staggered
    terms;
    granting to the Board of Directors sole power to set the number
    of directors and to fill any vacancy on the Board of Directors,
    whether such vacancy occurs as a result of an increase in the
    number of directors or otherwise;
    limitations on the ability of stockholders to remove directors; 21




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
    the ability of the Board of Directors to designate and issue one
    or more series of preferred stock without stockholder approval,
    the terms of which may be determined at the sole discretion of
    the Board of Directors;
    prohibition on stockholders from calling special meetings of
    stockholders;
    establishment of advance notice requirements for stockholder
    proposals and nominations for election to the Board of Directors
    at stockholder meetings; and
    prohibiting our stockholders from acting by written consent if
    the Sponsors cease to collectively hold a majority of our
    outstanding common stock.      Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Security Holders   22




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PART II  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
      For the Year Ending December 31, 2007 (commencing
    May 23, 2007)
  High


LowSecond Quarter

$
21.75


$
17.91Third Quarter


22.26



15.60Fourth Quarter


17.51



10.00     Dividends
     23




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Recent
    Performance
  Stock Performance Graph. The performance graph and related
    information shall not be deemed filed with the
    Securities and Exchange Commission, nor shall such information
    be incorporated by reference into any future filing under the
    Securities Act of 1933 or Securities Exchange Act of 1934, each
    as amended except to the extent that we specifically incorporate
    it by reference into such filing.
  7359  services-miscellaneous
    equipment rental & leasing
  COMPARISON OF 7 MONTH CUMULATIVE TOTAL RETURN*
 Among RSC Holdings Inc. The Russell 2000 Index And A Peer
    Group
  
  *
    
    $100 invested on 5/23/07 in stock or 4/30/07 in index-including
    reinvestment of dividends.
    Fiscal year ending December 31.Copyright©
    2008, Standard & Poors, a division of The McGraw-Hill
    Companies, Inc. All rights reserved.  Equity
    Compensation Plan Information
    Number ofSecuritiesNumber of





Remaining AvailableSecurities to Be





for Future IssuanceIssued Upon


Weighted-Average


Under EquityExercise of


Exercise Price of


Compensation PlansOutstanding


Outstanding


(ExcludingOptions, Warrants


Options, Warrants


Securities Reflectedand Rights


and Rights


in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders(1)


7,382,943


$
7.58



1,488,543Equity compensation plans not approved by security holders










Total


7,382,943


$
7.58



1,488,543    (1)
    
    Represents the RSC Holdings Inc. Amended and Restated Stock
    Incentive Plan. 24




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Item 6.
    Selected
    Financial Data      Year Ended December 31,2007


2006


2005


2004


2003($ in thousands, except per share data)Consolidated statements of income data:Revenues:Equipment rental revenue

$
1,543,175


$
1,368,712


$
1,140,329


$
984,517


$
899,203Sale of merchandise


80,649



92,524



102,894



162,720



178,374Sale of used rental equipment


145,358



191,652



217,534



181,486



140,424Total revenues


1,769,182



1,652,888



1,460,757



1,328,723



1,218,001Cost of revenues:Cost of equipment rentals, excluding depreciation


642,199



591,340



527,208



492,323



494,056Depreciation  rental equipment


295,248



253,379



212,325



192,323



187,859Cost of sales of merchandise


49,304



57,636



69,914



122,873



138,056Cost of rental equipment sales


103,076



145,425



173,276



147,131



110,458Total cost of revenues


1,089,827



1,047,780



982,723



954,650



930,429Gross profit


679,355



605,108



478,034



374,073



287,572Other operating expenses:Selling, general, and administrative


155,263



134,967



122,281



118,130



128,044Management fees and recapitalization expenses(1)(2)


23,000



10,836











Depreciation and amortization  non-rental equipment


46,226



38,783



33,776



32,641



32,320Total operating expenses


224,489



184,586



156,057



150,771



160,364Operating income


454,866



420,522



321,977



223,302



127,208Interest expense, net(3)


253,478



116,370



64,280



45,666



54,983Other income, net


(1,126
)


(311
)


(100
)


(58
)


(119
)Income before provisions for income taxes


202,514



304,463



257,797



177,694



72,344Provision for income taxes


79,260



117,941



93,600



66,717



26,437Net income

$
123,254


$
186,522


$
164,197


$
110,977


$
45,907Preferred dividends






(7,997
)


(15,995
)


(15,995
)


(3,999
)Net income available for common stockholders

$
123,254


$
178,525


$
148,202


$
94,982


$
41,908Weighted average shares outstanding used in computing net income
    per common share:Basic(5)


98,237



307,845



330,697



330,697



330,697
(4)Diluted(5)


99,632



307,845



330,697



330,697



330,697
(4)Net income per common share:Basic(6)

$
1.25


$
0.58


$
0.45


$
0.29


$
0.13Diluted(6)

$
1.24


$
0.58


$
0.45


$
0.29


$
0.13   25




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##### Table of Contents



Year Ended December 31,2007


2006


2005


2004


2003($ in thousands)Other financial data:Depreciation of rental equipment and depreciation and
    amortization of non-rental equipment

$
341,474


$
292,162


$
246,101


$
224,964


$
220,179Capital expenditures:Rental

$
580,194


$
721,258


$
691,858


$
419,900


$
243,777Non-rental


20,674



28,592



4,641



33,490



9,727Proceeds from sales of used equipment and non-rental equipment


(156,678
)


(207,613
)


(233,731
)


(215,622
)


(146,956
)Net capital expenditures

$
444,190


$
542,237


$
462,768


$
237,768


$
106,548Other operational data (unaudited):Utilization(7)


72.8
%


72.0
%


70.6
%


67.7
%


63.9
%Average fleet age (months)


26



25



30



40



44Same store rental revenues growth(8)


11.1
%


18.9
%


17.6
%


11.8
%


0.9
%Employees(9)


5,486



5,187



4,938



4,812



5,083Original equipment fleet cost (in millions)(10)

$
2,670


$
2,346


$
1,975


$
1,754


$
1,742Consolidated balance sheet data:Rental equipment, net

$
1,929,514


$
1,738,670


$
1,420,545


$
1,127,481


$
1,045,574Total assets


3,460,337



3,325,956



2,764,431



2,421,674



2,330,297Debt


2,736,225



3,006,426



1,246,829



1,277,305



1,428,614Total liabilities


3,504,435



3,760,589



1,950,625



1,758,982



1,766,066Total stockholders equity (deficit)


(44,098
)


(434,633
)


813,806



662,692



564,231     (1)
    
    In conjunction with the Recapitalization, we entered into a
    monitoring agreement whereby we would pay management fees of
    $1.5 million per quarter to the Sponsors. The management
    fee was terminated in connection with our initial public
    offering and a $20.0 million termination fee (also included
    in management fees) was paid.(2)
    
    The 2006 amount includes Recapitalization expenses of
    approximately $10.3 million for fees and expenses related
    to the consummation of the Recapitalization that were not
    otherwise capitalized or applied to stockholders equity.(3)
    
    Interest expense for the year ended December 31, 2007
    includes a $4.6 million prepayment penalty related to the
    $230.7 million repayment of Senior Term Facility debt and
    the write-off of $5.0 million of deferred financing costs
    associated with the repayment.(4)
    
    For 2003, weighted average shares outstanding used in computing
    basic and diluted net income per common share and basic and
    diluted net income per common share are unaudited.(5)
    
    Weighted average shares outstanding were significantly reduced
    in 2007 as a result of our Recapitalization.(6)
    
    Basic net income per common share has been computed using the
    weighted average number of shares of common stock outstanding
    during the period. Diluted net income per common share has been
    computed using the weighted average number of shares of common
    stock outstanding during the period, increased to give effect to
    any potentially dilutive securities. Additionally, for purposes
    of calculating basic and diluted net income per common share,
    net income has been adjusted for preferred stock dividends.
    There were no dilutive securities outstanding during 2006, 2005,
    2004 and 2003. 26




---



##### Table of Contents



(7)
    
    Utilization is defined as the average aggregate dollar value of
    equipment rented by customers (based on original rented
    equipment cost) for the relevant period divided by the average
    aggregate dollar value of all equipment (based on original
    equipment cost) for the relevant period.    For the Year Ended December 31,2007


2006


2005


2004


2003(In millions)Average aggregate dollar value of all equipment (original cost)

$
2,535.7


$
2,197.8


$
1,861.1


$
1,779.0


$
1,796.0Average aggregate dollar value of equipment on rent


1,844.9



1,582.8



1,314.7



1,205.1



1,148.2Utilization


72.8
%


72.0
%


70.6
%


67.7
%


63.9
%   (8)
    
    Same store rental revenue growth is calculated as the year over
    year change in rental revenue for branches that are open at the
    end of the period reported and have been operating under our
    direction for more than 12 months.(9)
    
    Employee count is given as of the end of the period indicated
    and the data reflect the actual head count as of each period
    presented.(10)
    
    Original Equipment Fleet Cost (OEC) is defined as
    the original dollar value of equipment purchased from the
    original equipment manufacturer (OEM). Fleet
    purchased from non-OEM sources are assigned comparable OEC
    dollar value at the time of purchase.  Item 7.
    Managements
    Discussion and Analysis of Financial Conditions and Results of
    Operations  Overview
        Factors
    Affecting Our Results of Operations
   27




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
    Form 10-K.
  Rental
    Equipment
      Reserve
    for Claims
   28




---



##### Table of Contents



Derivative
    Instruments and Hedging Activities
  Accounting for Derivative
    Instruments and Hedging Activities
  Share-Based
    Compensation
  Share-Based
    Payment Accounting for Stock-Based Compensation
    Long-Lived
    Assets and Goodwill
         29




---



##### Table of Contents



Revenue
    Recognition
      Income
    Taxes
    Accounting for Income Taxes Accounting for
    Uncertainty in Income Taxes
    The
    Recapitalization
  Structure
    of the Recapitalization
   30




---



##### Table of Contents



Accounting
    Treatment
    Initial
    Public Offering
    Results
    of Operations
  Revenues:
  
    Equipment rental revenue consists of fees charged to customers
    for use of equipment owned by us over the term of the rental as
    well as other fees charged to customers for items such as,
    delivery and pickup, fuel and damage waivers.
    Merchandise sales revenues represent sales of contractor
    supplies, consumables and ancillary products and, to a lesser
    extent, new equipment.
    Sale of used rental equipment represents revenues derived from
    the sale of rental equipment that has previously been included
    in our rental fleet.  Cost of
    revenues:
  
    Cost of revenues for equipment rentals consists primarily of
    wages and benefits for employees involved in the delivery and
    maintenance of rental equipment, rental location facility costs
    and rental equipment repair and maintenance expenses.
    Depreciation  rental equipment consists of
    straight-line depreciation of equipment included in our rental
    fleet.
    Cost of sales of merchandise represents the costs of acquiring
    those items.
    Cost of rental equipment sales represents the net book value of
    rental equipment at the date of sale.   31




---



##### Table of Contents



Year
    Ended December 31, 2007 Compared with Year Ended
    December 31, 2006
    Percent of RevenueTwelve Months Ended


Twelve Months EndedDecember 31,


December 31,


Increase (Decrease)2007


2006


2007


2006


2007 Versus 2006Revenues:Equipment rental revenue

$
1,543,175


$
1,368,712



87.2
%


82.8
%

$
174,463



12.7
%Sale of merchandise


80,649



92,524



4.6



5.6



(11,875
)


(12.8
)Sale of used rental equipment


145,358



191,652



8.2



11.6



(46,294
)


(24.2
)Total revenues


1,769,182



1,652,888



100.0



100.0



116,294



7.0Cost of revenues:Cost of equipment rentals, excluding depreciation


642,199



591,340



36.3



35.8



50,859



8.6Depreciation rental equipment


295,248



253,379



16.7



15.3



41,869



16.5Cost of merchandise sales


49,304



57,636



2.8



3.5



(8,332
)


(14.5
)Cost of used rental equipment sales


103,076



145,425



5.8



8.8



(42,349
)


(29.1
)Total cost of revenues


1,089,827



1,047,780



61.6



63.4



42,047



4.0Gross profit


679,355



605,108



38.4



36.6



74,247



12.3Operating expensesSelling, general and administrative


155,263



134,967



8.8



8.2



20,296



15.0Management fees and Recapitalization expenses


23,000



10,836



1.3



0.7



12,164



112.3Depreciation and amortization nonrental equipment


46,226



38,783



2.6



2.3



7,443



19.2Total operating expenses


224,489



184,586



12.7



11.2



39,903



21.6Operating income


454,866



420,522



25.7



25.4



34,344



8.2Interest expense, net


253,478



116,370



14.3



7.0



137,108



117.8Other income, net


(1,126
)


(311
)


(.1
)






(815
)


262.1Income before provision for income taxes


202,514



304,463



11.4



18.4



(101,949
)


(33.5
)Provision for income taxes


79,260



117,941



4.5



7.1



(38,681
)


(32.8
)Net income

$
123,254


$
186,522



7.0
%


11.3
%

$
(63,268
)


(33.9
)      32




---



##### Table of Contents



33




---



##### Table of Contents



Year
    Ended December 31, 2006 Compared with Year Ended
    December 31, 2005
    Percent of RevenueTwelve Months Ended


Twelve Months EndedDecember 31,


December 31,


Increase (Decrease)2006


2005


2006


2005


2006 Versus 2005Revenues:Equipment rental revenue

$
1,368,712


$
1,140,329



82.8
%


78.1
%

$
228,383



20.0
%Sale of merchandise


92,524



102,894



5.6



7.0



(10,370
)


(10.1
)Sale of used rental equipment


191,652



217,534



11.6



14.9



(25,882
)


(11.9
)Total revenues


1,652,888



1,460,757



100.0



100.0



192,131



13.2Cost of revenues:Cost of equipment rentals, excluding depreciation


591,340



527,208



35.8



36.1



64,132



12.2Depreciation  rental equipment


253,379



212,325



15.3



14.5



41,054



19.3Cost of merchandise sales


57,636



69,914



3.5



4.8



(12,278
)


(17.6
)Cost of used rental equipment sales


145,425



173,276



8.8



11.9



(27,851
)


(16.1
)Total cost of revenues


1,047,780



982,723



63.4



67.3



65,057



6.6Gross profit


605,108



478,034



36.6



32.7



127,074



26.6Operating expenses:Selling, general, and administrative


134,967



122,281



8.2



8.4



12,686



10.4Management fees and Recapitalization expenses


10,836







0.7







10,836



100.0Depreciation and amortization  nonrental equipment


38,783



33,776



2.3



2.3



5,007



14.8Total operating expenses


184,586



156,057



11.2



10.7



28,529



18.3Operating income


420,522



321,977



25.4



22.0



98,545



30.6Interest expense, net


116,370



64,280



7.0



4.4



52,090



81.0Other income, net


(311
)


(100
)










(211
)


211.0Income before provision for income taxes


304,463



257,797



18.4



17.6



46,666



18.1Provision for income taxes


117,941



93,600



7.1



6.4



24,341



26.0Net income

$
186,522


$
164,197



11.3
%


11.2
%

$
22,325



13.6
%    34




---



##### Table of Contents



35




---



##### Table of Contents



Liquidity
    and Capital Resources
  Cash and
    Cash Flows
          Indebtedness
   36




---



##### Table of Contents



Senior ABL Facilities.
  ConsolidatedFiscal Quarter Ending

Leverage RatioDecember 31, 2007


5.00:1.00March 31, 2008


4.75:1.00June 30, 2008


4.75:1.00September 30, 2008


4.75:1.00December 31, 2008


4.75:1.00March 31, 2009


4.50:1.00June 30, 2009


4.50:1.00September 30, 2009


4.50:1.00December 31, 2009


4.50:1.00March 31, 2010 and at all times thereafter


4.25:1.00     Senior Term Facility.
  The Notes. 1 2
 37




---



##### Table of Contents



1 2 1 2
  Liquidity
          Contractual
    Obligations
   38




---



##### Table of Contents



Payments Due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In millions)Contractual ObligationsDebt

$
2,594.2


$
2.5


$
5.0


$
1,067.4


$
1,519.3Capital Leases


142.0



33.6



58.4



35.0



15.0Interest on Debt and Capital Leases(1)


1,185.6



215.6



426.7



358.4



184.9Operating Leases


172.7



47.2



74.7



39.4



11.4Purchase Obligations(2)


17.7



17.7











Total

$
4,112.2


$
316.6


$
564.8


$
1,500.2


$
1,730.6     (1)
    
    Estimated interest for debt for all periods presented is
    calculated using the interest rate effective as of
    December 31, 2007 of (i) 7.0% for the Senior ABL
    Facilities, (ii) 8.75% for the unhedged portion and 8.14%
    for the hedged portion of the Senior Term Facility, (iii) .25%
    on the $622.0 million of undrawn capacity under the
    revolving portion of the Senior ABL Facilities and
    (iv) 9.50% on the Notes and (v) 4.6% for capital
    leases. Principal payments are reflected when contractually
    required, and no early paydowns are reflected.(2)
    
    As of December 31, 2007, we had outstanding purchase orders
    with our equipment suppliers. These purchase orders, which were
    negotiated in the ordinary course of business, total
    approximately $17.7 million. Generally, these purchase
    orders can be cancelled by us with 30 days notice and
    without cancellation penalties.  Capital
    Expenditures
    Rental Equipment


Property and Non-Rental EquipmentGross Capital


Disposal


Net Capital


Gross Capital


Disposal


Net CapitalExpenditures


Proceeds


Expenditures


Expenditures


Proceeds


Expenditures(In millions)2007

$
580.2


$
145.4


$
434.8


$
20.7


$
11.3


$
9.42006


721.3



191.7



529.6



28.6



16.0



12.62005


691.9



217.5



474.4



4.6



16.2



(11.6
)   Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Considering the Effects of
    Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
 39




---



##### Table of Contents



Fair Value Measurements FAS 157-b FAS 157-b.
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Business Combinations
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K.
  Interest
    Rate Risk
     40




---



##### Table of Contents



Currency
    Exchange Risk
    Inflation
    Item 8.
    Financial
    Statements and Supplementary Data  Consolidated
    Financial Statements
  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A(T).
    Controls
    and Procedures    Evaluation
    of Disclosure Controls and Procedures
   41




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
      Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   42




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K.
  page F-1.
  page F-1.
  Form 10-K page E-1
 43




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Erik
    Olsson   Title:
    Chief Executive Officer and President  POWER OF
    ATTORNEY
  Form 10-K
    Signature

Title

Date/s/  Erik
    OlssonErik
    Olsson

Chief Executive Officer, President and Director (Principal
    Executive Officer)

March 14, 2008/s/  David
    MathiesonDavid
    Mathieson

Chief Financial Officer (Principal Financial and Principal
    Accounting Officer)

March 14, 2008/s/  Denis
    NaydenDenis
    Nayden

Chairman of the Board, Director

March 14, 2008/s/  Timothy
    CollinsTimothy
    Collins

Director

March 14, 2008/s/  Edward
    DardaniEdward
    Dardani

Director

March 14, 2008/s/  Douglas
    KadenDouglas
    Kaden

Director

March 14, 2008/s/  Christopher
    MinnetianChristopher
    Minnetian

Director

March 14, 2008 44




---



##### Table of Contents



Signature

Title

Date/s/  John
    R. MonskyJohn
    R. Monsky

Director

March 14, 2008/s/  James
    OzanneJames
    Ozanne

Director

March 14, 2008/s/  Scott
    SpielvogelScott
    Spielvogel

Director

March 14, 2008/s/  Donald
    WagnerDonald
    Wagner

Director

March 14, 2008/s/  Mark
    CohenMark
    Cohen

Director

March 14, 2008/s/  Donald
    C. RoofDonald
    C. Roof

Director

March 14, 2008  45




---



##### 



INDEX TO
    FINANCIAL STATEMENTS
  RSC
    HOLDINGS INC. AND SUBSIDIARIES
  Form 10-K
   
 PageAudited Consolidated Financial Statements:Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets at December 31,
    2007 and 2006


F-3Consolidated Statements of Income for the years
    ended December 31, 2007, 2006 and 2005


F-4Consolidated Statements of Stockholders
    Deficit and Comprehensive Income for the years ended
    December 31, 2007, 2006 and 2005


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005


F-6Notes to Consolidated Financial Statements


F-7Supplementary Financial Data:The following supplementary financial data of the Registrant and
    its subsidiaries required to be included in Item 15(a)(2)
    of
    Form 10-K
    are listed below:Schedule II  Valuation and
    Qualifying Accounts


S-1     F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm  
        Share-Based
    Payment Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109
  
    F-2




---



##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands,except share data)ASSETSCash and cash equivalents

$
10,039


$
46,188Accounts receivable, net


284,570



268,383Inventory


21,563



18,489Rental equipment, net


1,929,514



1,738,670Property and equipment, net


191,901



170,192Goodwill


925,621



925,621Deferred financing costs


55,660



67,915Other assets


41,469



90,498Total assets

$
3,460,337


$
3,325,956LIABILITIES AND STOCKHOLDERS DEFICITAccounts payable

$
264,384


$
296,086Accrued expenses and other liabilities


179,876



163,996Debt


2,736,225



3,006,426Deferred income taxes


323,950



294,081Total liabilities


3,504,435



3,760,589Commitments and contingenciesStockholders deficitPreferred stock, no par value, (500,000 shares authorized,
    no shares issued and outstanding at December 31, 2007 and
    December 31, 2006)






Common stock, no par value, (300,000,000 shares authorized,
    103,147,575 shares issued and outstanding at
    December 31, 2007 and 90,647,591 shares issued and
    outstanding at December 31, 2006)


820,344



556,482Accumulated deficit


(876,645
)


(999,899
)Accumulated other comprehensive income


12,203



8,784Total stockholders deficit


(44,098
)


(434,633
)Total liabilities and stockholders deficit

$
3,460,337


$
3,325,956    F-3




---



##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF INCOME  Years Ended December 31,2007


2006


2005(In thousands, except per share data)Revenues:Equipment rental revenue

$
1,543,175


$
1,368,712


$
1,140,329Sale of merchandise


80,649



92,524



102,894Sale of used rental equipment


145,358



191,652



217,534Total revenues


1,769,182



1,652,888



1,460,757Cost of revenues:Cost of equipment rentals, excluding depreciation


642,199



591,340



527,208Depreciation rental equipment


295,248



253,379



212,325Cost of merchandise sales


49,304



57,636



69,914Cost of used rental equipment sales


103,076



145,425



173,276Total cost of revenues


1,089,827



1,047,780



982,723Gross profit


679,355



605,108



478,034Operating expenses:Selling, general, and administrative


155,263



134,967



122,281Management fees and Recapitalization expenses


23,000



10,836



Depreciation and amortization non-rental equipment


46,226



38,783



33,776Total operating expenses


224,489



184,586



156,057Operating income


454,866



420,522



321,977Interest expense, net


253,478



116,370



64,280Other income, net


(1,126
)


(311
)


(100
)Income before provision for income taxes


202,514



304,463



257,797Provision for income taxes


79,260



117,941



93,600Net income

$
123,254


$
186,522


$
164,197Preferred dividends






(7,997
)


(15,995
)Net income available for common stockholders

$
123,254


$
178,525


$
148,202Weighted average shares outstanding used in computing net income
    per common share:Basic


98,237



307,845



330,697Diluted


99,632



307,845



330,697Net income per common share:Basic

$
1.25


$
0.58


$
0.45Diluted

$
1.24


$
0.58


$
0.45    F-4




---



##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS
 DEFICIT
    AND COMPREHENSIVE INCOME
  AccumulatedSeries A








New Common








OtherPreferred Stock


Common Stock


Stock


Accumulated


Comprehensive


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Deficit


Income


Income


Total(In thousands, except share data)Balance, January 1, 2005


154


$
350,000



330,697,047


$
1,113,735










$
(808,423
)





$
7,380


$
662,692Components of comprehensive income:Net income


























164,197


$
164,197







164,197Foreign currency translation adjustments






























2,070



2,070



2,070Total comprehensive income





























$
166,267Cash dividends on Series A preferred stock


























(15,995
)










(15,995
)Capital contributions














842























842Balance, December 31, 2005


154



350,000



330,697,047



1,114,577











(660,221
)






9,450



813,806Components of comprehensive income:Net income


























186,522


$
186,522







186,522Foreign currency translation adjustments






























(666
)


(666
)


(666
)Total comprehensive income





























$
185,856Cash dividends on Series A preferred stock


























(7,997
)










(7,997
)Capital contributions














2,909







4,730















7,639Repurchase of shares in connection with the Recapitalization


(154
)


(350,000
)


(317,669,667
)


(1,032,486
)










(518,203
)










(1,900,689
)Issuance of common stock in connection with the Recapitalization










76,633,189



460,000























460,000Exchange of common stock for new common stock










(89,660,569
)


(545,000
)


89,660,569



545,000















Issuance of common stock to management


















987,022



6,440















6,440Share-based compensation






















312















312Balance, December 31, 2006


















90,647,591



556,482



(999,899
)






8,784



(434,633
)Components of comprehensive income:Net income


























123,254


$
123,254







123,254Foreign currency translation adjustments






























12,914



12,914



12,914Change in fair value of derivatives qualifying as cash flow
    hedges, net of tax of $6,071






























(9,495
)


(9,495
)


(9,495
)Total comprehensive income





























$
126,673Capital contributions






















4,500















4,500Issuance of common stock to public


















12,500,000



255,064















255,064Elimination of fractional shares


















(16
)


















Share-based compensation






















4,298















4,298Balance, December 31, 2007





$







$




103,147,575


$
820,344


$
(876,645
)





$
12,203


$
(44,098
)    F-5




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Years Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income

$
123,254


$
186,522


$
164,197Adjustments to reconcile net income to net cash provided by
    operating activities:Bonus expense paid by Atlas






4,730



Depreciation and amortization


341,474



292,162



246,101Amortization of deferred financing costs


13,435



1,001



Share-based compensation expense


4,298



2,061



3,077Gain on sales of rental and non-rental property and equipment,
    net of non-cash writeoffs


(43,284
)


(43,866
)


(45,227
)Deferred income taxes


35,524



48,458



72,212Changes in operating assets and liabilities:Accounts receivable, net


(13,745
)


(22,776
)


(31,065
)Inventory


(2,844
)


412



6,203Other assets


(705
)


414



(3,014
)Accounts payable


(1,414
)


(67,885
)


120,177Accrued expenses and other liabilities


48,947



34,814



26,210Net cash provided by operating activities


504,940



436,047



558,871Cash flows from investing activities:Purchases of rental equipment


(580,194
)


(721,258
)


(691,858
)Purchases of property and equipment


(20,674
)


(28,592
)


(4,641
)Proceeds from sales of rental equipment


145,358



191,652



217,534Proceeds from sales of property and equipment


11,320



15,961



16,197Net cash used in investing activities


(444,190
)


(542,237
)


(462,768
)Cash flows from financing activities:Cash consideration paid to Atlas


(17,995
)


(3,254,921
)


Net cash equity investment by Sponsors






460,000



Issuance of senior ABL facilities






1,124,000



Issuance of senior term facility






1,130,000



Issuance of senior notes






620,000



Proceeds from senior ABL revolver


99,457



4,291



Payments on senior ABL term revolver


(150,274
)






Payments on senior ABL term loan


(2,500
)


(625
)


Payments on Senior Term Facility


(230,700
)






Payments on capital leases and other debt


(39,030
)


(33,010
)


(26,785
)Net proceeds (payments on) affiliated debt






148,301



(56,492
)Deferred financing costs


(842
)


(68,916
)


Proceeds from stock issuances


255,064



6,440



Cash dividends paid






(7,997
)


(15,995
)Capital contributions from Atlas


4,500



2,909



842Increase (decrease) in outstanding checks in excess of cash
    balances


(14,774
)


14,774



Net cash provided by (used in) financing activities


(97,094
)


145,246



(98,430
)Effect of foreign exchange rates on cash


195



(2
)


4,938Net increase (decrease) in cash and cash equivalents


(36,149
)


39,054



2,611Cash and cash equivalents at beginning of year


46,188



7,134



4,523Cash and cash equivalents at end of year

$
10,039


$
46,188


$
7,134Supplemental disclosure of cash flow information:Cash paid for interest

$
218,488


$
33,759


$
20,932Supplemental schedule of non-cash investing and financing
    activities:Purchase of assets under capital lease obligations

$
52,320


$
62,886


$
47,870    F-6




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Organization  Business
    and Basis of Presentation
  Description
    of Business
    Basis of
    Presentation
             F-7




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     (In 000s)Base consideration paid to ACAB

$
3,220,521Working capital adjustment (paid to ACAB in 2006 and 2007)


52,395Total consideration paid to ACAB


3,272,916Repurchase of shares in connection with the Recapitalization


(1,032,486
)Contribution of Series A preferred stock from ACAB to the
    Company


(350,000
)Relief of intercompany debt with affiliate of ACAB


(1,296,246
)Assumption by ACAB of certain liabilities of the Company


(75,981
)Consideration paid to ACAB in excess of book value

$
518,203             Prior to
    the Recapitalization
   F-8




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      (2)
    Summary
    of Significant Accounting Policies  Use of
    Estimates
    Cash
    Equivalents
    Accounts
    Receivable
    December 31,2007


2006(In 000s)Trade receivables

$
281,449


$
270,707Other receivables


11,719



4,654Less allowance for doubtful accounts


(8,598
)


(6,978
)Accounts receivable, net

$
284,570


$
268,383   Rental
    Equipment
   F-9




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        December 31,


December 31,2007


2006(In 000s)Rental equipment

$
2,748,656


$
2,399,109Less accumulated depreciation


(819,142
)


(660,439
)Rental equipment, net

$
1,929,514


$
1,738,670   Property
    and Equipment
      December 31,


December 31,2007


2006(In 000s)Leased equipment

$
215,988


$
190,076Buildings and leasehold improvements


50,621



43,800Non-rental machinery and equipment


37,546



32,529Data processing hardware and purchased software


18,024



13,237Furniture and fixtures


11,022



9,931Construction in progress


4,600



4,183Land and improvements


714



714338,515



294,470Less accumulated depreciation and amortization


(146,614
)


(124,278
)Property and equipment, net

$
191,901


$
170,192   Long-Lived
    Assets and Goodwill
   F-10




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Reserves
    for Claims
    Foreign
    Currency Translation
  Foreign Currency Translation.
 F-11




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   Derivative
    Instruments and Hedging Activities
  Accounting for Derivative Instruments and Hedging
    Activities
  Comprehensive
    Income
  Reporting Comprehensive Income
  Fair
    Value of Financial Instruments
    Revenue
    Recognition
      No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
    Marketing
    and Advertising costs
   F-12




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  No. 02-16, Accounting by a Customer (Including a Reseller) for Certain
    Consideration Received from a Vendor No. 02-16)
  Income
    Taxes
    Accounting for Income Taxes Accounting for Uncertainty in
    Income Taxes
    Consideration
    Received from Vendors
  No. 02-16 No. 02-16
    Share-Based
    Compensation
  Accounting for Certain Transactions involving Stock
    Compensation, an interpretation of APB Opinion No. 25
  Share
    Based Payment.
 F-13




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    New
    Accounting Pronouncements
    Considering the Effects of
    Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
  Value Measurements FAS 157-b FAS 157-b.
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Business Combinations
 F-14




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   (3)
    Earnings
    per Share  Earnings Per Share
    Years ended December 31,2007


2006


2005(In 000s except per share data)Numerator:Net income

$
123,254


$
186,522


$
164,197Less preferred dividends






(7,997
)


(15,995
)Net income available for common stockholders

$
123,254


$
178,525


$
148,202Denominator:Weighted average shares  basic


98,237



307,845



330,697Employee stock options


1,395







Total weighted average shares  diluted


99,632



307,845



330,697Net income per common share  basic

$
1.25


$
0.58


$
0.45Net income per common share  diluted

$
1.24


$
0.58


$
0.45Anti-dilutive securities excluded


473







     (4)
    Accrued
    Expenses and Other Liabilities    December 31,2007


2006(In 000s)Compensation-related accruals

$
34,629


$
28,815Accrued income and other taxes


46,328



74,116Reserves for claims


35,580



35,940Accrued interest payable


41,249



19,095Interest rate swap liability


15,740



Other


6,350



6,030Total

$
179,876


$
163,996  F-15




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (5)
    Debt    December 31,2007


2006(In 000s)Senior ABL revolving credit facility

$
828,000


$
878,291Senior ABL term loan


246,875



249,375Senior Term Facility


899,300



1,130,000Senior Notes


620,000



620,000Capitalized lease obligations


142,007



128,688Other


43



72Total

$
2,736,225


$
3,006,426     2008

$
36,1512009


34,1082010


29,3192011


851,0042012


251,391Thereafter


1,534,252Total

$
2,736,225     (a)
    
    The required principal payments presented above do not give
    effect to the contingent earn-out note discussed in Note 1.  Senior ABL Facilities.
     F-16




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Senior Term Facility.
          Senior Notes. 1 2
    Redemption Period

Price2010


104.750
%2011


102.375
%2012 and thereafter


100.000
%      F-17




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  1 2 1 2
    Contingent earn-out note.
  Capital leases.
    (6)
    Derivative
    Instruments       F-18




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (7)
    Comprehensive
    Income    Foreign Currency


Fair Market Value of


Accumulated OtherTranslation


Cash Flow Hedge


Comprehensive Income(In 000s)Balance at December 31, 2006

$
8,784


$



$
8,784Foreign currency translation


12,914







12,914Change in fair value of cash flow hedges, net of tax






(9,495
)


(9,495
)Balance at December 31, 2007

$
21,698


$
(9,495
)

$
12,203   (8)
    Common
    and Preferred Stock  Common
    Stock
            Preferred
    Stock
   F-19




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (9)
    Income
    Taxes    Year Ended December 31,2007


2006


2005(In 000s)Domestic federal:Current

$
31,661


$
53,412


$
9,899Deferred


31,057



46,428



72,15062,718



99,840



82,049Domestic stateCurrent


5,661



12,722



8,784Deferred


3,132



739



(1,275
)Total domestic


71,511



113,301



89,558Foreign federal:Current


6,413



3,349



2,705Deferred


1,336



1,291



1,337Total foreign


7,749



4,640



4,042$
79,260


$
117,941


$
93,600       Year Ended December 31,2007


2006


2005(In 000s)Computed tax at statutory tax rate

$
70,880


$
106,562


$
90,229Permanent items


793



875



(4,938
)State income taxes, net of federal tax benefit


7,152



12,559



4,881Difference between federal statutory and foreign tax rate


(323
)


(208
)


(61
)Change in valuation allowance










(1,486
)Other


758



(1,847
)


4,975Provision for income taxes

$
79,260


$
117,941


$
93,600  F-20




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Accounting for Income Taxes 
    Special Areas
    December 31,2007


2006(In 000s)Deferred tax assets:Accruals

$
25,845


$
20,080Federal tax benefit of state reserves


1,087



Deferred financing costs (derivative)


6,071



Total deferred tax assets


33,003



20,080Deferred tax liabilities:Intangibles


38,555



29,942Capitalized leases


8,609



7,178Property and equipment


303,326



271,770Foreign


6,463



5,271Total deferred tax liabilities


356,953



314,161Net deferred tax liability

$
323,950


$
294,081      F-21




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        UnrecognizedTax Benefits(In millions)Balance at January 1, 2007

$
40.0Additions based on tax positions related to the current year


4.8Reductions for tax positions related of prior years


(23.0
)Balance at December 31, 2007

$
21.8     (10)
    Commitments
    and Contingencies     F-22




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (11)
    Leases    December 31,2007


2006(In 000s)Leased equipment

$
215,988


$
190,076Less accumulated depreciation and amortization


(71,236
)


(60,088
)Leased equipment

$
144,752


$
129,988         December 31,Capital


OperatingLeases


Leases(In 000s)2008

$
39,278


$
47,1792009


35,740



41,2172010


29,605



33,4922011


22,229



24,9242012


15,470



14,489Thereafter


15,473



11,398Total minimum lease payments

$
157,795


$
172,699Less amount representing interest (4.62% at December 2007)


15,788Capital lease obligations

$
142,007     (12)
    Legal and
    Insurance Matters   F-23




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (13)
    Affiliated
    Company Transactions          (14)
    Employee
    Benefit Plans    No. 97-14, Accounting for Deferred Compensation Arrangements Where
    Amounts Earned Are Held in a Rabbi Trust and Invested
 F-24




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (15)
    Share-Based
    Compensation Plans  Share-Based Payment Accounting for Stock-Based
    Compensation
  Accounting for Stock Appreciation Rights and Other Variable
    Stock Option or Award Plans, an interpretation of APB Opinions
    No. 15 and 25.
  Share
    Appreciation Rights
  SARS were offered each year from 2000 to
    2003.
      Stock
    Incentive Plan
     F-25




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended December 31,2007


2006Expected volatility


40.0
%


45.8
%Dividend yield






Expected term (in years)


4.2



5.0Risk-free interest rate


3.9
%


4.5
%Weighted average grant date fair value of options granted

$
5.19


$
2.98      Weighted-AverageRemaining


AggregateWeighted-Average


Contractual


IntrinsicOptions

Shares


Exercise Price


Term


Value(Years)


(In 000s)Outstanding January 1, 2006


Granted


4,395,921


$
6.52Exercised


Forfeited or expired


Outstanding December 31, 2006


4,395,921



6.52Granted


714,000



13.82Exercised


Forfeited or expired


(206,529
)


6.52Outstanding December 31, 2007


4,903,392



7.58



8.9


$
25,262Exercisable at December 31, 2007


896,049



6.52



8.0



5,403          F-26




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (16)
    Business
    Segment and Geographic Information      Year Ended December 31,2007


2006


2005(In 000s)Revenues from external customers:Domestic

$
1,682,279


$
1,586,714


$
1,411,517Foreign


86,903



66,174



49,240Total

$
1,769,182


$
1,652,888


$
1,460,757     December 31,2007


2006(In 000s)Rental equipment, netDomestic

$
1,838,148


$
1,670,181Foreign


91,366



68,489Total

$
1,929,514


$
1,738,670Property and equipment, netDomestic

$
181,483


$
163,049Foreign


10,418



7,143Total

$
191,901


$
170,192   (17)
    Selected
    Unaudited Quarterly Financial Data  Three Months EndingMarch 31


June 30


September 30


December 31(In 000s, except per share amounts)2007Total revenues

$
406,347


$
442,828


$
461,954


$
458,053Gross profit


142,492



171,940



188,408



176,515Income before provision for income taxes


33,258



28,489



77,952



62,815Net income available for common stockholders


20,243



17,425



47,549



38,037Diluted net income per common share


0.22



0.18



0.45



0.36   F-27




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Three Months EndingMarch 31


June 30


September 30


December 31(In 000s, except per share amounts)2006Total revenues

$
385,891


$
413,822


$
427,599


$
425,576Gross profit


128,309



152,896



166,953



156,950Income before provision for income taxes


64,884



85,817



96,632



57,130Net income available for common stockholders


37,171



49,714



59,603



32,037Diluted net income per common share


0.11



0.15



0.18



0.13    F-28




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##### Table of Contents



RSC
    HOLDINGS INC. AND SUBSIDIARIES
  Schedule II
    Valuation and Qualifying Accounts
    RSC Holdings Inc. and Subsidiaries    2007


2006


2005(In 000s)Beginning balance at January 1,

$
6,978


$
7,474


$
9,166Provision for bad debt


5,653



5,076



5,395Charge offs, net


(4,033
)


(5,572
)


(7,087
)Ending balance at December 31,

$
8,598


$
6,978


$
7,474  S-1




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##### Table of Contents



RSC
    HOLDINGS INC.
  ANNUAL
    REPORT ON
    10-K
  EXHIBIT INDEX
  Exhibit No.

Description of Exhibit2
.1(1)

Recapitalization Agreement, dated as of October 6, 2006, by
    and among by and among Atlas Copco AB, Atlas Copco Finance
    S.à.r.l., Atlas Copco North America Inc., RSC Acquisition
    LLC, RSC Acquisition II LLC, OHCP II RSC, LLC, OHCMP II
    RSC, LLC and OHCP II RSC COI, LLC3
.1(2)

Amended and Restated Certificate of Incorporation of RSC
    Holdings Inc.3
.2(3)

Amended and Restated By-Laws of RSC Holdings Inc.4
.1(4)

Indenture, dated as of November 27, 2006, by and among
    Rental Service Corporation, RSC Holdings III, LLC and Wells
    Fargo Bank, National Association4
.2(5)

Registration Rights Agreement, dated November 27, 2006, by
    and among Rental Service Corporation, RSC Holdings III, LLC,
    Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and
    GE Capital Markets, Inc.4
.3(6)

U.S. Guarantee and Collateral Agreement, dated as of
    November 27, 2006, by and among RSC Holdings II, LLC, RSC
    Holdings III, LLC, Rental Service Corporation and certain
    domestic subsidiaries of RSC Holdings III, LLC that may become
    party thereto from time to time, Deutsche Bank AG, New York
    Branch, as collateral agent and administrative agent4
.4(7)

Canadian Security Agreement, dated as of November 27, 2006,
    by and among Rental Service Corporation of Canada Ltd., Deutsche
    Bank AG, Canada Branch as Canadian collateral agent4
.5(8)

Guarantee and Collateral Agreement, dated as of
    November 27, 2006, by and between RSC Holdings II, LLC, RSC
    Holdings III, LLC, Rental Service Corporation, and certain
    domestic subsidiaries of RSC Holdings III, LLC that may become
    party thereto from time to time and Deutsche Bank AG, New York
    Branch as collateral agent and administrative agent4
.6(9)

Intercreditor Agreement, dated as of November 27, 2006, by
    and among RSC Holdings, II, LLC, RSC Holdings III, LLC,
    Rental Service Corporation, each other grantor from time to time
    party thereto, Deutsche Bank AG, New York Branch as U.S.
    collateral agent under the first-lien loan documents and
    Deutsche Bank AG, New York Branch in its capacity as collateral
    agent under the second-lien loan documents4
.7(10)

Amended and Restated Stockholders Agreement4
.8(11)

Form of stock Certificate10
.1(12)+

Amended and Restated RSC Holdings Stock Incentive Plan Agreement10
.2(13)+

Employee Stock Option Agreements10
.3(14)+

Employee Stock Subscription Agreements10
.4(15)+

Form of Employment Agreement for executive officers10
.5(16)

Indemnification Agreement, dated as of November 27, 2006,
    by and among Atlas Copco North America Inc., Rental Service
    Corporation, RSC Acquisition LLC, RSC Acquisition II LLC,
    OHCP II RSC, LLC, OHCMP OO RSC, LLC, OHCP II RSC COI, LLC,
    Ripplewood Holdings L.L.C., Oak Hill Capital Management and
    Atlas Copco Finance S.à.r.l10
.6(17)

Monitoring Agreement, dated as of November 27, 2006, by and
    among RSC Holdings Inc., Rental Service Corporation, Ripplewood
    Holdings L.L.C. and Oak Hill Capital Management, LLC10
.7(18)

Credit Agreement, dated as of November 27, 2006, by and
    among RSC Holdings II, LLC, RSC Holdings III, LLC, Rental
    Service Corporation, Rental Service Corporation of Canada Ltd.,
    Deutsche Bank AG, New York Branch, Deutsche Bank AG, Canada
    Branch, Citicorp North America, Inc., Bank of America, N.A.,
    LaSalle Business Credit, LLC and Wachovia Capital Finance
    Corporation (Western) E-1




---



##### Table of Contents



Exhibit No.

Description of Exhibit10
.8(19)

Second Lien Term Loan Credit Agreement, dated as of
    November 27, 2006, by and among RSC Holdings II, LLC, RSC
    Holdings III, LLC, Rental Service Corporation, Deutsche Bank AG,
    New York Branch, Citicorp North America, Inc., GE Capital
    markets, Inc., Deutsche Bank Securities Inc., Citigroup Global
    Markets Inc. and General Electric Capital Corporation10
.9(20)+

RSC Holdings Inc. 2007 Annual Incentive Plan10
.10(21)+

Form of Indemnification Agreement10
.11(22)+

Form of Cost Reimbursement Agreement10
.12(23)+

Form of Director Restricted Stock Unit Agreement10
.13(24)

Executive Employment and Non competition Agreement by and
    between David Mathieson and RSC Holdings Inc. effective
    January 2, 200810
.14(25)

Separation and Release Agreement by and between Keith Sawottke
    and RSC Holdings Inc., dated November 30, 200712*


Computation of Consolidated Ratio of Earnings to Fixed Charges
    for the five years ended December 31, 200721
.1*

List of Subsidiaries23
.1*

Consent of KPMG LLP, Independent Registered Public Accounting
    Firm31
.1*

Certification of Chief Executive Officer as required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended31
.2*

Certification of Chief Financial Officer as required by
    Rule 13a-14(a)
    of the Securities Exchange Act of 1934, as amended32
.1*

Certifications of Chief Executive Officer and Chief Financial
    Officer as required by
    Rule 13a-14(b)
    of the Securities Exchange Act of 1934, as amended     +
    
    Compensation plans or arrangements in which directors or
    executive officers are eligible to participate*
    
    Filed Herewith(1)
    
    Incorporated by reference to Exhibit 2.1 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(2)
    
    Incorporated by reference to Exhibit 3.1 to RSC Holdings
    Inc.s Quarterly Report on
    Form 10-Q,
    dated August 2, 2007 (file
    no. 001-33485)(3)
    
    Incorporated by reference to Exhibit 3.2 to RSC Holdings
    Inc.s Quarterly Report on
    Form 10-Q,
    dated August 2, 2007 (file
    no. 001-33485)(4)
    
    Incorporated by reference to Exhibit 4.1 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(5)
    
    Incorporated by reference to Exhibit 4.2 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(6)
    
    Incorporated by reference to Exhibit 4.5 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(7)
    
    Incorporated by reference to Exhibit 4.6 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(8)
    
    Incorporated by reference to Exhibit 4.7 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(9)
    
    Incorporated by reference to Exhibit 4.8 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(10)
    
    Incorporated by reference to Exhibit 4.7 to RSC Equipment
    Rental Inc.s and RSC Holdings III, LLCs
    Form S-4,
    dated July 16, 2007 (file no.
    333-144625)(11)
    
    Incorporated by reference to Exhibit 4.10 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644) E-2




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##### Table of Contents



(12)
    
    Incorporated by reference to Exhibit 10.2 to RSC Equipment
    Rental Inc.s and RSC Holdings III, LLCs
    Form S-4,
    dated July 16, 2007 (file no.
    333-144625)(13)
    
    Incorporated by reference to Exhibit 10.2 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(14)
    
    Incorporated by reference to Exhibit 10.3 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(15)
    
    Incorporated by reference to Exhibit 10.4 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(16)
    
    Incorporated by reference to Exhibit 10.5 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(17)
    
    Incorporated by reference to Exhibit 10.6 to RSC Holdings
    Inc.s
    Form S-1,
    dated February 13, 2007 (file
    no. 333-140644)(18)
    
    Incorporated by reference to Exhibit 10.7 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated March 27, 2007 (file
    no. 333-140644)(19)
    
    Incorporated by reference to Exhibit 10.8 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated March 27, 2007 (file
    no. 333-140644)(20)
    
    Incorporated by reference to Exhibit 10.9 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated April 18, 2007 (file
    no. 333-140644)(21)
    
    Incorporated by reference to Exhibit 10.10 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated May 21, 2007 (file
    no. 333-140644)(22)
    
    Incorporated by reference to Exhibit 10.11 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated May 21, 2007 (file
    no. 333-140644)(23)
    
    Incorporated by reference to Exhibit 10.12 to RSC Holdings
    Inc.s
    Form S-1/A,
    dated May 21, 2007 (file
    no. 333-140644)(24)
    
    Incorporated by reference to Exhibit 10.1 to RSC Holdings
    Inc.s Current Report on
    8-K, dated
    November 27, 2007 (file
    no. 001-33485)(25)
    
    Incorporated by reference to Exhibit 10.2 to RSC Holdings
    Inc.s Current Report on
    8-K, dated
    November 27, 2007 (file
    no. 001-33485) E-3