Good morning, ladies and gentlemen, and welcome to the United Rentals, Fourth Quarter and Full Year 2007 Investor Conference Call. Please be advised that this call is being recorded and is copyrighted by United Rentals Inc. Before we begin, the Company has asked me to remind you that many of the comments made on today's call and some of the responses to your questions will contain forward-looking statements. United Rental's business and operations are subject to a variety of risks and uncertainties, any of which are beyond its control and consequently actual results may differ materially from those projected by any such forward-looking statements. A summary of these uncertainties is included in the Safe Harbor statement contained in the company's fourth quarter and full year 2007 earnings release. For a fuller description of these and other possible uncertainties, please refer to the company's annual report on form 10-K for the year ended December 31st 2007, as well as to the subsequent filings with the SEC. You can access the company's press releases as well as its SEC filings on the company's web site at www.unitedrentals.com using the link captioned access Investor Relations. Please note that United Rentals has no obligation and makes no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances, or changes in expectations. During the conference call, references will be made to free cash flow and the EBITDA, each of which is a non-GAAP term. Speaking today for United Rentals is; Michael Kneeland, Chief Executive Officer; and Marty Welch, Chief Financial Officer. I will now turn the call over to Mr. Kneeland. Mr. Kneeland, you may begin.

Thank you, operator. Good morning, everyone, and thank you for joining us today. With me is Marty Welch, our Chief Financial Officer and other members of senior management team. Now I will open the call today with two words, focus and plan. These two words are the heart of our message. They are the driving force behind the solid numbers we reported last night. Marty will go over the results with you in a minute, but first I'd like to pull back the curtain and full look at the powerful plan behind the results. Our strategy gets equal billing with our results today because we believe our record EPS for 2007, and our record EBITDA are just a beginning of what we can achieve. Last month on our guidance call, I spoke briefly about the strategic plan we initiated last June. Essentially we did a complete recalibration of the business to take the emphasis of top line growth and we place it with an overwriting objective of achieving profitable growth. It really was a fresh start for our company. Our new strategy calls for stringent cost controls, more profitable management of our equipment fleet, and a refocus on our core equipment rental business. This is absolutely the right strategy for our company. Equipment rental is what we do best, it is and always has been a high margin business for us. It's where we have numerous competitive advantages, including serving more than 900,000 customers each year. It's an important point because we are in a repeat business, where customer retention is key. Our employees know that they have to earn their business everyday and show our customers why we are better option on every rental. In 2007, 93% of our rental revenues came from existing customers. This year, I think…

Thank you Michael and good morning everyone. Michael has discussed some of our highlights for this year, as well as the new strategy we put in place. This strategy which includes an intense focus on our core business of equipment rentals, more profitable management of our rental fleet and continued execution of our cost containment initiatives, contributed to our record fourth quarter and full year EPS and EBITDA performance in 2007. Looking forward to 2008, we expect the continued execution of this strategy to deliver another strong year. Now, I will discuss our results for the quarter and full year and review our outlook for 2008. Before I get into the details, let me say that my remarks this morning exclude the benefit related to the $100 million we received following the recent termination of our merger agreement with Cerberus. We are pleased with our progress on several fronts, which are focus areas for our business and yardsticks we use to objectively assess our effectiveness in executing our new strategy and delivering on our target to generate 500 million in incremental annual EBITDA within five years. First, equipment rentals, rental revenue increased 4.1% for the fourth quarter and 4% for the full year 2007, as improved time utilization on a larger fleet more than offset rental rate declines. For the full year, time utilization improved 250 basis points to a record 64%. Additionally, same store rental revenues increased 3.7% for the fourth quarter and 3.1% for the full year. Looking forward to 2008, we expect time utilization to improve another 200 basis points, again more than offsetting an expected 1% decline in rental rates. Second, SG&A, our SG&A rate improved 80 basis points to 16.2% for the fourth quarter and 90 basis points to 15.9% for the full year 2007.…

Thank you very much sir. [Operator Instructions] Our first question or comment is from the line of Christina Woo with Morgan Stanley. Your line is open.

Thanks. Thanks so much for adding the color that you did on the call. I was wondering with regard to pricing you are expecting pricing to be down 1% year-over-year, why take the pricing decline instead of just adjusting your fleet mix to tighten the fleet a bit more and keep pricing at least constant if not up a bit?

Christina, this is Michael, we do our budgets from the ground up to all of our branches, in fact we are taking and we are defleeting in specific market areas the ones I outlined as weak, and we are shifting the capital around and... but its built from the ground up, keep in mind we are also looking at going from more to a monthly mix, a larger monthly mix expanding that and as you do that you actually get some price compression.

Actually can you give me a little more color on why you get the price compression shifting it to the monthly mix?

Because when you go for longer term contracts, if you can imagine larger projects --

Especially in the industrial clients for example.

Yes industrial clients as well as larger projects you will get some pricing pressure on that. But, it's the right thing for the company that the contracts are out longer, there is less touch points so less cost control or less cost associated.

Right so what would you estimate then I know your revenue mix now is at 10% residential, maybe you got 20% in the infrastructure industrial type of work?

Right now the way in which we measure industrial, we measure industrial by SIC codes, so for actually doing business with a plant directly not building a plant or doing maintenance since or doing construction inside the plant.

Right.

Is running at 12% industrial, 10% is residential and the remainder would be related to non-residential construction.

So for 2008, what do you see that revenue mix shifting to?

Well, it's really hard to predict, but we are going to be focusing more on industrial customers, because of our broad footprint. We think we see that as an opportunity for us, and really just going after our still... our larger accounts we have got a national counts program out there, and a lot of our larger counts are still seeing '08 equal to '07 and we are...we want to go after more of the share of the wall.

Okay. What sort of estimates or what's your estimates assume in terms of the number of store locations for next year or 2008 versus '07 are you growing or shrinking location?

Well it will be down on a year-over-year basis, so we just announced that we are taking 19 stores out of the first quarter. We have not announced any cold starts in our plan, we have we have no cold starts estimated it's not part of our strategy, that's not to say if there is an opportunity, we may do one our two, but the net number will come down.

Okay. But, you have comfortable giving us any sense for the full year then what we can expect to see?

It's too early to tell; as we go through the year we keep everybody updated.

Okay.

Thank you.

Thanks.

Thank you Ms. Woo. Our next question or comment comes from the line of Joel Tiss with Lehman Brothers. Your line is open.

Hi, Joel.

Hi, Scott, I am standing in for Joel, had to step out, I apologize. Just quickly on the quarterly run rate for the pricing, how does that progress through the year?

It went from the third quarter I believe it was 2.1, 2.2, if you hang on, one second I will pull the numbers up.

Hi, this is Chris Brown just responding to the rate question there. So they were down 1.7%, they were up 1.7% in the first quarter and down 1.2 in the second quarter, down 2% in the third quarter, and as we disclosed in our earnings release for the fourth quarter our rental rates were down 2.1% as Michael mentioned earlier. We are forecasting them to be down at 1% in '08.

Okay, great. And then as far as SG&A margin, I know the longer-term goal as we get those to 13% and it looks like you add about 16% and in 2007 I mean are you kind of on a year-to-year progression, do you think this year is close to the 15 or is it 13.5, how do we get to that 13% margin build over the next five years, if you could just outline that for us?

Yes, I think we said we expect '08 to be about 53.The 13 is I think is a longer term goal and it will require us to have growth in our top line and it's unclear when there be a down turn here, so I would be uncomfortable say exactly when that's going to happen, but I definitely do think but we can see how accretive to that as I said over the next 5 years.

Okay great. And then just lastly on the end-market. So you are looking for those flow throughout the year or you kind of think, don't hang in there throughout the whole year?

We agree with the experts I mean we have double-digit growth throughout 2007, no one is projecting the end-market to grow and in fact we are actually seeing it come down and we are estimating somewhere between 3% to 4%.

Thanks a lot.

Thank you.

Thank you, Mr. Tiss. Our next question or comment is from the line of Matt Vitorioso Barclays Capital. Your line is open.

Good morning. I was wondering if you could give us some color on the used equipment market, I think you said you expected the sale of equipment for you guys to be down 35% in '08. Does that assume any deterioration in the prices for used equipment that you guys are getting?

No, it's not that really just, our fleet management, our life cycle process, identifying the essence that we want to sell for the business. So that has nothing to do with the market. Relative to the market, over the last four months, prices did have come down, however, having said that the most recent report published by Ross Associates [ph] actually saw a slight uptick and a results that we have seen form the most recent auctions in Florida, have suggested the prices were actually better than expected.

So then if utilization doesn't trended exactly how you'd like throughout the year, you could probably continue that kind of lower the size of the fleet by selling into that market?

Sure that's one of the levers we have in these businesses. If we see the market go down significantly, do we want labors we can fall, is sell our fleet, but as we stand right now in our projections we are very comfortable with our fleet sales.

Okay, great. And just to hit the pricing again I mean it clearly looks like its trending down through out '07, your assumption over 1% decline in '08 I guess that means you are expecting it to turn positive maybe in the second half or what's the expectations there?

Well we don't give quarterly guidance on rates, but what I can tell you is there is markets where there's opportunity and we are going to expand in that area and we are going to defleeting in the markets where we seeing softness.

Okay. And lastly just on the contractor supply business, it looks like you are going to be down to the four distributions centers by the second half of '08, I mean what's the longer term mean, is this business just, are you going to keep those four distributions centers, you think this business will be around in a couple of years or what do expect there?

Well we are going down just the four distributions centers and we will recalibrate the business at that point, if in fact will probably we can drive some more efficiencies out of the business, we may take it down to one or two more. But, a real driver for the organization is not on contractor supplies. Our driver for the organization is focusing on our rental fleet and focusing on the rental business and that's going to be our main stay, that's where we are going to be focusing on as organization. And contractor supplies will be just an add-on, and will not be a significant portion of our business.

Okay. Thank you very much.

Thank you.

Thank you sir. [Operator Instructions]. Our next question or comment is from the line of Chris Doherty [ph] with Oppenheimer. Your line is open.

Hi Chris.

Hi, Marty.

Mike.

Sorry, Michael. A question for Marty, and I think you have already sort of spoke about this. You might have thrown a little kink in my question, but you mentioned deferred taxes, and potentially depreciation from a stimulus plan. Given that you plan to keep the fleet where it is or grow slightly, it actually seems to be down recently. What could we expect from the timing differences in depreciation? Do you expect to work through the differed tax increase on the balance sheet in this last quarter?

No. What's happening is that we constantly have deferred taxes that are generated from new assets. Remember that even though we are not increasing the size of the fleet in '08, we are going to spend $700 million in CapEx. And so, those new assets will qualify for the bonus depreciation provisions in the stimulus act, which will give us a larger than normal, the tax to book depreciation advantage which will beef up deferred tax in '08 that we would not have otherwise expected.

And then Michael, a question for you. In terms of rental rate, I know your largest customer if you sort of aggregated all the government agencies together would be your largest customer. Do you have long-term rental rates with them, or those market based?

They are market based, but it is a... we have a contractual. Obviously, we have a GSA contract with them. It is market based, but we have a set formula that we work for them.

Alright. That's it. Thank you, gentlemen.

Thank you.

Thank you Mr. Doherty. Our next question or comment is from the line from of Alvin Leo [ph] with Citigroup. Your line is open sir.

Yes.Hi, it's actually David Raso here. Good morning. Quick question, in the channel, it seems, and correct me if I am wrong, that you are backing way a little bit from some of your at least within the mix of your historical fleet, your larger earthmoving equipment. Is that something I am picking up that's correct and I would think that might help alleviate some rental rate pressure for you, if... I mean you are running a big aerial fleet, but is there a conscious decision in '08 to move away from some of the larger earth moving, which might make your mix of rates better with how you're configuring the fleet?

Well David, that is two things. One, we have on numerous calls been saying that we have been de-fleeting in that large arena. Yes, there is a lot of rate pressure that associates with the larger earthmoving equipment. We are going to be de-fleeting, but it's not going to be significantly. We did see about 2 percentage point decline in earthmoving, larger earthmoving on a year-over-year basis. Earthmoving is still going to be part of our product mix that we will offer, but we are not going to offer the large product mix that we've had in the past. It will be more of the smaller items.

And when it comes to your rate projections for '08, can you give us a... I know it's a big generalization between all the portable compressors to earthmoving. But aerials versus non-aerials, when you look at our rate projection for the year?

We would expect to see aerial actually improve slightly on the year-over-year basis, just due to the fact that time utilization has been so high.

Yes. David, this is Martin. The 1% write down that we are talking about is actually the sum of our 11 regions, and we have a certain areas where we are expecting 3% to 4% rate improvement and other areas where we are expecting more than 1% rate decline, and the 1% decline is the net of all that, as built up for the ground up.

Okay. I'll get back in queue. Thank you.

Thanks David.

Thank you. Our next question or comment comes from the line of Scott Schneeberger with Oppenheimer [ph]. Your line is open.

Hi Scott.

Hey. Good morning. Thanks. Could guys talk a little bit about what you are seeing geography to geography, and I am kind of curious about Canada. We saw you had a positive on currency. How are things up in the oilsands? How big is that now? And then if you could just touch on the regions in where things may be stronger or weaker? Thanks.

Okay. Let me just start with the weakest area, is obviously in the Southeast in the Southwest. It comes down to really two states, Florida and California, as I mentioned earlier on the call. And when you take a look at the areas where you see pockets of strength, it's the Gulf, it's the Rocky Mountain, it is the Northwest, it's all of Canada. And then we are seeing improvements both in the Midwest and then also in the Northeast. The Southeast, you have got our Southeast region goes all the way up to the Maryland border, all the way down to the Florida, and Florida is a large market. But having said that, and to answer your question, there is still a significant upside in Canada, and Canada as a whole was really a tale of few stories. Historically, we saw the western half much stronger and the east was not as strong. However, having said that, the energy-related projects that we are seeing in the pickups, Canada will be strong for all of '08. And then Alberta talking about the Rocky.... tar sands projects there still about over $200 billion worth of work up there.

Okay, thanks. And then just metric, I don't know how you track it, but fleet downtime things that are coming upfront and the time that takes to get back out on rent. Do you track that can just give us an idea of how you are tracking relative to your particular goals there? Thanks.

Well, we were, historically we were... last year we were at 11, we are now at 10.7, it's an improvement, but it's not where we wanted to be. We wanted to be at 9%. We are not there yet, and we'll march towards that.

All right, guys. Thanks a lot.

Thank you, Scott.

Thank you, sir. Our next question or comment is from the line of Philip Volpicelli with Goldman Sachs. Your line is open.

Just with regard to the CEO search, is there a timeframe that must be completed by?

I have no comment, I don't know how longer it will take, Philip, this is Michael. We just announced it, obviously, it will take some time regard to the candidates but that's really up to the board.

Okay. And then with regard to the planning as laid out which sounds very good and attractive. What has been buy end from each of the different district leaders and is the managers of the branches?

The direction of the organization is focusing on the rental business, as caution ally it went over, it is very positive. That's where all of us including myself, I have been in the industry since 1978. And rental was always our core business it's what we focused on. And that the other items such as new sales used sales was just an offshoot of our rental business. So it's really going back to our basics going back to what we know, and it has been received very positively throughout the field.

That's great. In terms of the restricted payment capacity last call, I think you mentioned it was 970, and you had about $150 million of net income so are we at about a 1.50 billion now in terms of restricted payment capacity?

Yes, this is Marty that's in the ballpark I wouldn't have said around $1 billion probably slightly above that and just to remind you that there are sub limits there are threshold payment levels contained in the indentures for our C and D preferred which would essentially limit payments to around a $100 million.

Okay, meaning you have to take those out before you could access the total $10.50 billion or--

No it would have to be some kind of an accommodation with the others of the C and D preferred.

Okay. And have you begun conversation if I remember correctly those are tightly held I mean you have begun conversations with them or is that's something that's in the in plans?

That is something that's in the preview of our board and I am sure they are working as diligently as they can to increase shareholder value.

Understood and then with regard to the class action law suit that have been filed. Can you give us any update on where we are in that process? I know you can't comment on the results, but have you guys started discovery, have you sorted negotiations with, where do we stand on that?

Yes, we really don't comment to the level of the stages, I mean I think that the news, the cases are fairly new and as event occur that we think warrant disclosure would certainly do it.

Okay. And then specifically with can you... I don't know if you are willing to do this or you want to do this, how bad the rate pressure was in your two weaker markets South Florida and California, can you just give it to us in numbers or just how much worse it was then what you saw what you recorded?

Well we don't give that numbers out for other regions, we don't give that type of granularity out for various reasons obviously there are some competitors on the phone calls. We can take this offline.

Okay, great. Thank you very much.

Thank you.

Thank you very much. Our next question or comment is from the line of Matthew Oronsky [ph] with Citigroup. Your line is open sir.

My question is already answered. Thank you.

Thanks, Matt.

Thank you sir. We have a follow-up question or comment from the line of Joel Tiss. Your line is open again sir.

Hello Joel, how is it going?

Good. All right, do you have any sort of target on your age fleet or anything that you can give us just the guidance and the direction say by the end of '08 or end of '09?

End of '08, Joel, we plan on being an up 40 months. Historically, we have always said we are very comfortable between 35 and 45 and we don't, we are not going to move from that, we are very comfortable within that range, so obviously if the market was to go down, we can age it out further put 40 months is what we are projecting for '08.

Okay, and to follow up on what David was asking about before, can you talk a little bit about what are the sources of strength in the area work platform business, what are some of the end mark that you would highlights that are driving the strength in that business for the next twelve months?

While the energy sector is very active. Larger projects, the entertainment industry, casinos, stadiums, large projects also some manufacturing, we have some manufacturing coming in from foreign investment. Those are the likely projects that we... large projects that we are actively on.

And are you seeing any trend changes on the municipal side, it seems that the municipalities are having a little bit more difficulty raising funds and maybe collecting as higher level of taxes as they were recently. Are you seeing any trends there that you can talk about?

No, we haven't seen any, the latest report I saw from the government was projecting the infrastructures spending in that space to be up about 2.8 percentage points.

Okay. And last, can you give us some maybe like body language I would say on the CapEx because now you have added in this flexibility, and maybe you are going in a monthly ordering or quarterly ordering. And could you just give us any sense you are leaning toward, beating your CapEx, but spending more or spending less than where you are more on that not asking for forecast just sort of like body language a little bit, flexing with what's happening in the end market? Thank you.

Yes, I think what the Marty said, on the raise also goes back to the comment on CapEx. We build on ground offering that's with all the branches; they are projecting the anticipated work levels. We are probably seen movements with inside the company or we are not going to see a significant movement of for our CapEx other than we projected.

Okay. Thank you very much.

Thank you.

Thank you. Our next question or comment is from the line of Phil Gresh with J.P. Morgan. Your line is open.

Hi, Phil.

Hey, guys. Quick question on the used equipment sales, can you talked about sales of distressed assets in the fourth quarter. So it is pretty margin there. How much did that affect the quarter and what you are looking at your margin in that business in '08?

Sure. The decline in the fourth quarter year-over-year was entirely due to our stepping up to some distressed assets that we had. If you were to strip those sales out we would had a used margin rate that was comparable to our trend line. And as Michael mentioned we don't expect to see deterioration in that margin. We are moving forward to manage our fleet in accordance with our age and condition requirements.

Okay. So you think you are pretty much through that that sales of distressed assets at this point?

You know, we continuously look at our fleet, but I think we were doing kind of special effort there at year end.

Okay. And then just interims of the 500 million in incremental EBITDA over five years, appreciate the additional color in the cost side, but in '08 it looks like there going to be 20 million or so incremental according to your guidance. I am wondering if you could talk a little bit about maybe the trajectory that and how much was that based on cost cutting versus revenue growth etcetera?

Yes.I think it's more than 20 million in '08. But the labor savings and loan is worth 50 million, but the point is that there is another price increases that we constantly face that are netted against that. I think directionally of the 500 million, roughly half of that we would kind of view as under our control, specific cost cutting initiatives that we have, and the remainder of it is going to require some top line growth and which we would then continue to maintain our cost at a controlled level and realized the reduction in rate as a result.

Okay, that's helpful. Thanks.

Thank you. Our next question or comment is from the line of Ana Recinos with UBS. Your line is open.

Hi, good morning.

Hi, how are you?

How are you?

Fine, how are you?

Good.

One last question I guess on the CapEx, just wondering, what types of price increases are declines you are expecting to pay on your new equipment purchases this year?

Each year our fleet management team negotiates vigorously with our vendors. We are projecting this year, our prices to be flat on a year-over-year basis.

And what was the number last year?

That was up about two points.

Okay, thank you.

Thank you.

Thank you. Our final question or comment comes from the line of Seth Weber with Bank of America. Your line is open.

Thanks. Good morning, everybody.

Hi, Seth.

Just real quick, on the used equipment, I am going back to that, have you guys started to exploit the opportunity of selling used equipment overseas or into some of the emerging markets and if not is that something that you think could hit the rate over this year?

Well Seth, this is Mike. We participate in that arena through the auction houses. They are clearly set up for that, they do advertising across all of the other markets that you just mentioned. And that was the result of we saw the activity at Ritchie Auction and the out sign [ph] auction, the large auction down in Florida, where there was a tremendous amount of foreign investment and foreign buyers. So we really leave it up them. That's their strength and I'll go back to say what I said earlier. We are a rental company and we really need to focus on our rental and those experts who can sell the equipment that's what we are going to leave up to them to do.

Okay and would you say, just unbalanced that there is more tolerance to take older equipment in those markets I mean if you have a view on it?

Well what I can tell you is the results that we have seen out of the most recent auction, where as we anticipated that the prices are actually came in much better than we anticipated. I mean a large impact of that was the influx of foreign buyers.

Okay. Thanks very much.

Thank you.

Thank you very much. I would like to turn the presentation back over to Mr. Kneeland for any closing remarks.

Thank you, operator. Before we close, I want to leave you with this thought. In my 10 years at United Rentals I have seen firsthand how this company can do anything it sets its mind too. We have great people in place with our braches, and we have a powerful plan regarding our progress. We know we can capitalize and substantial upsize to our business in any market environment by making continued improvements in our cost structure and by harnessing the full earning power of the largest equipment rental fleet in North America. As we stand hear today we have excellent momentum and results to show for it. And you can expect this year more good news from us as the year progresses. So I want to close off by saying thank you for participating in this call.

Ladies and gentlemen, this does conclude today's conference. We again thank you or your participation. You may now disconnect at this time. Good day