Good afternoon. My name is Jennifer and I will be your conference operator today. At this time, I would like to welcome everyone to the RSC Holdings fourth quarter and full year 2008 results conference call. (Operator Instructions) Thank you. Mr. Gould, you may begin your conference.

Thanks, Jennifer. Good evening, everybody. Welcome to the RSC Holdings fourth quarter and full year results conference call. Joining me today from the company are Erik Olsson, President and Chief Executive Officer, and David Mathieson, Sr. Vice President and Chief Financial Officer. We published our fourth quarter and full year 2008 results and provided 2009 guidance in a press release we issued about one hour ago. There’s also a slide presentation that accompanies this earnings call. The press release, as well as the webcast, and its accompanying slide presentation, and any non-GAAP reconciliation tables that are warranted can all accessed on our website at rscrental.com in the Investor’s 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. If you please turn to slide number two. Before the presentation and the 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 company's outlook are dynamic and subject to change and therefore this outlook and all the other information mentioned today speak only as of today and RSC does not intend to update this information to reflect future events or circumstances. RSC encourages you to read the risks and uncertainties discussed in the company's annual report on form 10-K for the year ended December 31, 2008 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's fourth quarter and full year 2008 earnings call. As usual, I will go over some highlights of the quarter and David will then talk in more detail about our financials. I will also talk about our outlook for 2009 and we will end with Q&A. 2008 was a difficult year to start with and it deteriorated further towards the end with the onset of a global recession and turmoil in the financial markets. The total impact of which is still unfolding as we are more than halfway through the first quarter. We have responded swiftly in preparing for a really tough 2009 and believe our business model works as designed to generate significant levels of cash flow. Turning to slide number three, and before we get to the numbers, let me remind you how the model works and how we run the business in good times and in bad. To deliver outstanding customer service and free cash flow generation. The key elements of our model are a commitment to providing customers superior service through a decentralized organization and reliable access to one of the youngest, safest, and most diverse fleets in the industry. A strong and practiced business discipline apply to pricing, demand driven CapEx, balancing of fleet and a dedication to operating with optimal efficiency. The diverse customer base covering both the nonresidential construction and increasingly important, the industrial or non-construction markets. And finally, the broad international presence, which enabled us to redeploy our fleet to areas of highest customer demand, helping us maximize fleet utilization and returns. Turning now to the fourth quarter and full year 2008, we’ll begin on slide number four. Managing rental business, particularly in an environment like we face today and saw in the…

Thank you, Erik, and good evening, everyone. Let’s go to slide number eight, starting with the onset of the onset of the downturn in the fourth quarter, our volume growth slowed year-over-year in each of the four consecutive quarters. In the quarter, it decline 4.8% including on our acquisition. In line with our strategy to protect profit margins and maintain our pricing discipline, we took the necessary actions that Erik talked about of our volume growth at the expense of pricing. Year-over-year rates were down 2.1% in the quarter, keeping the full year decline to a very respectable 1.1% in a very competitive market. Our objective has continued to manage fleet levels and rates very tightly on a daily basis and focus on value selling and service as opposed to price competition and thereby protect profit margins. Slide number nine, merchandise revenues were down 17% in the fourth quarter, attributable to marketplace slowdown and also to stores we’ve consolidated or closed. The sales were unchanged in the fourth quarter from the prior year level and down 14% year-to-date as we elected to preserve fleets in order to minimize capital expenditures until late in the year. Used equipment margins of 23% were solid in the business environment and demand for used equipment also remain solid. Margins in rental were down 660 basis points as compared to the same quarter in 2007. It’s important to note that the prior year quarter closely followed the peak of the nonresidential construction market and our results were still strong. By comparison, this year’s fourth quarter had the sudden late quarter revenue decline as discussed. Continuing to slide ten, SG&A 10% of total revenues, up 50 basis points from the prior year quarter, but down in total dollars. For the full year, SG&A was at 9.6%…

Thank you, David. Before we go to Q&A, I want to update you on our outlook. In our press release today, we announced that we will not provide earnings guidance for the full year 2009. We will, however, provide quarterly outlooks on revenues, adjusted EBITDA, and free cash flow, as well as an outlook range for annual free cash flow, as we believe this is a key metric for understanding and evaluating our performance. We will also provide forward-looking, directional information concerning the macro conditions affecting the business, the strength of used equipment markets, expected capital expenditure levels, and other pertinent information that is useful from time-to-time. Please turn to slide number sixteen and let me start by commenting on our two main end markets. Nonresidential construction activity has turned down sharply and we anticipate this trend to continue as consensus third party estimates predict more than a 20% drop in nonresidential construction activity for the year and we’re seeing this kind of trend in our first quarter nonresidential rental activity. Industrial activity has declined as well, but to a lesser extent. We expect that our focus on industrial markets will help to somewhat mediate the broader decline in nonresidential construction. In addition, we anticipate that the recently enacted stimulus bill will be beneficial to construction markets, but the timing and potential impact on a state-by-state level are not known at this time. Our team is facing the current environment by adhering to the guiding principals of our business model and our focus remains on cash generation, utilization, rental rates, and profit margins. We are taking decisive action to address the difficult market conditions, including further location closures, reducing headcount and SG&A expenses, and limiting capital expenditures. These cost reduction efforts, which began in 2008 and continue to be implemented in the first quarter 2009, are expected to generate an excess of $100 million dollars of savings in 2009. As a result, the company is targeting free cash flow for 2009 between $320 and $350 million dollars and it is expected that the free cash flow will be used to further reduce debt. For the first quarter, we expect rental revenues to be the range of $285 to $295 million. Demand for used equipment is expected to remain solid for us, due to the young age and high quality of our fleet, although margins will decline further as supply is greater than demand. We expect $345 to $355 million of total revenues, down about 17% from last year and resulting adjusted EBITDA of $100 to $110 million, including an estimated $7 million dollars related to location closures and headcount reductions. We expect free cash flow to be in the $65 to $75 million range, more than $100 million dollars better than in the first quarter of 2008. 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 Adrian Colby - Deutsche Bank.

It looks like in the fourth quarter your industrial revenues grew in excess of 20% in terms of the share revenues. That’s pretty impressive change in one quarter. I was hoping you could provide some color on how you achieved that.

We have been very successful in growing our industrial revenues and there really are three factors playing in that we now can say that our industrial revenues are 50% of our total revenues. One, as I said, we’ve been very successful in securing new accounts and growing with industrial customers. The construction, a weak end on a relative basis, helping to push that up to 50%. Finally, we have been conservative previously when we talked 35% revenues coming from industrial, giving the difficulty in identifying customers. What we did during 2008, we put a more accurate reporting system in place to give us the confidence to be more specific. So now we can confidently say that 50% of our business is really industrial and non-construction.

Have you changed the number of sales force that are dedicated just to the industrial side?

Yes we have. We have continued to add to a dedicated industrial sales force.

Your next question comes from Christina Woo - Solee Securities.

Just a follow up on some of Adrian’s questions regarding the industrial market. I’m wondering if you could comment on how pricing specifically is holding up and also give us background on how often you negotiate those contracts.

Yes. We’ve actually done quite well on pricing on industrial markets and pricing positive in that segment for the quarter and year.

Does the pricing change dynamically with each rental?

We typically sign a longer term contract with customers - one, two, three year contracts and with fixed pricing in many cases.

So as some of those contracts are coming up for renewal, are you finding that you’re getting push back on any pricing, even keeping pricing stable or increases?

During 2008, we were actually successful in moving many of those prices up, thanks to the great service that we provide to these accounts. Now in the environment that we and overall economy is in, we’re getting more push back and more discussions about pricing also with these customers.

Thanks for offering guidance. I was wondering if you could comment with regard to the first quarter earnings guidance, whether you’re expecting more weakness in revenues being attributable to volume or price and also how many store closures and openings you’re forecasting for the first quarter.

We expect price pressure to continue in Q1 and so it’s a combination of price and volume, obviously volume being by far the biggest component in that. We expect to close between 10 and 12 locations in Q1.

Any expectations to open new locations?

We expect to open 5 to 8, mainly industrial business.

Your next question comes from Philip Volpicelli from Goldman Sachs.

What are the underlying assumptions in terms of the percent of price decline, utilization rates, and possible volume decline? Are you guys willing to give us some more color there?

No, I think we are disclosing as much as we’re comfortable with at this point.

In terms of the used market, it went from 28 to 23. As you look at your $320 to $350 forecast for free cash flow, what kind of margin assumptions are you making there for used equipment?

We’re expecting margins to decline, but still be positive, Philip.

When we look geographically around the country, are there certain markets that are holding up better than others?

Yes. I think we see the weak markets definitely got weaker in the fourth quarter and the strong markets is still doing quite well. The competitive pressure has been building in those markets.

Florida, California, Nevada?

And Arizona, yes. Much worse in fourth quarter.

You mentioned there was some cancellations in the fourth quarter, are you seeing more cancellations as you go through the first quarter or has that subsided?

I think it actually has subsided. I mean this is somewhat subjected, but when we talk to our field, I think what we’re seeing is not so much cancellations, it’s more that there are no projects starting up.

In terms of peaking equipment and it being sold overseas, have you seen any market change in that?

Again, we’ve been talking to people in the industry and they have seen still strong foreign demand here in January and February. Maybe a little bit more biased to what’s left in America as opposed to Europe or Middle East in the past, but still good demand coming form overseas customers.

Next question comes from Emily Shanks of Lehman Brothers.

This is actually Jason Traheo in for Emily. Just to follow up on Philip’s question on used equipment sales, what channels are you filling through? Is it primarily the auctions?

No. We try to minimize the auction channel and I think in the fourth quarter we had three quarters of retail or 70% or so through retail and 30% auctions. We try to do as much as we can through our own locations.

As far as the retail sales to, are those buyers typically domestic or any foreign buyers come in and buy from the retail channel?

For us, it’s typically local buyers. In some cases, we sell retail to brokers and they may in turn take it overseas, but we don’t see that.

Just generally, are you seeing noticeable increased competition on the industrial end?

I think we see some of that, not a significant change from the past really, but it’s always been competitive, but I wouldn’t say that we’ve seen a marked change in that.

Your next question comes from Scott Schneeberger.

Erik, what do you anticipate for the seasonal upswing at this point? It’s a pretty low margin implied by the mid points at 36% for the first quarter. Do you expect that to be the watermark for the year?

I think that the first quarter is always the toughest quarter in any year. In addition to what must be the worst quarter from an economy point of view in decades. We have the seasonality of course. So we’re not suggesting that one should extrapolate the first quarter for the full year. Now how much seasonality and uptake we will see, we obviously have not provided or not provide as a forecast, but like I said, I think there’s always seasonality in the first quarter and we have been working on $100 million dollars of cost savings and estimate that 90% or so of those savings will fall into second, third, and fourth quarter.

Is it mostly actions that you took at the end of fourth quarter to get that $100 million of savings or still a lot more to be done and when will those actions be completed?

The bulk of these actions through the end of February actually.

With four ex a little bit less mix from Canada, how should we think about the tax rate going forward?

We will believe we can get [%], if that helps.

Obviously a lot of uncertainty with the stimulus, but with what’s been put out there publicly, what areas do you feel would benefit the most?

We have to understand what types of projects get funded, etc., but it’s been a lot of talk around highway construction, for example, and that’s an area where maybe only a quarter of 25% or so of equipment in use there is addressable by our equipment. The highway contractors tend to use much larger equipment than we have and they all typically tend to own that equipment, but for the rest in those package, it should be applicable to our fleets. We just have to wait and see and we are positioning ourselves to take advantage of this, if and when projects are released.

The next question comes from Manish Zumaya with Citigroup.

Can you give us some sense if this is happening? As it pertains to the seasonal pickup, typically what we do is a pickup in activity from January into February and then going into March. Can you give us some sense if that is happening?

I think what have put out as a guidance today reflects our views after two-thirds of this quarter and we don’t want to get into more details.

Used equipment prices, I think some industry sources have an outline that used equipment prices fell anywhere from 5% to 8% in the fourth quarter and obviously the last two or three weeks we have had pretty big auctions. Can you give us a sense of what the pricing action was at those two big auctions?

We did not participate on any big scale in either one of those auctions and we try to try to minimize our exposure to that channel, but what we hear is that pricing actually was stable to up from December levels at these auctions.

Are you thinking about selling more through the auction houses as perhaps capital financing. From the buyer’s perspective, might be difficult to attain. Is that something that you’re thinking at this point?

I think we will. Like we said, 70% or so, we’ve done retail and I think we’re going to try to continue to keep such a mix and be little bit more opportunistic on the auction channel. So we don’t see a need at this point in time to push any more through that channel.

In terms of free cash flow, the $320 to $350, I mean obviously I appreciate the fact that visibility is tough and you don’t really want to get into earnings guidance, but can you at least outline for us. What should we be thinking in maintenance CapEx, growth CapEx, cash taxes. How should we be thinking about that in 09?

We won’t give cash and net CapEx guidance. Included in the press release, we talked about net CapEx for the first quarter to be in the range of $25 to $30 million dollars.

Is it fair to say that the proceeds from used equipment in 09 will be more or significantly more than the $125 that you generated from that activity in 08?

That would be a good assumption.

Are you comfortable with the liquidity?

It’s held up. I would say it’s held up better than expected.

The next question comes from Henry Kern with UBS.

I wondered if it’s possible to talk a little bit of the categories of equipment within your fleet, strongest and weakest within your portfolio I guess by utilization or pricing?

I think what we have seen in the fourth quarter was a general drop in demands across all fleet categories. So I wouldn’t single out any category over the other and same thing with pricing. Now I’m talking about our realized price and not necessarily what’s happening in the marketplace.

As far as the competitive landscape, could you talk a little about how your price today versus your large national competitors and whether those large competitors are maintaining some form of discipline?

We try to always achieve a price premium over the competition or try to be the highest priced player and it’s not necessarily so we’ll always succeed in doing that, but it’s definitely part of our strategy. We see intense price competition for most of 2008, but it accelerated in the fourth quarter as demand decreased and we continue to see that in the first quarter here. I think everyone is participating. We’re trying to hold back as best as we can, but it’s getting very, very tough out there and we see everybody really discounting at significant levels. Regional players maybe even more than the national players.

Do you think there’s any chance as we go through this downturn that your contractor customers might be incentivized to rent as opposed to buy because of capital financing issues?

Absolutely. I think there’s great opportunities for us as markets pick up that they will turn to renting equipment as opposed to borrowing money or financing equipment purchases through leases or other means.

Have you seen evidence of that yet?

I think it’s too early to tell. I think right now everybody is back paddling from the slower demand.

We don’t see it in the numbers yet, Henry, but certainly that’s the feedback that we’ve been getting from them.

Your next question comes from Paul Mumola - Sidoti and Co.

Where does that $100 million dollars in savings hit? Is it the majority in cost of goods sold?

Majority is cost of rental.

Would it be fair to say $35 to $40 million SG&A run rate is about correct?

No individual line items here.

Have you seen price discounting from any of your equipment suppliers?

I think that obviously we’re not buying much, so but we have seen an increased willingness to discuss price if we were to buy anything.

Your next question comes from Joel Tisk - Buckingham Research.

Interest expense in 2009, can you give us any help?

I think 7%, I think is reasonable.

About $185 - $190 million?

Maybe not as much as that.

DNA estimates in 2009?

I’ve gone far enough, Joel.

What about the age of the fleet?

We would expect that to age to the low 40’s.

Where did you end up in 2008?

33 months.

Where did the EBITDA have to drop to to reach the covenant, the four and a half times?

Under 500, or less, 475.

Your next question comes from Vance Elfin with Morgan Stanley.

In terms of plan to use free cash flow to reduce debt. What do you consider would be the optimal debt level at this point and do you think you can achieve that in the coming quarters and sort of a related question, would you consider doing share buybacks with the stock at these levels as sort of an alternative use of the free cash flow.

We have said in the past that we evaluate alternatives for cash flow. We’re always evaluating that with the board. I would say the current thinking is revolver, but we’ll continue to evaluate it.

When you provide the full year outlook, does that assume any stimulus impact and do you have any personal feel for when it might kick in given all the necessary steps that we’re aware of, ahead of getting shovels in the ground?

The way we look at it now and this is obviously evolving and changing, but we believe that any impact on us would be late in the year and relatively small.

Your next question comes from Chris Doherty with Oppenheimer.

What is the restricted payment basket currently? What’s your ability to actually pay down bonds or stock?

It’s $50 million in the first year. $75 million cumulatively.

Can you give us what the NOLV percentage of OEC was in your latest appraisal?

We don’t like to get into that much detail. Obviously it came down as we expected as we age our fleet.

Erik, you’ve talked about in the past in terms of a target around 70% in that you would manage your fleet around that. Is that still the case?

I think we are at the point in this rapid and sharp downturn where it would not be prudent to try to deflate down to get to those utilization levels. We will be selective and somewhat restrictive in our used equipment sales in order to not hurt margins or fire sale good equipment that we have on hand and it will take a couple of quarters to really balance and right size the fleets to get to the utilization levels where we want to be. So we will run below those levels for the next couple of quarters.

If you look at where the non-res numbers have come out, they sort of look like they peaked around December, but when you look at some of the AWP type of equipment and that tends to be the late cycle, is there more of a drop coming Q2 versus Q1 taking out seasonality or do you think Q1 could be the bottom?

Again, the reason that we’re not giving annual guidance or any other guidance is we don’t want to get into speculate when things will turn better or worse. I think the non-res numbers that are reported by the U.S. bureau is we don’t really trust them at this point. They seem to be significantly inflated. I think those will be revised downwards and we have seen a lot of this decline already.

And the next question comes from Sundar V. - Deutsche Bank

In terms of your oil, when do you measure the liquidation value again?

Probably the end of June, applied in July.

In terms of payment terms from your customers, I did notice that your DSO was up slightly in the quarter. Are you seeing any kind of difficulty in getting payments? Any trends there?

You’re right to say it’s gone up a bit, but I’m actually pleased, in this environment.

So nothing in terms of bad debts or any write-offs? Any sense of magnitude in how much it was up by in the fourth quarter?

Debt levels have been very small, relatively speaking.

In terms of the other side of the payables, last year it was pretty big use. How should we think about this in 09, given that you’re going to be reducing CapEx in 2009 compared to 2008. Should we expect that be of further use or do you think you’ve the reached the levels where you can kind of keep it pretty flat?

Well, I think even more. I think it’ll go down more. $50 million instead of $150 million. We did a significant shift in 2008, which is why we’re not buying much right now. I believe it’ll drop, but it’ll be in the $50 million range, not the $150 million.

That was our last question. Mr. Olson, do you have any closing remarks?

Thank you. Just to summarize, on slide 17, we have put a tough year behind us, but we performed well with rental revenue growth of 1.6% and adjusted EBITDA margin of 43.5% and generating $221 million of free cash flow. Our free cash flow capabilities are very strong and are proving that business model indeed works as designed and our balance sheet is strong with ample liquidity. We are in some tough market conditions, but we have been and will continue to be confronting this by sticking to the basics of our business model on a day-to-day basis in each of our locations. Currently and looking forward we continue to focus on rental rates, utilization, profit margins, and cash flow and this will remain our areas of focus. Of course, we continue to adapt our cost structure and continue to raise the bar of lower performing stores. Our non-construction or industrial business has been growing and now make up more than half of our revenues, which is a significant strength in this environment. We believe our flexible business model strategy will deliver industry-leading results at any point in the cycle and create shareholder value. We appreciate your interest and support. Thank you very much and have a great evening. Operator, that concludes today’s call.

This concludes today's conference call. You may now disconnect.