Good evening, my name is [Katherine] and I will be your conference operator today. At this time I would like to welcome everyone to the RSC Holdings third quarter 2008 Results Conference Call. (Operator Instructions). Thank you Mr. Gould you may begin your conference.

Thank you, Katherine, good evening everybody. Welcome to the RSC Holdings third quarter 2008 conference call. Joining me today from the company are Erik Olsson, President and Chief Executive Officer, David Mathieson, Senior Vice President and Chief Financial Officer. We published our third quarter results and updated our '08 guidance in a press release issued approximately an hour ago. The results of our third quarter results slide presentation that accompanies this earnings call, the press release as well as the webcast, and the accompanying slide presentation, any non-GAAP reconciliation tables that are warranted can all be accessed on the RSC Holdings website at www.rscrental.com in the investors section under the about us tab. This conference is being recorded for replay purposes. If you have any questions after the call please call me. Please turn to slide two. Before the presentation and comments begin RSC would like to alert you that some of the comments such as the company's outlook and responses to your questions include forward-looking statements. As such, they are based on certain assumptions of future events and are subject to a number of risks and uncertainties that may not prove to be accurate. Actual future results may vary materially. In addition, the factors underlying the companies look are dynamic and subject to change, and therefore this outlook and all the other information mentioned today speak only as of today. RSC does not intend to update this information to reflect future events or circumstances. RSC encourages you to read risks and uncertainties discussed in the company's annual report on form 10-K for the year 2007 and our other SEC filings. I will now turn the call over to Erik Olsson.

Thank you Gerry, good afternoon and welcome everyone to RSC third quarter 2008 earnings call. I will go over some highlights of the quarter and David will then talk in more detail about financials. I will also talk about our outlook for 2008 and we will end with a Q&A. It has been a wild ride in the financial market and in the global economy over the last several weeks, the impact in which is still unfolding. However, through this period our business has remained healthy and we have been preparing for a soft 2009 all year long. So we believe we are well positioned to face the difficult times ahead of us. Turning now to the third quarter and beginning on slide number three, we were more than just satisfied. We were quite pleased with our performance in the third quarter given the worsening economic environment. We delivered same store rental revenue growth for 1.8 % while maintaining our rental rates essentially flat on a sequential basis from the second quarter. Profit margins were strong with adjusted EBITDA of 44.1 % and free cash flow results which we will discuss in greater detail surpassing our expectations reaching $94 million. Each day and at each of our locations we are managing the business with a laser focus on customer service. We are delivering and picking up on time, performing high levels of preventive maintenance on one of the youngest fleets in the industry, and emphasizing safety first. In addition to enabling us to take market share this focus on customer service is yielding high profit margins and generating free cash flow. Our success is the result of a disciplined organization focused on the proven RSC business model. Turning to slide number four, the third quarter performance demonstrates the strengths and…

Thank you, Erik, and good evening everyone. I would like to spend the next few minutes going over some additional details. First go to slide 11 for a moment and you can see clearly that volumes have been slowing down for a number of quarters. In the current quarter rental volumes increased 2.7% including currency and the acquisition. As a result of our disciplined approach to pricing, sequential rates were essentially flat in the quarter keeping the year-over-year decline to a very respectable 1% in a very competitive market. As we have stated before, our clear objective is to continue to manage rates very tightly on a daily basis and focus on value selling and service as opposed to price competition and thereby protect profits margin. Moving to slide 12, merchandise revenues were down 5% due to closed stores and a softer market. Used equipment sales were down 4% as planned and down 19% year-to-date as we want to preserve fleets in order to minimize capital expenditures going forward. These equipment margins continue to be strong and demand for our used equipment remains solid. Our fleet age at the end of the quarter was 31 months. This gives us tremendous flexibility going forward and having managed CapEx investments. Margins on rental were down as compared to 2007 as the final year quarter includes the peak of the non-residential construction market and accordingly results were very strong. And secondly, the current year stock offer costs included higher depreciation on our larger fleet rental equipment, and $6 million of higher fuel costs, which we are starting to recover with sub charges. Finally, $3.3 million of store closing and severance costs. Volumes and merchandise were down somewhat because we closed 29 stores so far this year and margins were impacted by mix and…

Thank you, David. Before we go to Q&A I want to update you on our outlook for 2008. Please advance to slide number 19. Our full year outlook of rental revenue growth is that it will approximate 4% around the mid-point of the 3% to 5% we previously indicated. Adjusted EBITDA is still sitting in the range of $790 to $810 million and diluted earnings per share $1.27 to $1.39 consistent with previous estimates. The good news is that we expect approximately $20 to $30 million more of free cash flow than we last estimated and we should be in the range of $190 to $210 million range for 2008. We are very pleased with this level of free cash generation considering the fact that we're downshifting from a period of high expansion and, therefore, expect to reduce our accounts payable another $50 million in Q4. This means that the underlying run rate of free cash flow in 2008 is projected to be well over $350 million, in line with what we saw on a quarterly basis in Q3. Recent macroeconomic events are pointing to further weakening in the markets. We saw the magnitude of which remains to be seen as we enter 2009, however, we are confident in our ability to quickly react and adapt to the conditions as they appear and continue to demonstrate industry leading performance at all times. Within this environment and in line with our strategy, we will continue to prioritize rate stability over volume resulting in slightly lower rental revenues than would otherwise be achieved producing meaningful higher free cash flows. We are adhering to our strategy of reducing CapEx in order to maximize cash flow and profit margins. We will continue to consolidate or close locations and we will continue to open new locations in attractive markets with, of course, a continued bias toward industrial or non-contraction opportunities. To summarize, on slide number 20 the challenges for our industry are apparent and are upon us. In fact, we have been in a gradual slowdown since the end of 2007. We have been and we will continue to confront this by sticking to the basics of the RSC business model on a day-to-day basis in each of our branch locations. Our focus in on best in class, customer service, rental rates, high utilization, profit margins, and free cash flow in combination with a highly flexible and proactive business model including our geographic reach, balance fleet mix, and growing non-construction or industrial business we believe we are well prepared and positioned for these difficult times. With that I would like to turn the call over to the operator for instructions on the Q&A.

(Operator Instructions) Your first question comes from Vance Edelson - Morgan Stanley.

Congrats on the quarter. How would you say pricing discipline is at your peers throughout the industry? What are you seeing on the frontlines? Are they matching your discipline or are you seeing any deterioration there?

Vance, I think everybody is certainly trying as much as possible to maintain pricing discipline and there are local issues where we can some irrational behavior, but overall we think the industry is holding up pretty well.

Okay, got it and since opening and closing stores is expensive and it weighs on margins can you look forward and tell us when you might reach a more stable level or just going out over the next three months would you expect we'll see fewer openings and closings or are we going to see more, or will it be a lot like what we saw this past quarter?

I think we had a very high level in the third quarter, as we said, both in closings as well as openings. It's fair to assume there will be some more closings and there will be also some more openings.

Okay and just one more for you. With the EBITDA margin down a little what are your views on where margins might trough out in this cycle? Do you think we're getting close to what might be the bottom which would presumably be quite a bit higher than the last cycle based on changes over the years? Where do you think we are in that regard?

I think it's clear that we don’t see this going anywhere near the trough levels of the last downturn. We are a completely different company today and have a completely different cost structure and business model and flexibility. It's too early for me to call out where we are in this cycle and where it will bottom, but like I said we don’t see this ever going close to the levels of the last one.

Your next question comes from Philip Volpicelli - Goldman Sachs.

Just want to talk a little bit about used equipment pricing and your fleet age target. How is used equipment pricing holding up? Are you seeing any pockets of weakness regionally? And then your fleet age was at 31 months how old are you comfortable aging the fleet to?

These equivalent margins are holding up pretty well. We don’t see any significant softness anywhere. Margins in the third quarter were very 30%$, so we're pretty solid. Based an aging point of of view we peaked out in the last downturn at something like 43 months without any issues there, Philip. So, we've got considerable flexibility in front of us.

Okay, should I by that measure the 11 million of growth CapEx was that for the new locations or was just that spread across the entire network?

Well we did have growth in the quarter. We had same store growth and it's from that.

With the free cash flow you're generating can you give us a list of priorities? Is it making acquisitions, debt repurchases, whether stock or bank debt, or equity repurchase?

Well, I think our priorities are to pay down debts and to from an operating point is to pay down debt and also look for acquisitions, very strategic, highly complementary and rightly priced and I think the example of American fits that mold perfectly. So, for the rest our board is to continuing to evaluate other alternatives and if and when they choose to do something, I guess we will announce it at that time.

But right now equity repurchases is off the table.

Like I said, our board is evaluating different alternatives, so we'll leave it up to them to announce what or if there will be anything done.

Your next question comes from Adrienne Colby - Deutsche Bank.

I was wondering if you could give us any more color on the branches that you closed in the quarter and the areas that you are opening new branches. I know you probably can't give the specifics but just in general terms?

Well, I'll give you an example as Erik talked about on the call actually. We closed non-residential branches in Ontario and one in Langley and western Canada. We put the fleet on trucks and we shipped it to Alberta where we have a very strong business in the oil plant. The other thing, Adrienne, we do is we look at stores that don't have enough cost of capital and we ask them for a plan. Do they have a credible plan to recover the cost of capital in the medium term and if they don't, then we make the long-term decision opening and closing stores. So we're using that as a way to screen what we do close.

I think last year you applied for a permit to apply for government type of work and I was wondering if you could comment on any type of government work you're doing currently or what kind of opportunity you see there.

It's clearly a big opportunity and its part of our non-contraction activities that we are gearing up to find our way into the purchasers or buyers in the government sector. So it is one of the growth avenues we're going down, and it's not a major contributor to our revenues yet, but it may well be as we get more accustomed to that segment.

Would it be fair to assume it's less than 1% of your revenue?

At this point yes.

Your next question comes from line of Emily Shanks - Barclays Capital.

I just have a couple of follow-up questions. Around the residual values, I think you had mentioned that there had been some pressure on pricing. Can you speak to what that magnitude is? Secondly, if there have been any significant options in the market where you've actually seen the ticket printed at those levels.

Well we haven't seen the pressure on pricing that you're talking about, Emily. Our margins held up 10%, the same as last year. So this year is pretty strong margins. Evaluate each store and either the bulk or the vast majority of our used equipment we sell ourselves to our own stores, so we're not seeing that pressure you're talking about

Apologies if I misunderstood. As we think about the fleet age, thank you for the information regarding the last cycle, how should we think about the cadence of that aging? For instance, do you have set plans for where you want the age to be over the next three months, six months, twelve months?

Not really. The fleet age is not a target in itself for us. It's a function of where we are in the cycle, what the growth is, what we think the prudent thing is to do. The more we tear back on CapEx the quicker the fleet will age if you like. That's not the bad thing; we think that's the right thing to do now. So we will stay very flexible with market conditions and let the fleet age develop as it will, and like David said we have considerable room to age the fleet in response to the market development.

And then just one final question, in terms of the sequential debt reduction that took place, was that all in your ADL or did you pay down any of your term loan and/or bonds during the quarter?

It's all in the ADL.

Your next question comes from David Manthey - Robert Baird.

First question, as you de-fleet and age the fleet out, have we seen the peak in D&A this quarter?

Yes, I think so. I think that's a good point David, because we are now going into our slower season. Normal seasonalities will begin to de-fleet and will continue to de-fleet in the fourth quarter as well.

And on the GP coming in a little bit lighter than we thought, I understand a few of the issues you've mentioned here, in terms of industrial mix, the fuel prices, moving inventory around and opening and closing locations. Beyond those four things I just mentioned, is there anything else that we should think about relative to GP this quarter?

No, I think you've captured the main ones, David.

And then the final question this is more anecdotal than anything, have you heard anything from the field about customer's inability to procure their own credit line renting more frequently than buying equipment? Or maybe you're seeing some new customers that historically had purchased their own equipment, renting, sort of accelerating the trend towards rentals? Is that something you've heard from the field or is that too far on the margin?

I think it's just a tad too early for us to pick up on that. I think there's something to be said that in times of economic uncertainty there is a propensity to ramp more and obviously this go around if credit also is scarce, there should be good opportunities for us to pick up new customers, but it's still too early to tell.

Your next question comes from Christina Woo – Soleil Securities.

A number of your competitors have talked about trying to increase their revenue mix into the industrial segment, and I'm wondering as you bid for new non-construction work, are you running up against more competition, especially now that the construction market has softened further?

No we're not.

That's simple. I was wondering if you could also provide some input on the mobile tool rooms, if you could speak about the margins, if they're similar to the margins in your core equipment rentals business, and if you could also discuss the seasonality and cyclicality with the tool rooms?

The tool room has less of cyclicality, or seasonality I should say as it more follows the industrial business pattern and are used throughout the year. The returns are very good, very, very strong. Margins marginally lower than the average margin for the company, but like I said the returns from the assets are much stronger.

I would also say that business is like cyclical too, because you're really tapping into maintenance budget, Christina, which in itself is less cyclical.

Following up on some of the pricing discussions, for the third quarter United Rentals results reflected rental declines of 3.4%, and yet Hertz today announced that they are starting to implement price increases of 5% to 10%. I'm just curious if over the last few days you've noticed any shift in pricing reflecting Hertz's announcement and if you think that the industry has right sized its fleet enough to get some pricing momentum?

We have not noted any difference in the marketplace in the last couple of days, no.

I do believe though the industry is de-fleeting. We are told of competition are closing stores just the same way we are, so I do believe the industry is doing the right thing.

One last question having to do with your fleet age, you've talked a bit about it and the utilization rates. With you aging the fleet in order to save some CapEx, when do you expect you'll have to start investing meaningful amounts of CapEx into the fleets? Is it when you reach that 40 month mark or at some other point?

Ideally we've said that on a going concern basis we'd like to keep our fleet in the mid-30s or so, but if the market conditions are warrant, we can move up to 40, or we were even at 43 months in the last downturn for a quarter or two. So it really will depend on market conditions when we will start to invest in the fleet again.

So we could even potentially see something in fleets in the fourth quarter of '09 if you really cut back on your CapEx?

Potentially, I haven't done the math so I don't want to say a specific month, but yes.

Your next question comes from Scott Schneeberger - Oppenheimer.

On the used equipment sales margin, still over 30%, how long with all this de-fleeting that you guys believe has been occurring, how much longer can that stay as elevated as it is?

In the last downturn Scott, we were still making margins. I think the bottom that it dropped out at something like 18%, so. Scott, as far as we see the market remains healthy and as I said before, we sell 70% to 80% of that are sales to our customers. Our customers realize that we have a very well-maintained fleet, so we don't have any major concerns about the used equipment market.

Historically in slowdown or downturn for the market, the demand for old used equipment drops off or goes away. But like David says, we're selling middle-aged, well-kept, well-maintained equipment and historically there's always been a good demand for that.

In merchandise sales, a bit of a slide in the margin in the quarter, was that just because of a bit lower revenue or is there any shift of what you're offering there?

The mix changed somewhat to more new equipment in terms of the merchandise. So the mix changed somewhat and did increase in moving around merchandise, closing older stores, opening new stores, so we had I'd say unusual activity in that quarter. I wouldn't expect that to continue.

So margin going forward, probably a little higher than what we saw in the third quarter.

Yes.

And then you guys mentioned you shut down in Toronto and moved up to the oil sands, still all within Canada, but a zero FX impact in the quarter and that had been a positive tailwind in past quarters. Do you anticipate in this fourth quarter it's a headwind? I know it's hard to guess what FOREX will be beyond, but into October and what you've seen will that be any type of a headwind?

If it is, it will be very small. We have 5% of our business in Canada, so it's a very small piece of our business.

And could you repeat the tax rate guidance? I had missed that.

Yes, we expect rates to come down slightly. Canadian rates are coming down and some of the state rates for us are coming down. So we would expect a tax rate going forward of between 78.5% to say 79%, maybe somewhere in the middle.

Was the impact of the hurricane in third quarter a material impact, and can you quantify any impact you think you might benefit from going forward?

It wasn't material enough to call out. It was negative, but it will be positive for us in the fourth quarter net and net-net it will be positive for us.

Not good for the people unfortunately, but it's good for the business.

Your next question comes from Paul Mammola – Sidoti & Company

First, given that you narrowed your revenue expectations for the year, there's still a range in EPS though, so I was wondering is there a variable cost or is it rates that you're not sure of on the quarter, maybe that's why you're leaving the range there?

Yes, we wanted to narrow the revenue range. There is still variability to that, mainly looking at December and when does the winter come on, so there is still a little bit of a [whale] count there.

Good enough, and then on SG&A, can you give us a sense in order of magnitude, what had the most inflating or adverse affect on that account?

Well a public company costs, followed by the 110 cost, and then developing. We are below 10% for SG&A. We're still investing in the business. We are happier where we are on SG&A, having SG&A under 10% is pretty good.

If I could just follow up on a previous question, would you say it's accurate that you haven't seen customer problems related to financing so far in October, is that correct?

So far no. I mean on the line totally we have seen things be canceled, but some we can't see it in the way things are progressing in October.

Your next question comes from Henry Kirn - UBS.

Question on the metrics that you've looked at as you try to judge the future health of the industrial business, what do you view as the key drivers and what do you look to say, okay things are going to stay strong, or maybe we should be more concerned in cutting back in that business?

Well we don't ramp for their production of goods or wares. We ramp for their maintenance and turnaround repair needs. So slowdown inactivity can to some extent be good business for us. For example, we have had several turnarounds in the petrochemical industry that were all on schedule for the third quarter, being postponed into first quarter and next year as the refineries were busy producing oil at $100 plus prices, as well as being mandatory to produce gasoline after the hurricane. So we believe we're going to have a strong business there next year. And for the rest, I think we just stay very close to our business. We track our utilization every day. Also, on the industrial side we work closely with many of these industrial customers and partake in their planning for expansion and maintenance and so forth. So we have a pretty good picture of what's going on there.

Okay, and if you look at new equipment pricing from the low end, have you started to see any discounting that would incentivize you'd use to pump up your orders ahead of time?

No, I think we have not seen that from any supplier so we think that's a good thing obviously, we the suppliers learned hopefully the lesson the last go around, and I think more importantly the rental companies learned the lesson as well.

Is it possible to talk about the categories of equipment that are strongest and weakest within your portfolio either by rental rate or by utilization?

We manage each product category in our fleet individually, so we sell what we don't need and we buy what we need. So we are fairly satisfied with the utilization across all our product categories. We have continued to buy less dirt equipment. Dirt has now shrunk to 16% of our total fleet, coming down from being 21%, 22% of the fleet a couple of years ago, but the dirt that we have is highly – it's nice, and at a good rate.

You started to de-fleet from the aerial side as well?

No.

Your next question comes from Yilma Abebe – JP Morgan.

If you compare the pace of the slowdown in the second quarter of this year versus the third quarter of this year and actually going into the fourth quarter, how would you characterize it, about the same, accelerating, decelerating?

We see the fourth quarter this year is actually very similar to the third quarter. We've already talked about we have a fairly substantial industrial business and we've got some shutdowns put out from the – to the fourth quarter and the first quarter next year. We've got a slight negative in the third quarter with the high teens which gives us a positive in the fourth. So we see the fourth at this point very similar in growth to the third.

My second question is regarding acquisitions, in this slowdown are you seeing more assets becoming available at attractive prices in the marketplace?

I think we've seen a marginal uptick in activity, but not in attractive prices. I think there's still a little bit of a valuation gap between what current owners believe their businesses are worth and what we think, and I think it will take another quarter or two for that to adjust.

Your next question comes from Sundar Varadarajan – Deutsche Bank

Most of my questions have been answered, but just kind of from an outlook perspective given that you're three-quarters into the year, where do you think non-residential construction shapes out for '08 versus '07, and as you think about '09, any color on what you think kind of macro trends are going to be in '09, and what kind of year-over-year changes are you guys planning for in terms of the overall non-residential construction?

I think over the year we'll have grown in non-residential business.

I'm talking about the overall kind of the market.

You have to look at real growth. The non-residential numbers that the government puts out there's a lot of inflation in those nominal growth rates, so I believe 2008 will be less than half of what 2007 was in terms of real non-residential growth. It's too early to say what 2009 will be. These things are unfolding and changing on a daily basis, so up and down I would say.

Your next question comes from Chris Doherty - Oppenheimer.

One, can you just confirm that the severance store closing cost is 4.4. Is that what you said total?

Yes.

In terms of your pricing, how is that actually calculated? Is that mix adjusted, is that new contract or is that just affective billed rates?

Its mix adjusted. It's calculated for each product category separately and it's calculated for daily, weekly, and monthly rates separately. So we mix up both product and rental contract mix from the calculation.

But that is actual realized rates not a sort of new billed rate?

No, it's realized. It's within our billed revenue.

And also, what was the OEC of the American acquisition?

$30 million

Would that be considered sort of a small or average or large acquisition relative to what you're looking at going forward?

I'd say average.

Your follow-up question comes from Philip Volpicelli – Goldman Sachs

Just wanted to get, if you guys have done an audit recently on the fleet and what the sort of the liquidation value is.

We do that twice a year, Phillip. Last time we did it was in June, we'll do it again in December.

Okay, so it's a pretty interim period for your borrowing base you just use an estimate of what it was during the last period?

Yes.

And then I calculate $1.00 utilization rate, about 58% in the third quarter. Does that tie with what you guys are calculating?

Again, when we do our ROI, we call it ROI, we exclude ancillary revenues and just use pure rental revenues, and I don't believe you have that number, but our number would be slightly lower.

In that general ballpark and slightly up year-over-year?

Yes, like I said we don't do that particular calculation so can't comment on it. Follow up on it afterwards.

Mr. Olsson, do you have any closing remarks?

Well, thank you all for joining us today on our third quarter 2008 earnings call. We have put another strong quarter behind us with rental revenue growth of 1.7%, and then adjusted EBIDTA margin of 44.1%. Business environment is tough and we're clearly in the midst of a construction market downturn. But we're growing our company over and above the underlying market demonstrating strong execution of our business model, the disciplined pricing, lowered CapEx, and producing solid results. Our underlying free cash flow generating capabilities are very strong and we've proven that our business model indeed works as designed. Looking forward, we will continue to adhere to our strategy of focusing on rental rates, high utilization, profit margins and cash flow, and of course we will continue adapting our cost structure, as great companies do, and we will continue to raise the bar for lower performing stores. We believe our flexible RSC business model and strategy will deliver industry leading results at any point in the cycle and create shareholder value. We look forward to reporting back to you next quarter with our full year business results. We appreciate your interest and support, so thank you all very much and have a great evening.

This concludes today's RSC Holding's third quarter 2008 results conference call.