Welcome to the United Rentals Second Quarter 2009 investor call. (Operator Instructions). I would now like to turn the call over to Mr. Kneeland.

Thanks, Operator. Good morning everyone, and thank you for joining us today. With me is Bill Plummer, our Chief Financial Officer, and other members of our senior management team. Bill will discuss our current capital structure and review our financial results with you. But first, I want to spend some time on our environment in operations, including the initiatives that led us to increase our targets for free cash flow and SG&A savings for the year. As we reported last night, we now believe our free cash flow will be about $325 million, instead of the $300 million we had originally projected. We also expect to reduce our SG&A expense by $80 million to $90 million, which is about $40 million more than our original estimate. Now both of these metrics reflect our ability to manage our business with discipline and purpose in a challenging environment. Now as you will hear from us today, our second quarter story is one of sequential progress on key operational metrics in a market that is still declining, and that includes rates. But I also want to make it clear right up front that we're not satisfied with our current rate performance, even given the severity of this downturn. There are things that we can do to move our rates in the right direction and we're doing them, and I'll talk more about rates in a minute. This construction cycle is more severe than any in recent history, but it will run its course. We have made a conscious decision to manage the company through the recession by balancing short-term and long-term goals. At the corporate level, we are pursuing a strategy of long-term profitability that is based on customer service leadership and shifting our customer mix towards larger, more profitable accounts. At the…

I do want to touch on the second quarter financial results, but before I get there I'd like to go back and update everyone on where we are against the outlook that we've been updating throughout the course of the year. I'd also like to spend a little time on our capital structure and liquidity position. Maybe I can add a little bit more detail on the fleet management activities over the quarter and then we will end up with the financial results. So on the outlook, we gave three targets, SG&A reduction, net rental CapEx, and free cash flow at the beginning of the year and we've been updating them as we've gone along. Mike noted that we've actually raised the target on SG&A up to $80 to $90 million reduction from our previous target of $50 to $60 million reduction, and that was up from the initial target we gave at the beginning of the year of $40 to $50 million reduction. We raised this target because we put a lot of effort into identifying ways to save on SG&A, and we're starting to see benefits of all that effort. We're seeing it in just about every line of SG&A, salaries, benefits, T&E, professional fees, advertising, anything that is part of that total SG&A we are looking at and we've got initiatives around to try and drive further reductions as we go forward. And as I said we've got more visibility, and we've got more confidence and that led us to raise the target to that $80 to $90 million level. On net rental CapEx, we're sticking with the target that we laid out originally for net zero for net rental CapEx over the course of the year. We are about zero in the quarter, $84 million of…

(Operator Instructions) Our first question comes from Henry Kirn – UBS. Henry Kirn – UBS : Wondering if you could chat a little bit about your ability to age the fleet from here? How far would you be willing to age it and what categories could you age further than others?

That's a great question Henry. We've always said the optimum range would be 35 to 45 months. Clearly right now, we're at 40.1. We could conceivably go beyond 45; it's not beyond the realm. If you look at the current average age today of the industry, it's currently at 44 and a few points above and beyond that. And as you know, we continue to refurb our equipment and as we refurb we don't re-purpose our asset, we keep it at the original age. But if you were to do that, obviously our age would come down about three months.

If I could add, the equipment age is not physics. It's not like there's a step age at which the equipment – the average portfolio age starts to really negatively impact us. It does have an impact on our R&M expense. That's something that we watch and manage actively. But we feel very comfortable that we've got flexibility to manage age to significantly longer ages than we set at right now. And indeed we can go beyond the 45 months that we've talked about as sort of an optimal top end of the range, as Mike said. How much further beyond, we'd have to trade that off against what are the pressures driving us to age the equipment further.

And Henry, one other point on that I think as the industry goes forward you'll continue to see the age of the fleets inside our industry continue to age out. Henry Kirn – UBS : That's helpful. And as you look at the pockets of relative strength could you talk a little more about where within your portfolio you're stating the pockets? And maybe aside from Canada, which regions are stronger than others?

Sure. If you take a look at the Gulf area, Texas is a large state for us. We're seeing continuous – let me just step back for a moment and say that the economy's touching all of our regions. But where we're seeing lesser amount of decline and some pockets of opportunity would be in Texas, eastern Canada as well, still within the Northeast corridor there's still a volume of work that's on the books that still needs to be yet closed out. Where we're seeing the weakness obviously remains in California, Arizona, Nevada and also in Florida. By the way, if you take California and Florida that's where we have a large population and a large portion of our business as well.

Our next question comes from Scott Schneeberger – Oppenheimer & Co. Scott Schneeberger – Oppenheimer & Co: Could we start out on the seasonality of the business? We saw the uptake but obviously macro is a strong driver as well. How should we think about third quarter? Should we anticipate the typically seasonal up tick or is it going to be offset by macro this year?

Well right now we're seeing the seasonal up tick. I think it's too early to tell with the macro, it'll play out towards the tail end of the quarter. If you take a look at the ABI index a year ago clearly towards the tail end of the third quarter you start to see it decline. We haven't seen that play out yet so it's yet to be determined. And that's the best scenario that we could just lay out between now and then. Scott Schneeberger – Oppenheimer & Co: Okay, fair enough. On pricing – I'm back a page on my notes I don't recall what you had said. But I heard something about pilots with the new software. Can you just take us a little deeper into the progress there as well of the timeline as when you hope to finish?

Sure. As you know, at the last quarterly call I talked about that we've engaged a company to work with us to put a software program in to manage rates – to effectively manage rates and we're going to shift away from just setting rates to more dynamic pricing. As part of that progress in the second quarter we rolled out 92 locations or pilot throughout North America where we have automated the setting of rates based on logic that we have built. It'll take a lot of different things into consideration like asset, time and achievable rates that are in the marketplace. So we're rolling that pilot forward. As we go into the fourth quarter we would then start shifting towards piloting the dynamic pricing with the opportunity to – our objective is by the first quarter of next year, in January to roll out a more dynamic pricing model. And then the last phase would play out to more the national accounts and industrial accounts for just doing price fitting. So that we can take and look at these prices, long-term contracts and look at how we can determine the profitability in yield on those. So that's kind of the timeline. We do have the 92 out there;; it's marching forward, too early to give you the results. As we go into the third quarter – the third quarter call we'll be deep into it so I'll be able to give you more details. Scott Schneeberger – Oppenheimer & Co: And then with the margin on used equipment sales swinging negative – and you do have a big chunk of your free cash flow guidance already satisfied through half the year. But how should we think about your aggressiveness with selling used fleet now, given the fact that it looks like pricing is pretty tough in that market?

Sure. Let me just say that when we went into this year, we had a basis of what we thought we wanted to sell full year. As we went through the second quarter and I've mentioned on previous calls that there are specific products that we saw weakness in, in particular, 19-foot scissors and some aerial equipment. They're related more towards retail where I think there's an overcapacity. When we take a look and march that out against the work that we see and the age of the equipment we determined that we wanted to de-fleet specific categories of equipment inside of our aerial fleet. We also do a financial analysis as well on those assets to look at the return in cash flow that we would get. When we started to see – as we went through first and second quarter we didn't see our pricing in those products improve. In fact, we saw them weaken. So we took the liberty of and consciously moved those forward. So we moved those sales forward in the second quarter. It was a record sales for us. To give you the order of magnitude, we sold roughly 5,000 aerial pieces in the second quarter, which is a record and a large number by any stretch of the imagination. As a result we had to go through the auctions but it was a conscious decision that we made. We didn't see the pricing improving as time went on, on these older assets. Scott Schneeberger – Oppenheimer & Co: So should we anticipate big lump sales again? Obviously through the auction channel where you're going to get lesser economics or was that a one-time deal and you think it's going to be a little more steady through the end of the year?

I think it's yet to be determined. I think that as we go through and determine what the primary market will tell us, and what our customer demand will be, we'll make those decision as we go forward. We're not prepared to say right today that we've got something that we're going to put out to auction or to extend our auction the order of magnitude that we did before. But it's one of the levers that we have at our disposal. And we're not afraid to use it.

Yes, Scott, I'd only add the fact that we accelerated into the first half, gives us some more flexibility as we look at whatever the market delivers to us in the second half. So that's good to have in our pocket, but as Mike said, were going to continue to monitor and make decisions based on where the market is, where pricing is, what we see the volume capacity for the market as being and what we think might happen as the end of the year comes closer.

Thank you, our next question comes from Manish Somaiya – Citi. Manish Somaiya – Citi: Good morning everyone. A couple of questions, one just the state on the used equipment market. I guess one think I'm trying to figure out is, do you get the sense that the used equipment market will remain liquid as it has been for the last two or three quarters, or with all the excess capacity what is your likelihood that the used equipment market freezes up?

Well, I think it's very liquid. I think it really comes down to price, Manish. The auction market is a lever we can pull and, obviously, I just explained we are not afraid to use it. But there is still a retail sector that we do retail fleet, and we are retailing our fleet and prices there have been resilient in comparison but just not to the order of magnitude. You're right. There is an overcapacity within our industry, and it really determines how much is pushed through at one given moment. It's fair to say that prices have come down because of the overcapacity and the willingness for companies to put more into the auction arena. But the auctions itself, to me, is still, and has been, and I see as the foreseeable future, a conduit that will still remain open. Manish Somaiya – Citi: Okay, and secondly as a follow-up, how do you guys think about balancing between selling more equipment versus just parking the equipment for the next upturn?

We've been actually discussing that notion quite a lot over the last month or two among ourselves and with our board, and we've done some analysis to try to get at what the right strategy for a piece of equipment. Do you rent it? Do you sell it? We haven't gone through as detailed analysis the notion of, you just sit on it for some period of time, but that's the next iteration. In looking at rent versus sell, we've modeled scenarios over various time periods, under various assumptions about what you realize from sale and what you'd be able to rent it out for in a rent scenario, and that's guided thinking about how we're selling equipment and how we might sell equipment in the second half. We'll continue to do that analysis. As I said, we haven't gotten to that level of detail on the notion of, I'm going to sit on it and wait until things get better at some point in the future. That strategy introduces even more variables around when might the market come back and what might rental rates look like at that time? And we just haven't gotten to that point in analysis. Manish Somaiya – Citi: Okay, and then just lastly, Bill, since I have you, how much did you guys end up paying for Leasco?

We haven't disclosed that. That amount. It's a $14 million revenue company. We're going to stay away from disclosing the price right now.

Our next question comes from Emily Shanks – Barclays Capital. Emily Shanks – Barclays Capital: Hi. Good morning guys. Thanks for all the detail around the aerial equipment that you sold. Just as a follow up question. If you had excluded those 5,000 pieces, would the margins still have been negative?

We didn't do the math that way. We can certainly take it offline and take a look at it, but we didn't break it apart that way. We'll have to come back to you on that. Emily Shanks – Barclays Capital: Okay, great and then maybe as a follow-up, and if we have to take that offline that's fine as well, but I was just curious what the average age of that aerial fleet that was sold was?

The average age of the fleet that we sold in general was 78 months. So it is safe to say that aerial is one of the oldest assets. Emily Shanks – Barclays Capital: But that's no different than any point during the cycle, correct?

Well, we have been attempting, actually been very good from a fleet management standpoint, of selling our oldest assets first as opposed to the newer assets, so we didn't break down the average age by categories of sold. We just take it as an average overall. Emily Shanks – Barclays Capital: And then just generally, I know that obviously pricing is down and you're implementing this new software, I was just curious how you view your competitors on pricing? Do you view them as being rational, or are you seeing aggressive strategies? What's your take on that environment?

I always get that question and it's a difficult one to answer because there are some companies that are doing some good things and some companies that are rational. We always try not to point fingers, but the reality of it is the industry, there's companies that are landlocked, that are desperate. There are companies that are trying to enter new markets, and as a result the only way they do that is lower rates. I think there is still some irrational pricing going on out there. In particular companies that are striving to try to find a way, or carve a way, to make it through this down cycle. The larger companies have the ability to sell fleet, move fleet and go to other markets. One of the things that we do do, because we always get the question on rental rates, as I stated in my opening comments, our rates – there are no comparable for rates with inside the industry and it's been an open discussion with the American Rental Association. But one of the things that we do do is we kind of go out and we do some online shopping and try and do some comparisons, based on certain categories of equipment to kind of get a market check to where things are. And on balance we are either at or on balance with most of the competitors out there. So we use that as a check and balance. Again, I am not happy where we are. And we have – we need definitive actions, ideas, process management discussions to improve rental rates. And this industry needs to know, we've got to get an ample return for the capital that we have, whether you're large or small.

Our next question comes from Philip Paselli – Cantor Fitzgerald. Philip Paselli – Cantor Fitzgerald: I am trying to figure out the actual cash movement with regard to the refinancing and the debt pay down you did. If we kind of draw a line below the senior notes, because I understand the 6.5 have a very large negative restrictive payments basket. There was about $129 million paid down some notes, converts, 14 and [inaudible]. Where did that cash come from? And second question would be how much cash is sitting at URI, Inc. versus URI,NA?

The where did the cash come from is that we have, because of the negative restricted payments basket, we have to use cash that is available to URI, United Rentals, Inc. That cash capacity, let's call it, sits up at URI and it is available to us to do essentially anything that we want or need to do with and that's the cash that we used to repurchase the 7.75 QIPs and other subordinated pieces. At the end of the second quarter, that cash capacity was $116 million of that the URI level. So that's the capacity that we have up there after the second quarter after those purchases. And we continue to manage that cash capacity with the notion that it is the way that we have for buying pieces of debt below the senior level in our capital structure. Does that make sense? Philip Paselli – Cantor Fitzgerald: That makes total sense. So when I am looking at the balance sheet, the 125 number, that's the cash United Rentals, North America or is it only the difference between the 116 and the 125, at North America?

It's the consolidated cash position. It is primarily cash that is held by URNA, the operating entity, and actually most of that cash is resident in Canada, for more detail than you asked for, but it's primarily URNA cash. The one thing I should add Phil, as you think about URI's cash capacity, don't think about it as cash that's sitting on the balance sheet. URI's cash when URI has cash, what we do is we take that cash and make an inter-company loan down to URNA so that URNA can then reduce its ABL balance. That's allowed and pulling that cash back up to URI, when URI needs it, is also allowed even with the negative restricted payments basket. Philip Paselli – Cantor Fitzgerald: And then when you guys were talking about the June and July sequential I guess is month over month increases of rental rates, do you have a sense for the rates in the utilization, what those numbers would be year over year? Are we still down 14% year over year or is that percentage year over year declining with the monthly increase in rental rates in June and July?

I would still be down on a year over year basis but you know we're measuring it sequentially from month to month, kind of showing the progress of where we started after the first quarter going into April, May, and June, and then into July taking the actions that we've taken. Yes it'll still be on year over year, looking at a month versus the prior year's same month. It's still going to be down in the 12%, 13% area. I don't have the exact numbers Phil, but it's still going to be done year over year, but up sequentially as we said. Philip Paselli – Cantor Fitzgerald: And is that showing an improvement that year over year month versus month comparison is that showing an improvement?

It is, a slight improvement, and hopefully as we get later in the year the comps will get easier, right, as you start to see some declines last year on rates through each month, so hopefully it'll get a little better, but it's a little bit better in July than it was in the second quarter months. Philip Paselli – Cantor Fitzgerald: Great, and in terms of your industrial business versus your I guess regular commercial or non residential construction business, the rates of decline that you saw there are in terms of total revenue, do you see a material out performance of the industrial business? Can you give us some numbers around that?

We're not talking about that level of detail with numbers. I think it's fair to say that we still believe industrial represents a good opportunity for us. That's why we're focused on that customer group. That's why we made the acquisition, and we'll continue to drive to invest in the areas that offer us the best opportunities. Philip Paselli – Cantor Fitzgerald: Okay, so is it safe to say Bill, that there's less volatility in that business than there is in just normal non [industry]?

Yes, that's a part of why we're attracted to it.

Yes, absolutely it's a longer term play typically to contracts Phil, anywhere between one to three years in duration, and you know there's less volatility in the pricing but that being said our industrial customers are feeling it just like everybody else and they're putting off projects but they will have to come back on line. Philip Paselli – Cantor Fitzgerald: A last question, if I calculate correctly, your OEC at the end of the quarter was 3.795, is that correct?

I don't have the exact number at the quarter.

Chris, can you answer that question?

At 3.794.

Our next question comes from Chris Doherty – Oppenheimer & Co Chris Doherty – Oppenheimer & Co: Following up on two themes, one, just the used equipment market, if you look at the realized price versus the OEC sold, it looks like prices realization went to 31% from 36.4% last quarter. Is that a change in market prices or is it a change in mix, i.e. the fact that the average age of the fleet that you sold is 78 months.

Chris it would be both. It would be both, the mix that you put out there, the type of products that you have, and also the amount that we put through, and also having more at auction versus any other format that we have available to us. Chris Doherty – Oppenheimer & Co: You think that used equipment prices in general are declining?

I think that used prices are yes, under pressure to decline as I mentioned earlier it would have been niche, you still have a lot of companies that are trying to de-fleet, and are going to go through this. So I think for some period of time they will be under pressure. Having said that, I think that as we start seeing some of the sting less, you may see some categories begin to improve such as earthmoving equipment first, and then we'll progress forward. Chris Doherty – Oppenheimer & Co: And Bill, define, I guess, could you talk a little bit about your philosophy in terms of optimizing the balance sheet. I mean one, I just want to clarify, you said that you had $116 million of availability. I wonder if that's sort of an inter-quarter period, because if you look at your balance sheet there was actually the amount due to the parent was $170 million. What's the difference between the $170 million and the $116 million?

Okay, my apologies so I'll correct my previous number. If you look in our guarantor statements on note eight in the queue that we filed under the parent column you'll see the intercompany receivable and that number is $170, not $116 – shouldn't do this on the fly, so again, my apologies. So, $170 million is the amount of cash capacity that we have available at URI, at the end of the second quarter. Chris ask me your question again, or did that answer it? Chris Doherty – Oppenheimer & Co: No, that was sort of – I wanted clarifying goes to sort of your philosophy in terms of managing the balance sheet with possible re-purchases. If you look at your liquidity just under the revolver you have about $760 million of availability, which if you look at the largest your fleet has been recently, it's like $4.4 billion, just under, and now you're at $3.8 billion, $3.9 billion. That tells you that you probably have enough liquidity to ramp back up when the market comes down. So would your philosophy be to use whatever excess capacity or whatever excess cash flow you have right now to pay down debt at a discount?

Certainly our philosophy is using pre-cash flow currently to pay down debt. Whether we do it at a discount or not will just depend on the ebb and flow of what's available, where's the liquidity, what are the yields available to us. Certainly we'd prefer buying components of our capital structure at a discount. In order to do that, as I described with Phil's question, we have to use the discounted pieces of our capital structure are primarily the subordinated pieces, and so in order to buy those we would have to use part of that $170 million of cash capacity at URI. We want to manage that prudently. We want to make sure that we've got the ability to have some dry powder to buy subordinated pieces of our capital structure over time. So we've got to keep an eye on that cash capacity number as we buy discounted pieces, but certainly buying discounted or buying even pieces of our capital structure that are near par is part of our strategy for deploying free cash flow. Chris Doherty – Oppenheimer & Co: Basically what you're saying – not to put words in your mouth, but as a former treasurer type person, you would be looking at possibly calling 14 versus maybe buying 7.75 if the yield was sort of more on the 14 just because it makes sense to buy higher cost debt.

That would be the mind set. You know the question then would be, does doing either make sense relative to other opportunities that we have. I know I'm not giving you a hard and fast answer but that's really how we think about it is, what is the range of opportunities that we have, what do we get when we buy a given piece, and what do we give to do it. So we may decide you know what, I'd love to buy either 7, or 7.75, or 14s, but I still want to knock down that 2012 maturity of 6.50. I may want to buy some of those, or you know what, I want to build a little bit more liquidity because I think there's a roaring recovery coming so I want to pay down some ABL. We've got to factor in all of those business considerations as well as just sort of the pure market/treasury considerations that may be natural for myself or [Irene], our treasurer.

Thank you. This does conclude the question and answer session for today's program. I'd like to turn the program back to Michael Kneeland.

Thanks operator, and I want to thank all of you for joining us this morning and participating in the call. As always we are available to speak with you from Greenwich and to continue the dialog. I also encourage all of you to look at our updated investor relations presentation which can be downloaded from our site. So this concludes our remarks for today and operator you can now end the call. Thank you and have a great day.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.