10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission File No. 1-14387

United Rentals, Inc.

Commission File No. 1-13663

United Rentals (North America), Inc.

(Exact names of registrants as specified in their charters)

Delaware	06-1522496
Delaware	06-1493538
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Nos.)
Five Greenwich Office Park, Greenwich, Connecticut	06830
(Address of principal executive offices)	(Zip Code)

(203) 622-3131

(Registrants’ telephone number, including area code)

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.  x  Yes  ¨  No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  x  Yes  ¨  No

As of May 6, 2004, there were 77,143,306 shares of the United Rentals, Inc. common stock, $.01 par value, outstanding. There is no market for the common stock of United Rentals (North America), Inc., all outstanding shares of which are owned by United Rentals, Inc.

This combined Form 10-Q is separately filed by (i) United Rentals, Inc. and (ii) United Rentals (North America), Inc. (which is a wholly owned subsidiary of United Rentals, Inc.). United Rentals (North America), Inc. meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by such instruction.

UNITED RENTALS, INC.

UNITED RENTALS (NORTH AMERICA), INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

INDEX

		Page
PART I	FINANCIAL INFORMATION
Item 1	Unaudited Consolidated Financial Statements
	United Rentals, Inc. Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003 (unaudited)	4
	United Rentals, Inc. Consolidated Statements of Operations for the Three Months Ended March 31, 2004 and 2003 (unaudited)	5
	United Rentals, Inc. Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2004 (unaudited)	6
	United Rentals, Inc. Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 (unaudited)	7
	United Rentals (North America), Inc. Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003 (unaudited)	8
	United Rentals (North America), Inc. Consolidated Statements of Operations for the Three Months Ended March 31, 2004 and 2003 (unaudited)	9
	United Rentals (North America), Inc. Consolidated Statement of Stockholder’s Equity for the Three Months Ended March 31, 2004 (unaudited)	10
	United Rentals (North America), Inc. Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 (unaudited)	11
	Notes to Unaudited Consolidated Financial Statements	12
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures about Market Risk	46
Item 4	Controls and Procedures	46
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	47
Item 6	Exhibits and Reports on Form 8-K	47
	Signatures	50

Certain statements contained in this Report are forward-looking in nature. Such statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “on-track,” “plan,” “intend” or “anticipate,” or the negative thereof or comparable terminology, or by discussions of strategy. You are cautioned that our business and operations are subject to a variety of risks and uncertainties and, consequently, our actual results may materially differ from those projected by any forward-looking statements. Certain of these factors are discussed in Item 2 of Part I of this Report under the caption “—Factors that May Influence Future Results and Results Anticipated by Forward-Looking Statements.” We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.

We make available on our internet website free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports as soon as practicable after we electronically file such reports with the SEC. Our website address is www.unitedrentals.com. The information contained in our website is not incorporated by reference in this Report.

UNITED RENTALS

United Rentals is the largest equipment rental company in North America. We offer for rent over 600 types of equipment—everything from heavy machines to hand tools—through our network of more than 730 rental locations in the United States, Canada and Mexico. We currently serve approximately 1.9 million customers including construction and industrial companies, manufacturers, utilities, municipalities, homeowners and others.

Our fleet of rental equipment, the largest in the world, includes over 500,000 units having an original purchase price of approximately $3.7 billion. The fleet includes:

• General construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earth moving equipment, material handling equipment, compressors, pumps and generators;

• Aerial work platforms, such as scissor lifts and boom lifts;

• General tools and light equipment, such as power washers, water pumps, heaters and hand tools;

• Trench safety equipment for below ground work, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment; and

• Traffic control equipment, such as barricades, cones, warning lights, message boards and pavement marking systems.

In addition to renting equipment, we sell used rental equipment, act as a dealer for new equipment and sell related merchandise, parts and service.

Industry Background

Based on industry sources, we estimate that the U.S. equipment rental industry has grown from approximately $6.6 billion in annual rental revenues in 1990 to about $23.5 billion in 2003. This represents a compound annual growth rate of approximately 10.3%, although in the past two years industry rental revenues decreased by about $1.3 billion. The recent downturn in industry revenues is a reflection of the significant slowdown in private non-residential construction activity. This activity declined 2% in the first quarter of 2004 from the same quarter last year, 5.2% in 2003 and 13.2% in 2002 according to Department of Commerce data. Our industry is particularly sensitive to changes in non-residential construction activity because to date the principal end market for rental equipment has been non-residential construction. When non-residential construction activity eventually rebounds, we would expect to see our industry resume its long-term growth trend.

1

We believe that long-term industry growth, in addition to reflecting general economic expansion, is being driven by an end-user market that increasingly recognizes the many advantages of renting equipment rather than owning. Customers recognize that by renting they can:

• avoid the large capital investment required for many equipment purchases;

• access a broad selection of equipment and select the equipment best suited for each particular job;

• reduce storage and maintenance costs; and

• access the latest technology without investing in new equipment.

While the construction industry has to date been the principal user of rental equipment, industrial companies, utilities and others are increasingly using rental equipment for plant maintenance, plant turnarounds and other operations requiring the periodic use of equipment. We believe that over the long term, increasing rentals by the industrial sector could become a more significant factor in driving our industry’s growth.

Competitive Advantages

We believe that we benefit from the following competitive advantages:

Large and Diverse Rental Fleet.    Our rental fleet is the largest and most comprehensive in the industry, which allows us to:

• attract customers by providing “one-stop” shopping;

• serve a diverse customer base and reduce our dependence on any particular customer or group of customers; and

• serve customers that require substantial quantities and/or wide varieties of equipment.

Significant Purchasing Power.    We purchase large amounts of equipment, merchandise and other items, which enables us to negotiate favorable pricing, warranty and other terms with our vendors.

Operating Efficiencies.    We benefit from the following operating efficiencies:

Equipment Sharing Among Branches.    We generally group our branches into clusters of 10 to 30 locations that are in the same geographic area. Each branch within a cluster can access all available equipment in the cluster area. This increases equipment utilization because equipment that is idle at one branch can be marketed and rented through other branches. In the first quarter of 2004, the sharing of equipment among branches accounted for approximately 10.4%, or $49 million, of our total rental revenue.

Ability to Transfer Equipment Among Branches.    The size of our branch network gives us the ability to take advantage of strength at a particular branch or in a particular region by permanently transferring underutilized equipment from weaker to stronger areas.

Consolidation of Common Functions.    We reduce costs through the consolidation of functions that are common to our more than 730 branches, such as payroll, accounts payable, benefits and risk management, information technology and credit and collection.

State-of-the-Art Information Technology Systems.    We have state-of-the-art information technology systems that facilitate our ability to make rapid and informed decisions, respond quickly to changing market conditions, and share equipment among branches. We have an in-house team of information technology specialists that supports our systems.

2

Strong Brand Recognition.    We have strong brand recognition, which helps us to attract new customers and build customer loyalty.

Geographic and Customer Diversity.    We have more than 730 branches in 47 states, seven Canadian provinces and Mexico and serve customers that range from Fortune 500 companies to small companies and homeowners. In 2003, we served more than 1.9 million customers and our top ten customers accounted for less than 3% of our revenues. We believe that our geographic and customer diversity provide us with many advantages including: (1) enabling us to better serve National Account customers with multiple locations, (2) helping us achieve favorable resale prices by allowing us to access used equipment resale markets across the country, (3) reducing our dependence on any particular customer and (4) reducing the impact that fluctuations in regional economic conditions have on our overall financial performance.

National Account Program.    Our National Account sales force is dedicated to establishing and expanding relationships with large companies, particularly those with a national or multi-regional presence. We offer our National Account customers the benefits of a consistent level of service across North America, a wide selection of equipment and a single point of contact for all their equipment needs. We currently serve more than 1,700 National Account customers.

Strong and Motivated Branch Management.    Each of our branches has a full-time branch manager who is supervised by a district manager from one of our 58 districts and a vice president from one of our nine regions. We believe that our managers are among the most knowledgeable and experienced in the industry, and we empower them—within budgetary guidelines—to make day-to-day decisions concerning branch matters. Senior management closely tracks branch, district and regional performance with extensive systems and controls, including performance benchmarks and detailed monthly operating reviews. The compensation of branch managers and certain other branch personnel is linked to their branch’s financial performance and return on assets. This incentivizes branch personnel to control costs, optimize pricing, share equipment with other branches and manage their fleet efficiently.

Risk Management and Safety Programs.    We believe that we have one of the most comprehensive risk management and safety programs in the industry. Our risk management department is staffed by experienced professionals and is responsible for implementing our safety programs and procedures, developing our employee and customer training programs and managing any claims against us.

3

UNITED RENTALS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2004			December 31, 2003
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	127,144		$	79,449
Accounts receivable, net of allowance for doubtful accounts of $48,930 in 2004 and $47,439 in 2003		448,445			499,433
Inventory		114,140			105,987
Prepaid expenses and other assets		126,267			118,145
Rental equipment, net		2,121,325			2,071,492
Property and equipment, net		414,384			406,601
Goodwill, net		1,465,000			1,437,809
Other intangible assets, net		2,592			3,225
	$	4,819,297		$	4,722,141
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable	$	239,994		$	150,796
Debt		3,006,189			2,817,088
Subordinated convertible debentures		221,550			221,550
Deferred taxes		98,071			165,052
Accrued expenses and other liabilities		207,000			226,780
Total liabilities		3,772,804			3,581,266
Commitments and contingencies
Stockholders’ equity:
Preferred stock—$.01 par value, 5,000,000 shares authorized:
Series C perpetual convertible preferred stock—$300,000 liquidation preference, 300,000 shares issued and outstanding		3			3
Series D perpetual convertible preferred stock—$150,000 liquidation preference, 150,000 shares issued and outstanding		2			2
Common stock—$.01 par value, 500,000,000 shares authorized, 77,349,461 shares issued and outstanding in 2004 and 77,150,277 in 2003		773			771
Additional paid-in capital		1,333,527			1,329,946
Deferred compensation		(15,795	)		(25,646	)
Accumulated deficit		(295,903	)		(189,300	)
Accumulated other comprehensive income		23,886			25,099
Total stockholders’ equity		1,046,493			1,140,875
	$	4,819,297		$	4,722,141

See accompanying notes.

4

UNITED RENTALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31
	2004			2003
	(In thousands)
Revenues:
Equipment rentals	$	467,268		$	443,648
Sales of rental equipment		55,398			35,080
Sales of equipment and contractor supplies and other revenues		122,047			113,123
Total revenues		644,713			591,851
Cost of revenues:
Cost of equipment rentals, excluding depreciation		264,780			252,404
Depreciation of rental equipment		90,758			80,743
Cost of rental equipment sales		37,431			23,255
Cost of equipment and contractor supplies sales and other operating costs		87,648			81,460
Total cost of revenues		480,617			437,862
Gross profit		164,096			153,989
Selling, general and administrative expenses		114,772			96,761
Non-rental depreciation and amortization		16,437			16,978
Operating income		32,887			40,250
Interest expense		45,942			50,975
Interest expense—subordinated convertible debentures		3,627
Preferred dividends of a subsidiary trust					3,681
Other (income) expense, net		160,902			(106	)
Loss before benefit for income taxes		(177,584	)		(14,300	)
Benefit for income taxes		(70,981	)		(5,577	)
Net loss	$	(106,603	)	$	(8,723	)
Loss per share:
Basic and diluted	$	(1.38	)	$	(0.11	)

See accompanying notes.

5

UNITED RENTALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Series C Perpetual Convertible Preferred Stock		Series D Perpetual Convertible Preferred Stock		Common Stock			Additional Paid-in Capital		Deferred Compensation			Retained Earnings			Comprehensive Loss			Accumulated Other Comprehensive Income
					Number of Shares	Amount
	(In thousands)
Balance, December 31, 2003	$	3	$	2	77,150	$	771	$	1,329,946	$	(25,646	)	$	(189,300	)				$	25,099
Comprehensive income (loss):
Net loss														(106,603	)		(106,603	)
Other comprehensive income (loss):
Foreign currency translation adjustments																	(1,213	)		(1,213	)
Comprehensive loss:																$	(107,816	)
Exercise of common stock options and warrants					199		2		3,581
Amortization of deferred compensation											9,851
Balance March 31, 2004	$	3	$	2	77,349	$	773	$	1,333,527	$	(15,795	)	$	(295,903	)				$	23,886

See accompanying notes.

6

UNITED RENTALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31
	2004			2003
	(In thousands)
Cash Flows From Operating Activities:
Net loss	$	(106,603	)	$	(8,723	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		107,195			97,721
Gain on sales of rental equipment		(17,967	)		(11,825	)
Deferred taxes		(70,981	)		(4,833	)
Amortization of deferred compensation		9,851			1,614
Repurchase premiums for debt refinancing		139,005
Changes in operating assets and liabilities:
Accounts receivable		54,155			43,930
Inventory		(2,111	)		(9,021	)
Prepaid expenses and other assets		22,671			(6,632	)
Accounts payable		88,842			(15,381	)
Accrued expenses and other liabilities		(21,536	)		(4,196	)
Net cash provided by operating activities		202,521			82,654
Cash Flows From Investing Activities:
Purchases of rental equipment		(152,527	)		(102,499	)
Purchases of property and equipment		(18,698	)		(8,885	)
Proceeds from sales of rental equipment		55,398			35,080
Deposits on rental equipment purchases					(13,422	)
Purchases of other companies		(60,738	)		(4,162	)
Net cash used in investing activities		(176,565	)		(93,888	)
Cash Flows From Financing Activities:
Proceeds from debt		1,978,603			19,500
Payments of debt		(1,927,073	)		(3,041	)
Payments of financing costs		(33,695	)		(590	)
Proceeds from the exercise of common stock options and warrants		3,156
Net cash provided by financing activities		20,991			15,869
Effect of foreign exchange rates		748			9,062
Net increase in cash and cash equivalents		47,695			13,697
Cash and cash equivalents at beginning of period		79,449			19,231
Cash and cash equivalents at end of period	$	127,144		$	32,928
Supplemental disclosure of cash flow information:
Cash paid for interest	$	52,207		$	39,972
Cash paid for income taxes, net of refunds	$	56		$	360
Supplemental disclosure of non-cash investing and financing activities:
The Company acquired the net assets and assumed certain liabilities of other companies as follows:
Assets, net of cash acquired	$	66,078		$	3,314
Liabilities assumed		(5,788	)		(50	)
		60,290			3,264
Due to seller and other payments		448			898
Net cash paid	$	60,738		$	4,162

See accompanying notes.

7

UNITED RENTALS (NORTH AMERICA), INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2004			December 31, 2003
	(In thousands, except share data)
ASSETS
Cash and cash equivalents	$	127,144		$	79,449
Accounts receivable, net of allowance for doubtful accounts of $48,930 in 2004 and $47,439 in 2003		448,445			499,433
Inventory		114,140			105,987
Prepaid expenses and other assets		118,198			109,992
Rental equipment, net		2,121,325			2,071,492
Property and equipment, net		389,543			381,345
Goodwill, net		1,465,000			1,437,809
Other intangible assets, net		2,592			3,225
	$	4,786,387		$	4,688,732
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Accounts payable	$	239,994		$	150,796
Debt		3,006,189			2,817,088
Deferred taxes		98,071			165,052
Accrued expenses and other liabilities		255,217			264,067
Total liabilities		3,599,471			3,397,003
Commitments and contingencies
Stockholder’s equity:
Common stock—$.01 par value, 3,000 shares authorized, 1,000 shares issued and outstanding
Additional paid-in capital		1,586,091			1,582,935
Accumulated deficit		(423,061	)		(316,305	)
Accumulated other comprehensive income		23,886			25,099
Total stockholder’s equity		1,186,916			1,291,729
	$	4,786,387		$	4,688,732

See accompanying notes.

8

UNITED RENTALS (NORTH AMERICA), INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31
	2004			2003
	(In thousands)
Revenues:
Equipment rentals	$	467,268		$	443,648
Sales of rental equipment		55,398			35,080
Sales of equipment and contractor supplies and other revenues		122,047			113,123
Total revenues		644,713			591,851
Cost of revenues:
Cost of equipment rentals, excluding depreciation		264,780			252,404
Depreciation of rental equipment		90,758			80,743
Cost of rental equipment sales		37,431			23,255
Cost of equipment and contractor supplies and other operating costs		87,648			81,460
Total cost of revenues		480,617			437,862
Gross profit		164,096			153,989
Selling, general and administrative expenses		114,772			96,761
Non-rental depreciation and amortization		14,438			14,445
Operating income		34,886			42,783
Interest expense		45,942			50,975
Other (income) expense, net		160,902			(106	)
Loss before benefit for income taxes		(171,958	)		(8,086	)
Benefit for income taxes		(68,829	)		(3,154	)
Net loss	$	(103,129	)	$	(4,932	)

See accompanying notes.

9

UNITED RENTALS (NORTH AMERICA), INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY

(Unaudited)

	Common Stock		Additional Paid-In Capital		Retained Earnings			Comprehensive Loss			Accumulated Other Comprehensive Income
	Number of Shares	Amount
	(In thousands, except share data)
Balance, December 31, 2003	1,000		$	1,582,935	$	(316,305	)				$	25,099
Comprehensive income (loss):
Net loss						(103,129	)	$	(103,129	)
Other comprehensive income (loss):
Foreign currency translation adjustments									(1,213	)		(1,213	)
Comprehensive loss								$	(104,342	)
Contributed capital from parent				3,156
Dividend distributions to parent						(3,627	)
Balance, March 31, 2004	1,000		$	1,586,091	$	(423,061	)				$	23,886

See accompanying notes.

10

UNITED RENTALS (NORTH AMERICA), INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31
	2004			2003
	(In thousands)
Cash Flows From Operating Activities:
Net loss	$	(103,129	)	$	(4,932	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		105,196			95,188
Gain on sales of rental equipment		(17,967	)		(11,825	)
Deferred taxes		(68,829	)		(4,833	)
Repurchase premiums for debt refinancing		139,005
Changes in operating assets and liabilities:
Accounts receivable		54,155			43,930
Inventory		(2,111	)		(9,021	)
Prepaid expenses and other assets		22,805			(6,442	)
Accounts payable		88,842			(15,381	)
Accrued expenses and other liabilities		(13,185	)		(2,188	)
Net cash provided by operating activities		204,782			84,496
Cash Flows From Investing Activities:
Purchases of rental equipment		(152,527	)		(102,499	)
Purchases of property and equipment		(17,332	)		(7,046	)
Proceeds from sales of rental equipment		55,398			35,080
Deposits on rental equipment purchases					(13,422	)
Purchases of other companies		(60,738	)		(4,162	)
Net cash used in investing activities		(175,199	)		(92,049	)
Cash Flows From Financing Activities:
Proceeds from debt		1,978,603			19,500
Payments of debt		(1,927,073	)		(3,041	)
Payments of financing costs		(33,695	)		(590	)
Capital contributions by parent		3,156
Dividend distributions to parent		(3,627	)		(3,681	)
Net cash provided by financing activities		17,364			12,188
Effect of foreign exchange rates		748			9,062
Net increase in cash and cash equivalents		47,695			13,697
Cash and cash equivalents at beginning of period		79,449			19,231
Cash and cash equivalents at end of period	$	127,144		$	32,928
Supplemental disclosure of cash flow information:
Cash paid for interest	$	48,607		$	35,370
Cash paid for income taxes, net of refunds	$	56		$	360
Supplemental disclosure of non-cash investing and financing activities:
The Company acquired the net assets and assumed certain liabilities of other companies as follows:
Assets, net of cash acquired	$	66,078		$	3,314
Liabilities assumed		(5,788	)		(50	)
		60,290			3,264
Due to seller and other payments		448			898
Net cash paid	$	60,738		$	4,162

See accompanying notes.

11

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    Basis of Presentation

General

United Rentals, Inc., (“Holdings” or the “Company”) is principally a holding company and conducts its operations primarily through its wholly owned subsidiary United Rentals (North America), Inc. (“URI”) and subsidiaries of URI. Separate footnote information is not presented for the financial statements of URI and subsidiaries as that information is substantially equivalent to that presented below. Earnings per share data is not provided for the operating results of URI and its subsidiaries as they are wholly owned subsidiaries of Holdings.

The Consolidated Financial Statements of the Company included herein are unaudited and, in the opinion of management, such financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Interim financial statements do not require all disclosures normally presented in year-end financial statements, and, accordingly, certain disclosures have been omitted. Results of operations for the three month period ended March 31, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. The Consolidated Financial Statements included herein should be read in conjunction with the Company’s Consolidated Financial Statements and related Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Stock-Based Compensation

The Company accounts for its stock-based compensation arrangements using the intrinsic value method under the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”. At March 31, 2004, the Company had six stock-based compensation plans. Since stock options are granted by the Company with exercise prices at or greater than the fair value of the shares at the date of grant, no compensation expense is recognized. Restricted stock awards granted by the Company are recognized as deferred compensation. The Company recognizes compensation expense related to these restricted stock awards over their vesting periods. The following table provides additional information related to the Company’s stock-based compensation arrangements for the three months ended March 31, 2004 and 2003 (in thousands, except per share data):

	2004			2003
Net loss, as reported	$	(106,603	)	$	(8,723	)
Plus: Stock-based compensation expense included in reported net loss, net of tax		7,281			958
Less: Stock-based compensation expense determined using the fair value method, net of tax		(7,584	)		(1,591	)
Pro forma net loss	$	(106,906	)	$	(9,356	)
Basic loss per share:
As reported	$	(1.38	)	$	(0.11	)
Pro forma	$	(1.38	)	$	(0.12	)
Diluted loss per share:
As reported	$	(1.38	)	$	(0.11	)
Pro forma	$	(1.38	)	$	(0.12	)

The weighted average fair value of options granted was $7.77 and $4.36 during the three months ended March 31, 2004 and 2003, respectively. The fair value is estimated on the date of grant using the Black-Scholes option pricing model which uses subjective assumptions which can materially affect fair value estimates and, therefore, does not necessarily provide a single measure of fair value of options. The Company used a risk-free

12

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

interest rate average of 1.99% and 1.93% in 2004 and 2003, respectively, a volatility factor for the market price of the Company’s common stock of 62% and 65% in 2004 and 2003, respectively, and a weighted-average expected life of options of approximately three years in 2004 and 2003. For purposes of these pro forma disclosures, the estimated fair value of options is amortized over the options’ vesting period. Since the number of options granted and their fair value may vary significantly from year to year, the pro forma compensation expense in future years may be materially different.

Impact of Recently Issued Accounting Standards

In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”, revised December 2003), “Consolidation of Variable Interest Entities,” which addresses consolidation of variable interest entities (“VIEs”). FIN 46 requires a VIE to be consolidated by a parent company if that company is subject to the majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. A VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. The consolidation requirements of FIN 46 apply immediately to VIEs created after January 31, 2003. For entities created prior to February 1, 2003 the effective date of these requirements, which originally was July 1, 2003, was deferred so as not to apply until the first period ending after December 15, 2003. Upon adoption of this standard, as of December 31, 2003, the Company deconsolidated a subsidiary trust that had issued trust preferred securities. As a result of such deconsolidation (i) the trust preferred securities issued by the Company’s subsidiary trust, which had previously been reflected on the Company’s consolidated balance sheets, were removed from its consolidated balance sheets at December 31, 2003, (ii) the subordinated convertible debentures that the Company issued to the subsidiary trust, which previously had been eliminated in the Company’s consolidated balance sheets, were no longer eliminated in its consolidated balance sheets as of December 31, 2003 and (iii) commencing January 1, 2004, the interest on the subordinated convertible debentures is reflected as an expense on our consolidated statement of operations instead of the dividends on the trust preferred securities. The carrying amount of the trust preferred securities removed from the consolidated balance sheets was the same as the carrying amount of the subordinated convertible debentures added to the consolidated balance sheets. However, the subordinated convertible debentures are reflected as a component of liabilities on the consolidated balance sheets at December 31, 2003, whereas the trust preferred securities were reflected as a separate category prior to December 31, 2003. The adoption of this standard did not otherwise have a material effect on the Company’s statements of financial position or results of operations.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This standard amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This standard is effective for contracts entered into or modified after June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. The provisions of this standard that relate to SFAS No. 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. The adoption of this standard regarding the provisions effective after June 30, 2003 did not have a material effect on the Company’s statements of financial position or operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This standard requires that financial instruments falling within the scope of this standard be classified as liabilities. This standard is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective with the first interim period beginning after June 15, 2003. The adoption of this standard did not have a material effect on the Company’s statements of financial position or results of operations.

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2.    Acquisitions

During each of the three months ended March 31, 2004 and the year ended December 31, 2003, the Company completed one acquisition that was accounted for as a purchase. The results of operations of the businesses acquired in these acquisitions have been included in the Company’s results of operations from their respective acquisition dates.

In February 2004, the Company acquired 843504 Alberta Ltd. (formerly known as Skyreach Equipment, Ltd.) with annual revenues of approximately $40 million for approximately $60 million.

The purchase prices for acquisitions accounted for as purchases have been allocated to the assets acquired and liabilities assumed based on their respective fair values at their respective acquisition dates. Purchase price allocations are subject to change when additional information concerning asset and liability valuations are completed. The preliminary purchase price allocations that are subject to change primarily consist of rental and non-rental equipment valuations. These allocations are finalized within 12 months of the acquisition date and are not expected to result in significant differences between the preliminary and final allocations.

The following table summarizes, on an unaudited pro forma basis, the results of operations of the Company for the three months ended March 31, 2004 and 2003 as though each acquisition which was consummated during the period January 1, 2003 to March 31, 2004 as mentioned above and in Note 3 to the Notes to Consolidated Financial Statements included in the Company’s 2003 Annual Report on Form 10-K was made on January 1, 2003 (in thousands, except per share data):

	Three Months Ended March 31,
	2004			2003
Revenues	$	651,686		$	600,649
Net loss	$	(108,761	)	$	(9,495	)
Basic loss per share	$	(1.41	)	$	(0.12	)
Diluted loss per share	$	(1.41	)	$	(0.12	)

The unaudited pro forma results are based upon certain assumptions and estimates which are subject to change. These results are not necessarily indicative of the actual results of operations that might have occurred, nor are they necessarily indicative of expected results in the future.

3.    Goodwill and Other Intangible Assets

Changes in the Company’s carrying amount of goodwill for the first three months of 2004 are as follows (in thousands):

Balance at December 31, 2003	$	1,437,809
Goodwill related to acquisitions		26,897
Foreign currency translation and other adjustments		294
Balance at March 31, 2004	$	1,465,000

In accordance with SFAS No. 142, goodwill, which was previously amortized over 40 years, is no longer amortized. The Company’s approximately $2.6 million of other intangible assets will continue to be amortized over their estimated useful lives. The Company is required to periodically review its goodwill for impairment. In general this means that the Company must determine whether the fair value of the goodwill, calculated in accordance with applicable accounting standards, is at least equal to the recorded value shown on its balance sheet. If the fair value of the goodwill is less than the recorded value, the Company is required to write off the excess goodwill as expense.

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company is generally required to review its goodwill for impairment annually. However, if events or circumstances suggest that its goodwill could be impaired, impairment testing may be required before the scheduled annual impairment test. The next scheduled annual impairment test will be as of October 1, 2004.

The Company assesses impairment solely on the basis of recent historical performance and without reference to expected future performance. This means that, if the historical data for a reporting unit indicates impairment, a goodwill write-off is required even when the Company believes that reporting unit’s future performance will be significantly better. The fact that the Company tests for impairment using only historical financial data increases the likelihood that the Company will be required to take additional non-cash goodwill write-offs in the future, although it cannot quantify at this time the magnitude of any future write-offs.

Other intangible assets consist of non-compete agreements and are amortized over periods ranging from three to eight years. The cost of other intangible assets and the related accumulated amortization as of March 31, 2004 were $18.4 million and $15.8 million, respectively. Amortization expense of other intangible assets was $1.2 million for the first three months of 2004 and $0.9 million for the first three months of 2003.

As of March 31, 2004, estimated amortization expense of other intangible assets for the remainder of 2004 and for each of the next five years is as follows (in thousands):

Remainder of 2004	$	1,031
2005		788
2006		524
2007		130
2008		82
2009		37
	$	2,592

4.    Restructuring Charges

The Company adopted a restructuring plan in 2001 and a second restructuring plan in 2002 as described below. In connection with these plans, the Company recorded restructuring charges of $28.9 million in 2001 (including a non-cash component of approximately $10.9 million) and $28.3 million in the fourth quarter of 2002 (including a non-cash component of approximately $2.5 million).

The 2001 plan involved the following principal elements: (i) 31 underperforming branches were closed or consolidated with other locations, (ii) five administrative offices were closed or consolidated with other locations; (iii) the reduction of the Company’s workforce by 489 through the termination of branch and administrative personnel and (iv) certain information technology hardware and software was no longer used.

The 2002 plan involved the following key elements: (i) 40 underperforming branches and five administrative offices were closed or consolidated with other locations; (ii) reduction of the Company’s workforce by 412 through the termination of branch and administrative personnel, and (iii) a certain information technology project was abandoned.

The costs to vacate facilities primarily represent the payment of obligations under leases offset by estimated sublease opportunities, the write-off of capital improvements made to such facilities and the write-off of related

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

goodwill (only in 2001). The workforce reduction costs primarily represent severance. The information technology costs represent the payment of obligations under equipment leases relating to the abandonment of certain information technology projects.

The aggregate balance of the 2001 and 2002 charges was $15.9 million as of March 31, 2004 consisting of $0.7 million for the 2001 charge and $15.2 million for the 2002 charge. The Company estimates that approximately $5.4 million of the aggregate amount will be incurred by December 31, 2004 and approximately $10.5 million will be paid in future periods.

Components of the restructuring charges are as follows (in thousands):

	Balance December 31, 2003		Activity in 2004		Balance March 31, 2004
Costs to vacate facilities	$	14,960	$	1,122	$	13,838
Workforce reduction costs		1,756		135		1,621
Information technology costs		613		196		417
	$	17,329	$	1,453	$	15,876

5.    Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended March 31
	2004			2003
Numerator:
Loss	$	(106,603	)	$	(8,723	)
Denominator:
Denominator for basic and diluted earnings per share-weighted-average shares		77,285			76,778
Loss per share—basic	$	(1.38	)	$	(0.11	)
Loss per share—diluted	$	(1.38	)	$	(0.11	)

The diluted share base for the first three months of 2004 and 2003, where the numerator represents a loss, excludes incremental weighted shares for the effect of dilutive securities due to their antidilutive effect.

6.    Comprehensive Income

The following table sets forth the Company’s comprehensive income (loss) (in thousands):

	Three Months Ended March 31
	2004			2003
Net loss	$	(106,603	)	$	(8,723	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(1,213	)		14,544
Derivatives qualifying as hedges, net of tax					1,363
Comprehensive income (loss)	$	(107,816	)	$	7,184

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7.    Segment Information

Beginning in the first quarter of 2004, the Company has two operating segments: general rentals and traffic control. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The general rentals segment’s customers include construction and industrial companies, manufacturers, utilities, municipalities and homeowners. The general rentals segment operates throughout the United States, Canada and Mexico. The traffic control segment includes the rental of equipment for controlling traffic and related services and activities. The traffic control segment’s customers include construction companies involved in infrastructure projects and municipalities. The traffic control segment operates in the United States. In the tables below, the Company has restated its segment information for prior periods to reflect the change in operating segments. The new segments align the Company’s external segment reporting to how management evaluates and allocates resources and provide more transparent disclosure to the Company’s investors. The Company evaluates segment performance based on segment operating income. The change in segments was attributable to a change in the role of the chief operating decision maker as defined in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”.

The accounting policies of the Company’s segments are the same as those described in the summary of significant accounting policies in note 2 to the Company’s 2003 Annual Report on Form 10-K. Certain corporate costs, including those related to selling, finance, legal, risk management, human resources, corporate management and information technology systems, are deemed to be of an operating nature and are allocated to each of the operating segments.

The following table sets forth financial information by operating segment (in thousands):

	Three Months Ended March 31
	2004			2003
Total Revenues
General rentals	$	599,328		$	538,712
Traffic control		45,385			53,139
Total revenues	$	644,713		$	591,851
Total Depreciation and Amortization Expense
General rentals	$	100,654		$	91,083
Traffic control		6,541			6,638
Total depreciation and amortization expense	$	107,195		$	97,721
Segment Operating Income (Loss)
General rentals	$	53,651		$	48,668
Traffic control		(13,783	)		(8,418	)
Segment operating income	$	39,868		$	40,250
Total Capital Expenditures
General rentals	$	168,188		$	108,903
Traffic control		3,037			2,481
Total capital expenditures	$	171,225		$	111,384

	March 31, 2004		December 31, 2003
Total Assets
General rentals	$	4,470,666	$	4,348,012
Traffic control		348,631		374,129
Total assets	$	4,819,297	$	4,722,141

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth a reconciliation between segment operating income and loss before income taxes (in thousands):

	Three Months Ended March 31
	2004			2003
Segment operating income	$	39,868		$	40,250
Vesting of restricted shares granted in 2001 (included in selling, general and administrative expenses)		6,981
Operating income		32,887			40,250
Interest expense		45,942			50,975
Interest expense—subordinated convertible debentures		3,627
Preferred dividends of a subsidiary trust					3,681
Other (income) expense, net		160,902			(106	)
Loss before benefit for income taxes	$	(177,584	)	$	(14,300	)

8.    Financing Transactions

Debt consists of the following:

	March 31 2004		December 31 2003
	(In thousands)
Credit Facility, interest payable at a weighted average rate of 4.6% at March 31,2004 and 5.3% at December 31, 2003	$	93,895	$	52,592
Term Loan, interest payable at 3.4% and at 4.2% at March 31,2004 and December 31, 2003, respectively		550,000		639,033
6½% Senior Notes, interest payable semi-annually		1,000,000
7% Senior Subordinated Notes, interest payable semi-annually		375,000
9¼% Senior Subordinated Notes, interest payable semi-annually				300,000
9% Senior Subordinated Notes, interest payable semi-annually		250,000		250,000
7¾% Senior Subordinated Notes, interest payable semi-annually		525,000		525,000
10¾% Senior Notes, interest payable semi-annually		15,162		860,934
1 7/8% Convertible Senior Subordinated Notes, interest payable semi-annually		143,750		143,750
Other debt, including capital leases, due through 2009		53,382		45,779
	$	3,006,189	$	2,817,088

The Company refinanced approximately $2.1 billion of its debt in 2004. As part of this refinancing, the Company:

• obtained a new senior secured credit facility to replace the senior secured credit facility the Company previously had in place;

• sold $1 billion of 6 ¹/2% Senior Notes Due 2012;

• sold $375 million of 7% Senior Subordinated Notes Due 2014;

• repaid $639 million of term loans and $52 million of borrowings that were outstanding under the old credit facility;

• repurchased $845 million principal amount of the Company’s 10 ³/4% Senior Notes Due 2008 (the “10 ³/4% Notes”), pursuant to a tender offer;

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• redeemed $300 million principal amount of the Company’s outstanding 9 ¹/4% Senior Subordinated Notes Due 2009 (the “9 ¹/4% Notes”); and

• redeemed $250 million principal amount of the Company’s outstanding 9% Senior Subordinated Notes Due 2009 (the “9% Notes”).

The refinancing described above was completed during the first quarter of 2004, except that (i) the redemption of the 9% Notes was completed on April 1, 2004 and (ii) a portion of the term loan that is part of the new senior secured credit facility was drawn on April 1, 2004.

In connection with the refinancings in the first quarter of 2004, the Company incurred aggregate pre-tax charges of approximately $161 million in the first quarter and expects to incur additional charges of approximately $11 million in the second quarter. These charges are attributable primarily to (i) the redemption and tender premiums for notes redeemed or repurchased as part of the refinancing and (ii) the write-off of previously capitalized costs relating to the debt refinanced. These charges were recorded in other (income) expense, net.

7% Senior Subordinated Notes.    In January 2004, as part of the refinancing in 2004 described above, URI issued $375 million aggregate principal amount of 7% Senior Subordinated Notes (the “7% Notes”) which are due February 15, 2014. The net proceeds from the sale of the 7% Notes were approximately $369 million (after deducting the initial purchasers’ discount and offering expenses). The 7% Notes are unsecured and are guaranteed by Holdings and, subject to limited exceptions, URI’s domestic subsidiaries. The 7% Notes mature on February 15, 2014 and may be redeemed by URI on or after February 15, 2009, at specified redemption prices that range from 103.5% in 2009 to 100.0% in 2012 and thereafter. In addition, on or prior to February 15, 2007, URI may, at its option, use the proceeds of a public equity offering to redeem up to 35% of the outstanding 7% Notes at a redemption price of 107.0%. The indenture governing the 7% Notes contains certain restrictive covenants, including limitations on (i) additional indebtedness, (ii) restricted payments, (iii) liens, (iv) dividends and other payments, (v) preferred stock of certain subsidiaries, (vi) transactions with affiliates, (vii) the disposition of proceeds of asset sales and (viii) the Company’s ability to consolidate, merge or sell all or substantially all of its assets.

6 ¹/2% Senior Notes.    In February 2004, as part of the refinancing in 2004 described above, URI issued $1 billion aggregate principal amount of 6 ¹/2% Senior Notes (the “6 ¹/2% Notes”) which are due February 15, 2012. The net proceeds from the sale of the 6 ¹/2% Notes were approximately $984 million (after deducting the initial purchasers’ discount and offering expenses). The 6 ¹/2% Notes are unsecured and are guaranteed by Holdings and, subject to limited exceptions, URI’s domestic subsidiaries. The 6 ¹/2% Notes mature on February 15, 2012 and may be redeemed by URI on or after February 15, 2008, at specified redemption prices that range from 103.25% in 2008 to 100.0% in 2010 and thereafter. In addition, on or prior to February 15, 2007, URI may, at its option, use the proceeds of a public equity offering to redeem up to 35% of the outstanding 6 ¹/2% Notes at a redemption price of 106.5%. The indenture governing the 6 ¹/2% Notes contains certain restrictive covenants, including limitations on (i) additional indebtedness, (ii) restricted payments, (iii) liens, (iv) dividends and other payments, (v) preferred stock of certain subsidiaries, (vi) transactions with affiliates, (vii) the disposition of proceeds of asset sales, (viii) the Company’s ability to consolidate, merge or sell all or substantially all of its assets and (ix) sale-leaseback transactions.

New Credit Facility.    In the first quarter of 2004, as part of the refinancing in 2004 described above, the Company obtained a new senior secured credit facility. The new facility includes (i) a $650 million revolving credit facility, (ii) a $150 million institutional letter of credit facility and (iii) a $750 million term loan. The revolving credit facility, institutional letter of credit facility and term loan are governed by the same credit agreement. Set forth below is certain additional information concerning the revolving credit facility, institutional letter of credit facility and term loan.

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UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revolving Credit Facility.    The revolving credit facility enables URI to borrow up to $650 million on a revolving basis and enables certain of the Company’s Canadian subsidiaries to borrow up to $150 million (provided that the aggregate borrowings of URI and the Canadian subsidiaries may not exceed $650 million). A portion of the revolving credit facility, up to $250 million, is available in the form of letters of credit. The revolving credit facility is scheduled to mature and terminate in February 2009. As of March 31, 2004, the outstanding borrowings under this facility was approximately $94 million and the face amount of undrawn letters of credit obtained under this facility was approximately $44 million.

Institutional Letter of Credit Facility (“ILCF”).    The ILCF provides for up to $150 million in letters of credit. The ILCF is in addition to the letter of credit capacity under the revolving credit facility. The total combined letter of credit capacity under the revolving credit facility and the ILCF is $400 million. Subject to certain conditions, all or part of the ILCF may be converted into term loans. The ILCF is scheduled to terminate in February 2011.

Term Loan.    The term loan was obtained in two draws. An initial draw of $550 million was obtained upon the closing of the credit facility in February 2004 and an additional $200 million was obtained on April 1, 2004. Amounts repaid in respect of the term loan may not be reborrowed.

The term loan must be repaid in installments as follows: (i) during the period from and including June 30, 2004 to and including March 31, 2010, URI must repay on each March 31, June 30, September 30 and December 31 of each year an amount equal to one-fourth of 1% of the original aggregate principal amount of the term loan and (ii) URI must repay on each of June 30, 2010, September 30, 2010, December 31, 2010, and February 14, 2011 an amount equal to 23.5% of the original aggregate principal amount of the term loan.

Interest.    Borrowings by URI under the revolving credit facility accrue interest, at URI’s option, at either (A) the ABR rate (which is equal to the greater of (i) the Federal Funds Rate plus 0.5% and (ii) JPMorgan Chase Bank’s prime rate) plus a margin of 1.25%, or (B) an adjusted LIBOR rate plus a margin of 2.25%. The above interest rate margins are adjusted quarterly based on the Company’s Funded Debt to Cash Flow Ratio, up to the maximum margins described in the preceding sentence and down to minimum margins of 0.75% and 1.75% for revolving loans based on the ABR rate and the adjusted LIBOR rate, respectively.

Canadian dollar borrowings under the revolving credit facility accrue interest, at the borrower’s option, at either (A) the Canadian prime rate (which is equal to the greater of (i) the CDOR rate plus 1% and (ii) JPMorgan Chase Bank, Toronto Branch’s prime rate) plus a margin of 1.25%, or (B) the B/A rate (which is equal to JPMorgan Chase Bank, Toronto Branch’s B/A rate) plus a margin of 2.25%. These above interest rate margins are adjusted quarterly based on the Company’s Funded Debt to Cash Flow Ratio, up to the maximum margins described in the preceding sentence and down to minimum margins of 0.75% and 1.75% for revolving loans based on the Canadian prime rate and the B/A rate, respectively.

URI is also required to pay the lenders a commitment fee equal to 0.5% per annum in respect of undrawn commitments under the revolving credit facility.

Borrowings under the term loan accrue interest, at URI’s option, at either (a) the ABR rate (which is equal to the greater of (i) the Federal Funds Rate plus 0.5% and (ii) JPMorgan Chase Bank’s prime rate) plus a margin of 1.25%, or (b) an adjusted LIBOR rate plus a margin of 2.25% (which margins may be reduced to 1.00% and 2.00%, respectively, for certain periods based on our Funded Debt to Cash Flow Ratio).

If at any time an event of default under the credit agreement exists, the interest rate applicable to each revolving loan and term loan will be based on the highest margins described above plus 2%. URI is required to

20

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

pay a fee which accrues at the rate of 0.10% per annum on the amount of the ILCF. In addition, URI is required to pay participation fees and fronting fees in respect of letters of credit. For letters of credit obtained under the ILCF, these fees accrue at the rate of 2.25% and 0.25% per annum, respectively.

Covenants.    Under the agreement governing the Company’s senior secured credit facility, the Company is required to, among other things, satisfy certain financial tests relating to: (a) interest coverage ratio, (b) the ratio of funded debt to cash flow, (c) the ratio of senior secured debt to tangible assets and (d) the ratio of senior secured debt to cash flow. If the Company is unable to satisfy any of these covenants, the lenders could elect to terminate the credit facility and require the Company to repay the outstanding borrowings under the credit facility. The Company is also subject to various other covenants under the agreements governing its credit facility and other indebtedness. These covenants limit or prohibit, among other things, the Company’s ability to incur indebtedness, make prepayments of certain indebtedness, pay dividends, make investments, create liens, make acquisitions, sell assets and engage in mergers and acquisitions.

Interest Rate Swap Agreements.    As of March 31, 2004, the Company had swap agreements with an aggregate notional amount of $1,345 million. The effect of these agreements was to convert $1,345 million of the Company’s fixed rate notes to floating rate instruments. The fixed rate notes converted consist of: (i) $445 million of our 6 ¹/2% senior notes through 2012, (ii) $525 million of our 7 ³/4% senior subordinated notes through 2013 and (iii) $375 million of our 7% senior subordinated notes through 2014. The Company’s swap agreements that convert its fixed rate notes to floating rate instruments are designated as fair value hedges. Changes in the fair values of the Company’s fair value hedges, as well as the offsetting fair value changes in the hedged items, are recorded on the statement of operations. There was no ineffectiveness related to the Company’s hedges.

9.    Restricted Stock and Operating Leases

Restricted Stock

The Company has granted to employees other than executive officers and directors approximately 900,000 shares of restricted stock that contain the following provisions. The shares vest in 2005, 2006 or 2007 or earlier upon a change in control of the Company, death, disability, retirement or certain terminations of employment, and are subject to forfeiture prior to vesting on certain other terminations of employment, the violation of non-compete provisions and certain other events. If a holder of restricted stock sells his stock and receives sales proceeds that are less than a specified guaranteed amount set forth in the grant instrument, the Company has agreed to pay the holder the shortfall between the amount received and such specified amount. However, the foregoing only applies to sales that are made within five trading days of the vesting date. The specified guaranteed amount is (i) $27.26 per share with respect to approximately 300,000 shares scheduled to vest in 2005, (ii) $9.18 per share with respect to approximately 400,000 shares scheduled to vest in 2006 and (iii) $17.20 per share with respect to approximately 200,000 shares scheduled to vest in 2007.

Operating Leases

As part of certain of its equipment operating leases, the Company guarantees that the value of the equipment at the end of the lease term will not be less than a specified projected residual value. The use of these guarantees helps to lower the Company’s monthly operating lease payments. The Company does not know at this time the extent to which the actual residual values may be less than the guaranteed residual values and, accordingly, cannot quantify the amount that it will be required to pay, if any, under these guarantees. If the actual residual value for all equipment subject to such guarantees were to be zero, then the Company’s maximum potential liability under these guarantees would be approximately $39.2 million. In accordance with FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” this potential liability was not reflected on the Company’s balance sheet as of March 31, 2004, or any prior date because the leases associated with such guarantees were entered into prior to January 1, 2003.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10.    Condensed Consolidating Financial Information of Guarantor Subsidiaries

URI, a wholly owned subsidiary of Holdings (the “Parent”), has outstanding (i) certain indebtedness that is guaranteed by the Parent and (ii) certain indebtedness that is guaranteed by both Parent and substantially all of URI’s United States subsidiaries (the “guarantor subsidiaries”). However, this indebtedness is not guaranteed by URI’s foreign subsidiaries (the “non-guarantor subsidiaries”) and certain of its United States subsidiaries. The guarantor subsidiaries are all 100%-owned and the guarantees are made on a joint and several basis and are full and unconditional (subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information as of March 31, 2004 and December 31, 2003, and for each of the three month periods ended March 31, 2004 and 2003, are presented. The condensed consolidating financial information of the Company and its subsidiaries are as follows:

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2004

	Parent			URI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Other and Eliminations			Consolidated Total
	(In thousands)
ASSETS
Cash and cash equivalents				$	70,509		$	48,873		$	7,762					$	127,144
Accounts receivable, net								412,853			35,592						448,445
Intercompany receivable (payable)					610,621			(469,173	)		(141,448	)
Inventory					44,217			63,354			6,569						114,140
Prepaid expenses and other assets					37,599			79,211			1,388						118,198
Rental equipment, net					1,165,128			768,815			187,382						2,121,325
Property and equipment, net	$	24,841			119,509			248,530			21,504						414,384
Investment in subsidiaries		1,243,202			2,068,473								$	(3,303,606	)		8,069
Intangible assets, net					196,132			1,164,641			106,819						1,467,592
	$	1,268,043		$	4,312,188		$	2,317,104		$	225,568		$	(3,303,606	)	$	4,819,297
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Accounts payable				$	62,264		$	163,132		$	14,598					$	239,994
Debt					2,906,377			5,917			93,895						3,006,189
Subordinated convertible debentures	$	221,550															221,550
Deferred taxes					75,554			(805	)		23,322						98,071
Accrued expenses and other liabilities					124,386			125,292			5,539		$	(48,217	)		207,000
Total liabilities		221,550			3,168,581			293,536			137,354			(48,217	)		3,772,804
Commitments and contingencies
Stockholders’ equity:
Preferred stock		5															5
Common stock		773															773
Additional paid-in capital		1,333,527			1,566,668			1,906,194			68,395			(3,541,257	)		1,333,527
Deferred compensation		(15,795	)														(15,795	)
(Accumulated deficit) retained earnings		(295,903	)		(423,061	)		117,374			(4,067	)		309,754			(295,903	)
Accumulated other comprehensive income		23,886									23,886			(23,886	)		23,886
Total stockholders’ equity		1,046,493			1,143,607			2,023,568			88,214			(3,255,389	)		1,046,493
	$	1,268,043		$	4,312,188		$	2,317,104		$	225,568		$	(3,303,606	)	$	4,819,297

22

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2003

	Parent			URI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Other and Eliminations			Consolidated Total
	(In thousands)
ASSETS
Cash and cash equivalents				$	42,066		$	32,339		$	5,044					$	79,449
Accounts receivable, net					14,198			445,984			39,251						499,433
Intercompany receivable (payable)					434,759			(303,585	)		(131,174	)
Inventory					43,683			55,910			6,394						105,987
Prepaid expenses and other assets					32,981			73,648			3,363						109,992
Rental equipment, net					1,242,652			672,497			156,343						2,071,492
Property and equipment, net	$	25,256			109,831			253,814			17,700						406,601
Investment in subsidiaries		1,337,169			2,066,111								$	(3,395,127	)		8,153
Intangible assets, net					315,419			1,045,990			79,625						1,441,034
	$	1,362,425		$	4,301,700		$	2,276,597		$	176,546		$	(3,395,127	)	$	4,722,141
LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Accounts payable				$	32,529		$	106,814		$	11,453					$	150,796
Debt					2,758,417			6,079			52,592						2,817,088
Subordinated convertible debentures	$	221,550															221,550
Deferred taxes					151,410			(805	)		14,447						165,052
Accrued expenses and other liabilities					112,137			145,200			6,730		$	(37,287	)		226,780
Total liabilities		221,550			3,054,493			257,288			85,222			(37,287	)		3,581,266
Commitments and contingencies
Stockholders’ equity:
Preferred stock		5															5
Common stock		771															771
Additional paid-in capital		1,329,946			1,563,512			1,903,038			68,395			(3,534,945	)		1,329,946
Deferred compensation		(25,646	)														(25,646	)
(Accumulated deficit) retained earnings		(189,300	)		(316,305	)		116,271			(2,170	)		202,204			(189,300	)
Accumulated other comprehensive income		25,099									25,099			(25,099	)		25,099
Total stockholders’ equity		1,140,875			1,247,207			2,019,309			91,324			(3,357,840	)		1,140,875
	$	1,362,425		$	4,301,700		$	2,276,597		$	176,546		$	(3,395,127	)	$	4,722,141

23

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

	For the Three Months Ended March 31, 2004
	Parent			URI			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Other and Eliminations			Consolidated Total
Revenues:
Equipment rentals				$	217,565		$	218,554		$	31,149					$	467,268
Sales of rental equipment					26,935			23,993			4,470						55,398
Sales of equipment and contractor supplies and other revenues					61,096			49,591			11,360						122,047
Total revenues					305,596			292,138			46,979						644,713
Cost of revenues:
Cost of equipment rentals, excluding depreciation					110,135			137,098			17,547						264,780
Depreciation of rental equipment					44,318			38,843			7,597						90,758
Cost of rental equipment sales					18,371			16,528			2,532						37,431
Cost of equipment and contractor supplies sales and other operating costs					42,132			37,238			8,278						87,648
Total cost of revenues					214,956			229,707			35,954						480,617
Gross profit					90,640			62,431			11,025						164,096
Selling, general and administrative expenses					49,586			56,218			8,968						114,772
Non-rental depreciation and amortization	$	1,999			6,684			6,904			850						16,437
Operating income (loss)		(1,999	)		34,370			(691	)		1,207						32,887
Interest expense		3,627			44,407			623			912		$	(3,627	)		45,942
Interest expense—subordinated convertible debentures														3,627			3,627
Other (income) expense, net					160,800			(2,417	)		2,519						160,902
Income (loss) before benefit for income taxes		(5,626	)		(170,837	)		1,103			(2,224	)					(177,584	)
Benefit for income taxes		(2,152	)		(68,502	)					(327	)					(70,981	)
Income (loss) before equity in net loss of subsidiaries		(3,474	)		(102,335	)		1,103			(1,897	)					(106,603	)
Equity in net loss of subsidiaries		(103,129	)		(794	)								103,923
Net income (loss)	$	(106,603	)	$	(103,129	)	$	1,103		$	(1,897	)	$	103,923		$	(106,603	)

24

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

	For the Three Months Ended March 31, 2003
	Parent			URI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Other and Eliminations			Consolidated Total
Revenues:
Equipment rentals				$	200,718		$	217,140		$	25,790				$	443,648
Sales of rental equipment					16,293			15,915			2,872					35,080
Sales of equipment and contractor supplies and other revenues					53,832			50,994			8,297					113,123
Total revenues					270,843			284,049			36,959					591,851
Cost of revenues:
Cost of equipment rentals, excluding depreciation					105,009			132,803			14,592					252,404
Depreciation of rental equipment					38,969			35,651			6,123					80,743
Cost of rental equipment sales					10,737			10,919			1,599					23,255
Cost of equipment and contractor supplies sales and other operating costs					38,782			36,490			6,188					81,460
Total cost of revenues					193,497			215,863			28,502					437,862
Gross profit					77,346			68,186			8,457					153,989
Selling, general and administrative expenses					45,117			45,000			6,644					96,761
Non-rental depreciation and amortization	$	2,450			7,360			6,372			713	$	83			16,978
Operating income (loss)		(2,450	)		24,869			16,814			1,100		(83	)		40,250
Interest expense		3,681			50,137			11			827		(3,681	)		50,975
Preferred dividends of a subsidiary trust													3,681			3,681
Other (income) expense, net					3,205			(3,535	)		224					(106	)
Income (loss) before provision (benefit) for income taxes		(6,131	)		(28,473	)		20,338			49		(83	)		(14,300	)
Provision (benefit) for income taxes		(2,391	)		(11,104	)		7,932			18		(32	)		(5,577	)
Income (loss) before equity in net earnings of subsidiaries		(3,740	)		(17,369	)		12,406			31		(51	)		(8,723	)
Equity in net loss of subsidiaries		(4,932	)		12,437								(7,505	)
Net income (loss)	$	(8,672	)	$	(4,932	)	$	12,406		$	31	$	(7,556	)	$	(8,723	)

25

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

	For the Three Months Ended March 31, 2004
	Parent			URI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Other and Eliminations			Consolidated
	(In thousands)
Net cash provided by (used in) operating activities	$	(2,261	)	$	135,282		$	39,924		$	29,576					$	202,521
Cash flows from investing activities:
Purchases of rental equipment					(95,512	)		(44,007	)		(13,008	)					(152,527	)
Purchases of property and equipment		(1,366	)		(13,782	)		(3,234	)		(316	)					(18,698	)
Proceeds from sales of rental equipment					26,935			23,993			4,470						55,398
Capital contributed to subsidiary		(3,156	)										$	3,156
Purchases of other companies											(60,738	)					(60,738	)
Net cash used in investing activities		(4,522	)		(82,359	)		(23,248	)		(69,592	)		3,156			(176,565	)
Cash flows from financing activities:
Proceeds from debt					1,936,617						41,986						1,978,603
Payments of debt					(1,926,931	)		(142	)								(1,927,073	)
Payments of financing costs					(33,695	)											(33,695	)
Capital contributions by parent					3,156									(3,156	)
Dividend distributions to parent					(3,627	)								3,627
Proceeds from the exercise of common stock options and warrants		3,156															3,156
Proceeds from dividends from subsidiary		3,627												(3,627	)
Net cash provided by (used in) financing activities		6,783			(24,480	)		(142	)		41,986			(3,156	)		20,991
Effect of foreign exchange rates											748						748
Net increase in cash and cash equivalents					28,443			16,534			2,718						47,695
Cash and cash equivalents at beginning of period					42,066			32,339			5,044						79,449
Cash and cash equivalents at end of period				$	70,509		$	48,873		$	7,762					$	127,144
Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,600		$	47,105		$	599		$	903					$	52,207
Cash paid for income taxes, net of refunds				$	(381	)				$	437					$	56
Supplemental disclosure of non-cash investing and financing activities:
The Company acquired the net assets and assumed certain liabilities of other companies as follows:
Assets, net of cash acquired										$	66,078					$	66,078
Liabilities assumed											(5,788	)					(5,788	)
											60,290						60,290
Due to seller and other payments											448						448
Net cash paid										$	60,738					$	60,738

26

UNITED RENTALS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

	For the Three Months Ended March 31, 2003
	Parent			URI			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Other and Eliminations			Consolidated
	(In thousands)
Net cash provided by (used in) operating activities	$	(1,842	)	$	59,691		$	23,375		$	1,430					$	82,654
Cash flows from investing activities:
Purchases of rental equipment					(70,048	)		(22,996	)		(9,455	)					(102,499	)
Purchases of property and equipment		(1,839	)		(2,027	)		(4,580	)		(439	)					(8,885	)
Proceeds from sales of rental equipment					16,293			15,915			2,872						35,080
Purchases of other companies					(4,162	)											(4,162	)
Deposits on rental equipment purchases					(13,422	)											(13,422	)
Net cash used in investing activities		(1,839	)		(73,366	)		(11,661	)		(7,022	)					(93,888	)
Cash flows from financing activities:
Proceeds from debt					19,500												19,500
Payments of debt					(1,554	)		(163	)		(1,324	)					(3,041	)
Payments of financing costs					(590	)											(590	)
Dividend distributions to parent					(3,681	)							$	3,681
Proceeds from dividends from subsidiary		3,681												(3,681	)
Net cash provided by (used in) financing activities		3,681			13,675			(163	)		(1,324	)					15,869
Effect of foreign exchange rates											9,062						9,062
Net increase in cash and cash equivalents								11,551			2,146						13,697
Cash and cash equivalents at beginning of period								16,908			2,323						19,231
Cash and cash equivalents at end of period							$	28,459		$	4,469					$	32,928
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,602		$	34,324		$	202		$	844					$	39,972
Cash paid for income taxes, net of refunds				$	(91	)				$	451					$	360
Supplemental disclosure of non-cash investing and financing activities:
The Company acquired the net assets and assumed certain liabilities of other companies as follows:
Assets, net of cash acquired				$	3,314											$	3,314
Liabilities assumed					(50	)											(50	)
					3,264												3,264
Due to seller and other payments					898												898
Net cash paid				$	4,162											$	4,162

27

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion reviews our operations for the three months ended March 31, 2004 and 2003 and should be read in conjunction with the unaudited consolidated financial statements and related notes included herein and the consolidated financial statements and related notes included in our 2003 Annual Report on Form 10-K.

General

United Rentals is the largest equipment rental company in North America. Our revenues are divided into three categories:

• Equipment rentals—This category principally includes our revenues from the following sources: (i) equipment rental, (ii) fees related to equipment rental such as those for equipment delivery, fuel, repair of rental equipment and damage waivers and (iii) specialized services that we provide in connection with the rental of traffic control equipment.

• Sales of rental equipment—This category includes our revenues from the sale of used rental equipment.

• Sales of equipment and contractor supplies and other revenues—This category principally includes our revenues from the following sources: (i) the sale of new equipment, (ii) the sale of contractor supplies, (iii) repair services and the sale of parts for equipment owned by customers and (iv) the operations of our subsidiary that develops and markets software for use by equipment rental companies in managing and operating multiple branch locations.

Our cost of operations consists primarily of: (i) depreciation costs relating to the rental equipment that we own and lease payments for the rental equipment that we hold under operating leases, (ii) the cost of repairing and maintaining rental equipment, (iii) the cost of the items that we sell including new and used equipment and related parts, merchandise and supplies and (iv) personnel costs, occupancy costs and supply costs.

We record rental equipment expenditures at cost and depreciate equipment using the straight-line method over the estimated useful life (which ranges from two to ten years), after giving effect to an estimated salvage value of 0% to 10% of cost.

Selling, general and administrative expenses primarily include sales commissions and salaries, bad debt expense, advertising and marketing expenses, management salaries, and clerical and administrative overhead.

Non-rental depreciation and amortization includes (i) depreciation expense associated with equipment that is not offered for rent (such as vehicles, computers and office equipment) and amortization expense associated with leasehold improvements, (ii) the amortization of deferred financing costs and (iii) the amortization of other intangible assets. Our other intangible assets consist of non-compete agreements.

We completed acquisitions in each of 2004 and 2003. See note 2 to our notes to unaudited consolidated financial statements included elsewhere in this Report. In view of the fact that our operating results for these years were affected by acquisitions, we believe that our results for these periods are not directly comparable.

Goodwill and Other Intangible Assets

Pursuant to an accounting standard adopted in 2002, we no longer amortize goodwill. Instead, we are required to periodically review our goodwill for impairment. In general, this means that we must determine whether the fair value of the goodwill, calculated in accordance with applicable accounting standards, is at least equal to the recorded value shown on our balance sheet. If the fair value of the goodwill is less than the recorded value, we are required to write off the excess goodwill as an expense. Our other intangible assets continue to be amortized over their estimated useful lives.

28

We are generally required to review our goodwill for impairment annually. However, if events or circumstances suggest that our goodwill could be impaired, then impairment testing may be required before the scheduled annual impairment test. Our next scheduled annual impairment test will be as of October 1, 2004. Over the past two years we have recorded significant goodwill write-offs, and we may require additional write-offs in the future. If we continue to see weakness in our end markets, the likelihood of possible additional write-offs would increase. Future goodwill write-offs, if required, may have a material adverse effect on our results.

Restructuring Plans in 2001 and 2002

We adopted a restructuring plan in April 2001 and a second restructuring plan in October 2002 as described below. In connection with these plans, we recorded a restructuring charge of $28.9 million in 2001 and $28.3 million in the fourth quarter of 2002.

The 2001 plan involved the following principal elements: (i) 31 underperforming branches and five administrative offices were closed or consolidated with other locations, (ii) the reduction of our workforce by 489 through the termination of branch and administrative personnel, and (iii) certain information technology hardware and software was no longer used.

The 2002 plan involved the following principal elements: (i) 40 underperforming branches and five administrative offices were closed or consolidated with other locations; (ii) the reduction of our workforce by 412 through the termination of branch and administrative personnel, and (iii) a certain information technology project was abandoned.

Components of the restructuring charges are as follows (in thousands):

	Balance December 31, 2003(1)		Activity in 2004(2)		Balance March 31, 2004(3)
Costs to vacate facilities(4)	$	14,960	$	1,122	$	13,838
Workforce reduction costs(5)		1,756		135		1,621
Information technology costs(6)		613		196		417
	$	17,329	$	1,453	$	15,876

(1) Represents the aggregate balance of the 2001 and 2002 charges that had not been utilized as of December 31, 2003.

(2) Activity in 2004 represents primarily cash payments.

(3) Represents the aggregate balance of the 2001 and 2002 charges that had not been utilized as of March 31, 2004.

(4) Represents primarily (i) payment of obligations under leases offset by estimated sublease opportunities and (ii) the write-off of capital improvements made to such facilities.

(5) Represents primarily severance.

(6) Represents primarily the abandonment of certain information technology projects and the payment of obligations under equipment leases relating to such projects.

As indicated in the table above, the aggregate balance of the 2001 and 2002 charges was $15.9 million as of March 31, 2004 consisting of $0.7 million for the 2001 charge and $15.2 million for the 2002 charge. We estimate that approximately $5.4 million of the remaining 2001 and 2002 charges will be paid by December 31, 2004 and approximately $10.5 million in future periods. These payments will not affect our future earnings because the charges associated with these payments have already been recorded in our 2001 or 2002 results. We expect to make these payments with cash from our operations.

29

Charges Related to Debt Refinancings and Vesting of Restricted Stock

During 2004, we refinanced approximately $2.1 billion of our debt. See “—Liquidity and Capital Resources—Recent Financing Transactions.” In connection with the foregoing, we recorded aggregate pre-tax charges in the first quarter of $161.1 million ($95.2 million, net of tax) attributable primarily to (i) the redemption and tender premiums for notes redeemed and tendered as part of the refinancing and (ii) the write-off of previously capitalized costs relating to the debt refinanced. These charges were recorded in other (income) expense, net. We expect to incur additional charges of approximately $11.0 million during the second quarter in connection with the refinancing.

We incurred a pre-tax non-cash charge of $7.0 million ($5.5 million, net of tax) in the first quarter of 2004 due to the vesting of restricted shares granted to senior executives in 2001. This charge represents the remaining unamortized portion of the deferred compensation charge associated with the award of such shares.

Information Concerning Segments

We currently have two business segments: general rentals and traffic control. The general rentals segment includes all aspects of our business, other than the rental of traffic control equipment and related services and activities. That portion of our business forms the separate traffic control segment. Commencing with this Report on Form 10-Q, we will provide certain operating and other data concerning our segments. Data for periods prior to the first quarter of 2004 have been reclassified to conform to the current organization of our segments.

30

The following table shows certain results of our segments for the three months ended March 31, 2004 and 2003 (in millions):

	Three Months Ended March 31
	2004			2003
General Rentals Segment
Revenues
Equipment rentals	$	427.5		$	397.4
Sales of rental equipment		54.7			35.1
Sales of equipment and contractor supplies and other revenues		117.2			106.3
Total revenues		599.3			538.8
Cost of revenues
Cost of equipment rentals, excluding depreciation		227.1			212.0
Depreciation of rental equipment		84.5			74.5
Cost of rental equipment sales		37.0			23.3
Cost of equipment and contractor supplies sales and other operating expenses		84.7			77.5
Total cost of revenues		433.4			387.3
Gross profit		165.9			151.4
Selling, general and administrative expenses		96.1			86.2
Non-rental depreciation and amortization		16.2			16.6
Segment operating income	$	53.7		$	48.7
Traffic Control Segment
Revenues
Equipment rentals	$	39.8		$	46.3
Sales of rental equipment		0.7
Sales of equipment and contractor supplies and other revenues		4.9			6.9
Total revenues		45.4			53.1
Cost of revenues
Cost of equipment rentals, excluding depreciation		37.7			40.4
Depreciation of rental equipment		6.3			6.2
Cost of rental equipment sales		0.4
Cost of equipment and contractor supplies sales and other operating expenses		2.9			3.9
Total cost of revenues		47.2			50.6
Gross profit		(1.9	)		2.6
Selling, general and administrative expenses		11.6			10.6
Non-rental depreciation and amortization		0.3			0.4
Segment operating income	$	(13.8	)	$	(8.4	)
Consolidated Results
General rentals segment operating income	$	53.7		$	48.7
Traffic control segment operating income (loss)		(13.8	)		(8.4	)
Vesting of restricted shares granted to executives in 2001(1)		(7.0	)
Operating income		32.9			40.2
Interest expense		45.9			51.0
Interest expense—subordinated convertible debentures		3.6
Preferred dividends of a subsidiary trust					3.7
Other (income) expense, net		160.9			(0.1	)
Loss before benefit for income taxes		(177.6	)		(14.3	)
Benefit for income taxes		(71.0	)		(5.6	)
Net loss	$	(106.6	)	$	(8.7	)

(1) Represents the vesting of restricted shares granted to executives in 2001. See “—Charges Relating to Debt Refinancing and Vesting of Restricted Stock.” This charge has not been allocated to either segment.

Columns may not add due to rounding

31

Discussion of Results

Generally Accepted Accounting Principles (“GAAP”) Results and Adjusted Results

Our results for the first three months of 2004 were impacted by (i) $161.1 million of charges ($95.2 million, net of tax) relating to a debt refinancing that we completed in the first quarter of 2004 and (ii) a $7.0 million charge ($5.5 million, net of tax) for the vesting of restricted stock granted to executives in 2001. Our operating income was also impacted by the charge related to the accelerated vesting of restricted stock. See “—Charges Related to Debt Refinancings and Vesting of Restricted Stock.”

The table below shows (i) our operating income and results in accordance with GAAP and (ii) our operating income and results adjusted to exclude the foregoing charges. We provide this adjusted data because we believe that this data may be useful to investors in analyzing the period-to-period changes in our results that are due to changes in business conditions.

	Three Months Ended March 31
	2004			2003
Operating income (GAAP)	$	32.9		$	40.2
Vesting of restricted shares granted to executives in 2001		7.0
Operating income, as adjusted	$	39.9		$	40.2
Net loss (GAAP)	$	(106.6	)	$	(8.7	)
Refinancing costs, net of tax		95.2
Vesting of restricted shares granted to executives in 2001, net of tax		5.5
Net loss, as adjusted	$	(5.9	)	$	(8.7	)

Overview of Adjusted Results

Our revenues in the first three months of 2004 increased 8.9% to $644.7 million from $591.9 million in the first three months of 2003. This increase in revenues, partially offset by higher cost of revenues, caused gross profit in the first three months of 2004 to increase 6.6% to $164.1 million from $154.0 million in the first three months of 2003. These increases were entirely attributable to our general rentals segment. At our traffic control segment, both revenues and gross profit declined partially offsetting the increases at the general rentals segment.

The increase in revenues at our general rentals segment reflected the following:

• We had a 7.6% increase in equipment rental revenues. This increase reflected an 8.5% increase in same-store rental revenues partially offset by revenues lost due to branch closings. The growth in same-store rental revenues was primarily driven by a 6.5% increase in rental rates.

• We also had a 55.8% increase in revenues from the sale of rental equipment, and a 10.3% increase in revenues from “sale of equipment and merchandise and other revenues.” The increase in the latter category primarily reflected a 34% increase in sales of contractor supplies.

Segment operating income at the general rentals segment increased to $53.7 million in the first three months of 2004 from $48.7 million in the first three months of 2003. This increase reflected the higher revenues and gross profit at this segment partially offset by higher selling, general and administrative expenses (“SG&A”). The increase in operating income at the general rentals segment was entirely offset by a widening of the loss at the traffic control segment due to lower revenues and, to a lesser extent, higher SG&A expense. The net effect was that total adjusted operating income in the first three months of 2004 was substantially the same as in the first three months of 2003—$39.9 million in the 2004 period versus $40.2 million in the 2003 period.

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Our total adjusted operating income excludes a charge described above relating to the vesting of restricted stock. After giving effect to this charge, we recorded operating income in accordance with GAAP of $32.9 million in the first three months of 2004 compared with $40.2 million in the first three months of 2003.

Our total interest expense decreased to $49.6 million in the first three months of 2004 from total interest expense and preferred dividends of a subsidiary trust of $54.7 million in the first three months of 2003. This decrease primarily reflected lower interest rates on our debt.

Our adjusted net loss for the first three months of 2004 was $5.9 million compared with a net loss of $8.7 million in the first three months of 2003. The decrease in the adjusted net loss in the 2004 period primarily reflected the lower interest expense.

The adjusted net loss excludes certain charges described above relating to debt refinancing and the vesting of restricted stock. After giving effect to these charges, we recorded a net loss in accordance with GAAP of $106.6 million in the first three months of 2004 compared with $8.7 million in the first three months of 2003.

Additional Information Concerning Results

Three Months Ended March 31, 2004 and 2003

Revenues

1.    General Rentals Segment Revenues.    Our general rentals segment had total revenues of $599.3 million in the first three months of 2004, an increase of 11.2% compared with $538.8 million in the first three months of 2003. The revenues from this segment accounted for 93.0% of our total revenues in the first three months of 2004 and 91.0% during the first three months of 2003. The components of this segment’s revenues are discussed below.

A.    Equipment Rentals.    Revenues from equipment rentals at the general rentals segment were $427.5 million in the first three months of 2004, an increase of 7.6% compared with revenues of $397.4 million in the first three months of 2003. These revenues accounted for 71.3% of the segment’s total revenues in the first three months of 2004 compared with 73.8% in the same period last year. Rental rates for this segment increased 6.5% during the first three months of 2004 compared with the same period last year.

The increase in rental revenues at this segment during the first three months of 2004 principally reflected the following:

• We increased rental revenues at locations open more than one year, or same store rental revenues, by approximately 8.5%. This increase primarily reflected the 6.5% increase in rental rates discussed above and a 2.0% increase in the net volume of rental activity. The volume increase was driven in part by the transfer to these locations of equipment that had previously been deployed at branches that were closed or consolidated.

• We lost revenues due to the closing or sale of branches and added revenues through acquisitions and start-ups. The net effect of these two factors was a loss of revenues that partially offset the increase in same store rental revenues.

B.    Sales of Rental Equipment.    Revenues from the sale of rental equipment at the general rentals segment were $54.7 million in the first three months of 2004, representing a 55.8% increase from $35.1

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million in the first three months of 2003. These revenues accounted for 9.1% of the segment’s total revenues in the first three months of 2004 compared with 6.5% in the same period last year. The increase in these revenues in 2004 primarily reflected an increase in the volume of equipment sold. Used equipment prices were up slightly.

C.    Sales of Equipment and Contractor Supplies and Other Revenues.    Revenues from “sales of equipment and contractor supplies and other revenues” at the general rentals segment were $117.2 million in the first three months of 2004, representing a 10.3% increase from $106.3 million in the first three months of 2003. These revenues accounted for 19.6% of the segment’s total revenues in the first three months of 2004 compared with 19.7% in the same period last year. The increase in these revenues in 2004 principally reflected a 34% increase in contractor supplies sales.

2.    Traffic Control Segment Revenues.    Our traffic control segment had total revenues of $45.4 million in the first three months of 2004, representing a decrease of 14.5% from $53.1 million in the first three months of 2003. The revenues from this segment accounted for 7.0% of our total revenues in the first three months of 2004 and 9.0% during the first three months of 2003. The components of this segment’s revenues are discussed below.

A.    Equipment Rentals.    Revenues from equipment rentals at the traffic control segment were $39.8 million in the first three months of 2004, representing a decrease of 14.0% from $46.3 million in the first three months of 2003. These revenues accounted for 87.7% of the segment’s total revenues in the first three months of 2004 and 87.2% in the same period last year. The decrease in rental revenues at this segment principally reflected an 11.7% decrease in same store revenues and, to a lesser extent, the closing of branches.

B.    Sales of Rental Equipment.    Revenues from the sale of rental equipment at the traffic control segment were $0.7 million in the first three months of 2004 and $0 in the first three months of 2003. These revenues accounted for 1.5% of the segment’s total revenues in the first three months of 2004 compared with 0% in the same period last year.

C.    Sales of Equipment and Contractor Supplies and Other Revenues.    Revenues from “sales of equipment and contractor supplies and other revenues” at the traffic control segment were $4.9 million in the first three months of 2004, representing a 29.0% decrease from $6.9 million in the first three months of 2003. These revenues accounted for 10.8% of the segment’s total revenues in the first three months of 2004 and 13.0% in the same period last year. The decrease in these revenues in 2004 principally reflected a decrease in the traffic control segment’s sales of contractor supplies.

3.    Total Consolidated Revenues.    We had total revenues of $644.7 million in the first three months of 2004, an increase of 8.9% compared with total revenues of $591.9 million in the first three months of 2003. The increase reflected the higher revenues at our general rentals segment partially offset by the lower revenues at our traffic control segment. Dollar equipment utilization for the first quarter of 2004 was 49.6%, an increase of 3.0 percentage points from the first quarter of 2003.

Gross Profit

1.    General Rentals Segment Gross Profit.    Our general rentals segment had total gross profit of $165.9 million in the first three months of 2004, an increase of 9.6% compared with $151.4 million in the first three months of 2003. This increase reflected the increase in revenues described above partially offset by the decrease in gross profit margin described below from equipment rental and sales of rental equipment. Information concerning gross profit margin of the general rentals segment by source of revenue is set forth below:

A.    Equipment Rentals.    The gross profit margin from equipment rental revenues was 27.1% in the first three months of 2004 and 27.9% in the first three months of 2003. The decrease in 2004 principally reflected cost increases which partially offset the increase in rental rates. The cost increases impacted several areas including repairs and maintenance, employee benefits and insurance.

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B.    Sales of Rental Equipment.    The gross profit margin from the sale of rental equipment was 32.3% in the first three months of 2004 and 33.7% in the first three months of 2003. The decrease in 2004 primarily reflected a shift in mix to the sale of more under-utilized and relatively older equipment in the 2004 period.

C.    Sales of Equipment and Contractor Supplies and Other Revenues.    The gross profit margin from “sales of equipment and contractor supplies and other revenues” was 27.7% in the first three months of 2004 and 27.1% in the first three months of 2003. The increase in gross profit margin in 2004 primarily reflected increased margins from the sale of contractor supplies.

2.    Traffic Control Segment Gross Profit (Loss).    Our traffic control segment had a gross loss of $1.9 million in the first three months of 2004 compared with a gross profit $2.6 million in the first three months of 2003. The gross loss in the first three months of 2004 primarily reflected the decrease in revenues from equipment rentals during the 2004 period. Although costs also decreased during the period, the decrease in costs was less than the decrease in revenues.

3.    Total Consolidated Gross Profit.    We had total gross profit of $164.1 million in the first three months of 2004, representing an increase of 6.6% from $154.0 million in the first three months of 2003. The increase reflected the higher gross profit at our general rentals segment partially offset by the gross loss at our traffic control segment.

Selling, General and Administrative Expense

1.    General Rentals Segment SG&A.    SG&A at our general rentals segment was $96.1 million, or 16.0% of total segment revenues, during the first three months of 2004 and $86.2 million, or 16.0% of total revenues, during the first three months of 2003. The increase in the dollar amount of SG&A in the 2004 period primarily reflected higher costs related to selling commissions.

2.    Traffic Control Segment SG&A.    SG&A at our traffic control segment was $11.6 million, or 25.6% of total segment revenues, during the first three months of 2004 and $10.6 million, or 20.0% of total revenues, during the first three months of 2003. The increase in the dollar amount of SG&A in the 2004 period primarily reflected higher bad debt expense. The increase in SG&A as a percentage of revenues during the 2004 period primarily reflected the foregoing and the reduction in revenues described above.

3.    Total Consolidated SG&A.    Total SG&A expense was $114.8 million, or 17.8% of total revenues, during the first three months of 2004 and $96.8 million, or 16.4% of total revenues, during the first three months of 2003. The increase in SG&A as a percentage of revenues in the first three months of 2004 was primarily attributable to a $7.0 million charge for the vesting of restricted stock granted to executives in 2001. This charge has not been allocated to either of our segments.

Excluding the aforementioned charge, SG&A would have been $107.8 million, or 16.7% of total revenues, in the first three months of 2004 compared with $96.8 million, or 16.4% of total revenues, during the first three months of 2003. The increase in the dollar amount of SG&A, excluding the aforementioned charge, in the 2004 period reflected higher SG&A expenses at both of our segments as described above. The increase in SG&A, excluding the aforementioned charge, as a percentage of revenues during the 2004 period primarily reflected the decrease in revenues at our traffic control segment as described above.

Non-rental Depreciation and Amortization

1.    General Rentals Segment Non-rental Depreciation and Amortization.    Non-rental depreciation and amortization for the general rentals segment was $16.2 million, or 2.7% of total segment revenues, in the first three months of 2004 and $16.6 million, or 3.1% of total segment revenues, in the first three months of 2003. The decrease in such expense as percentage of revenues primarily reflected the increase in revenues described above.

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2.    Traffic Control Segment Non-rental Depreciation and Amortization.    Non-rental depreciation and amortization for the traffic control segment was $0.3 million in the first three months of 2004 and $0.4 million in the first three months of 2003.

3.    Total Consolidated Non-rental Depreciation and Amortization.    Total non-rental depreciation and amortization was $16.4 million, or 2.5% of total revenues, in the first three months of 2004 and $17.0 million, or 2.9% of total revenues, in the first three months of 2003. The decrease in such expense as percentage of revenues primarily reflected the increase in revenues described above.

Interest Expense

Interest expense was $45.9 million in the first three months of 2004 and $51.0 million in the first three months of 2003. The decrease in interest expense was attributable to lower interest rates on our debt.

Interest Expense—Subordinated Convertible Debentures and Preferred Dividends of a Subsidiary Trust

In August 1998, a subsidiary trust of United Rentals, Inc. (“Holdings”) sold certain trust preferred securities and used the proceeds from such sale to purchase certain convertible subordinated debentures from Holdings. See “—Certain Information Concerning Trust Preferred Securities.” The subsidiary trust that issued the trust preferred securities was consolidated with Holdings until December 31, 2003, when it was deconsolidated following the adoption of a new accounting principle. See “—Impact of Recently Issued Accounting Standards.”

For periods prior to the deconsolidation, the dividends on the trust preferred securities was reflected as an expense on our consolidated statement of operations and the interest on the subordinated convertible debentures was eliminated in consolidation and thus was not reflected as an expense on our consolidated statement of operations. For periods after the deconsolidation, the dividends on the trust preferred securities is no longer reflected as an expense on our consolidated statement of operations and the interest on the subordinated convertible debentures is no longer eliminated in consolidation and thus is now reflected as an expense on our consolidated statement of operations. Because the interest on the subordinated convertible debentures corresponds to the dividends on the trust preferred securities, this change does not alter the total amount of expense required to be recorded.

The expense recorded in connection with the foregoing securities was $3.6 million in the first three months of 2004 and $3.7 million in the first three months of 2004. The expense in the 2004 period is recorded on the statement of operations as “Interest Expense—Subordinated Convertible Debentures” and the expense in the 2003 period is recorded as “Preferred Dividends of a Subsidiary Trust.” The decrease in the first three months of 2004 was attributable to the repurchase of a portion of the trust preferred securities after the first three months of 2003.

Other (Income) Expense

Other expense was $160.9 million in the first three months of 2004 compared with other income of $0.1 million in the first three months of 2003. The other expense in the first three months of 2004 was primarily attributable to the charges related to debt refinancings described under “—Charges Related to Debt Refinancings and Vesting of Restricted Stock.” Excluding these charges, we would have had other income of $0.2 million.

Benefit for Income Taxes

Income taxes were a benefit of $71.0 million, or an effective rate of 40%, in the first three months of 2004 and a benefit of $5.6 million, or an effective rate of 39%, in the first three months of 2003. Excluding the effects on our 2004 results of (i) the vesting of restricted stock granted to executives in 2001 and (ii) the refinancing charges, discussed above, we would have had an effective rate of 38.3% in the first three months of 2004.

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Liquidity and Capital Resources

Recent Financing Transactions

We recently refinanced approximately $2.1 billion of our debt. This refinancing was completed in the first quarter of 2004, except as described below. The purpose of this refinancing was to reduce our interest expense and extend the maturities on a substantial amount of our debt. As part of this refinancing, we:

• obtained a new senior secured credit facility to replace the senior secured credit facility we previously had in place;

• sold $1 billion of 6 1/2% Senior Notes Due 2012;

• sold $375 million of 7% Senior Subordinated Notes Due 2014;

• repaid $639 million of term loans and $52 million of borrowings that were outstanding under our old credit facility;

• repurchased $845 million principal amount of our 10 3/4% Senior Notes Due 2008, pursuant to a tender offer, for aggregate consideration of $970 million;

• redeemed $300 million principal amount of our outstanding 9 1/4% Senior Subordinated Notes Due 2009 at an aggregate redemption price of $314 million; and

• redeemed $250 million principal amount of our outstanding 9% Senior Subordinated Notes Due 2009 at an aggregate redemption price of $261 million.

The refinancing described above was completed during the first quarter of 2004, except that (i) the redemption of the 9% Senior Subordinated Notes Due 2009 was completed on April 1, 2004 and (ii) a portion of the term loan that is part of the new senior secured credit facility was drawn on April 1, 2004.

The table below shows our debt at March 31, 2004, as adjusted to give effect to those elements of the refinancing that were completed on April 1, 2004.

	As Adjusted		Scheduled Maturity
	(in millions)
Revolving credit facility	$	93.9	February 2009
Term loan		750.0	February 2011
Receivables securitization		—	September 2006
6 1/2% Senior notes		1,000.0	February 2012
7% Senior subordinated notes		375.0	February 2014
7 3/4% Senior subordinated notes		525.0	November 2013
1 7/8% Convertible senior subordinated notes		143.8	October 2023
10 3/4% Senior notes		15.2	April 2008
Other debt		50.8
Total debt	$	2,953.7

For further information concerning our debt see note 8 to our notes to unaudited consolidated financial statements included elsewhere herein and note 9 to our notes to consolidated financial statements included in our 2003 Annual Report on Form 10-K.

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Sources and Uses of Cash

During the first three months of 2004, we (i) generated cash from operations of $202.5 million, (ii) generated cash from the sale of rental equipment of $55.4 million and (iii) obtained cash from borrowings, net of repayments, of approximately $51.5 million. We used cash during this period principally to (i) pay consideration for acquisitions of $60.7 million, (ii) purchase rental equipment of $152.5 million, (iii) purchase other property and equipment of $18.7 million and (iv) pay financing costs of $33.7 million. Our overall cash increased during the first three months of 2004 by approximately $47.7 million.

Cash Requirements Related to Operations

Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment and borrowings available under our revolving credit facility and receivables securitization facility. As of April 29, 2004, we had $514.0 million of borrowing capacity available under our $650 million revolving credit facility (reflecting outstanding loans of approximately $93.8 million and outstanding letters of credit in the amount of approximately $42.2 million). We believe that our existing sources of cash will be sufficient to support our existing operations over the next twelve months.

We expect that our principal needs for cash relating to our existing operations over the next twelve months will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service, and (v) costs relating to our restructuring plans. We plan to fund such cash requirements relating to our existing operations from our existing sources of cash described above. In addition, we may seek additional financing through the securitization of some of our equipment or through the use of additional operating leases. For information on the scheduled principal payments coming due on our outstanding debt and on the payments coming due under our existing operating leases, see “—Certain Information Concerning Contractual Obligations.”

Our capital expenditures for the first quarter of 2004 amounted to $171 million. These expenditures are comprised of (i) approximately $152 million of expenditures for the purchase of rental equipment and (ii) $19 million of expenditures for the purchase of property and equipment. Our capital expenditures in future periods will depend on a number of factors, including general economic conditions and growth prospects. Based on current conditions, we estimate that capital expenditures for the balance of 2004 will be approximately $405 million to $530 million for our existing operations. These expenditures are comprised of approximately: (i) $375 million to $500 million of expenditures for the purchase of rental equipment and (ii) $30 million of expenditures for the purchase of property and equipment. We expect that we will fund such expenditures from proceeds from the sale of used equipment, cash generated from operations and, if required, borrowings available under our revolving credit facility and receivables securitization facility.

While emphasizing internal growth, we may also continue to expand through a disciplined acquisition program. We will consider potential transactions of varying sizes and may, on a selective basis, pursue acquisition or consolidation opportunities involving other public companies or large privately-held companies. We expect to pay for future acquisitions using cash, capital stock, notes and/or assumption of indebtedness. To the extent that our existing sources of cash described above are not sufficient to fund such future acquisitions, we will require additional debt or equity financing and, consequently, our indebtedness may increase or the ownership of existing stockholders may be diluted as we implement our growth strategy.

Certain Information Concerning Contractual Obligations

The table below provides certain information concerning the payments coming due under certain categories of our existing contractual obligations. The information is as of March 31, 2004, as adjusted to give effect to certain transactions relating to our recent refinancing that were completed on April 1, 2004 as described under “—Liquidity and Capital Resources—Recent Financing Transactions.”

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	Remainder of 2004		2005		2006		2007		2008		Thereafter		Total
	(in thousands)
Debt excluding capital leases(1)	$	15,054	$	7,720	$	7,500	$	7,500	$	22,662	$	2,863,884	$	2,924,320
Capital leases (1)		8,918		9,405		6,620		3,489		946		72		29,450
Operating leases(1):
Real estate		50,990		62,862		57,695		52,877		43,441		108,574		376,439
Rental equipment		52,361		44,065		46,394		22,704		16,752		1,105		183,381
Other equipment		15,469		12,100		9,391		5,080		3,272		382		45,694
Purchase obligations
Other long-term liabilities reflected on balance sheet in accordance with GAAP(2)												221,550		221,550
Total	$	142,792	$	136,152	$	127,600	$	91,650	$	87,073	$	3,195,567	$	3,780,834

(1) The payments due with respect to a period represent (i) in the case of debt and capital leases, the scheduled principal payments due in such period, and (ii) in the case of operating leases, the minimum lease payments due in such period under non-cancelable operating leases plus the maximum potential guarantee amounts discussed below under “—Certain Information Concerning Off-Balance Sheet Arrangements.”

(2) Represents our subordinated convertible debentures.

Certain Information Concerning Related Party

We have from time to time purchased equipment from Terex Corporation (“Terex”) and expect to do so in the future. The chief executive officer and a director of Terex is also a director of our company. We purchased equipment from Terex of approximately $17 million during the first three months of 2004.

Certain Information Concerning Off-Balance Sheet Arrangements

Restricted Stock.    We have granted to employees other than executive officers and directors approximately 900,000 shares of restricted stock that contain the following provisions. The shares vest in 2005, 2006 or 2007 or earlier upon a change in control of the Company, death, disability, retirement or certain terminations of employment, and are subject to forfeiture prior to vesting on certain other terminations of employment, the violation of non-compete provisions and certain other events. If a holder of restricted stock sells his stock and receives sales proceeds that are less than a specified guaranteed amount set forth in the grant instrument, we have agreed to pay the holder the shortfall between the amount received and such specified amount. However, the foregoing only applies to sales that are made within five trading days of the vesting date. The specified guaranteed amount is (i) $27.26 per share with respect to approximately 300,000 shares scheduled to vest in 2005, (ii) $9.18 per share with respect to approximately 400,000 shares scheduled to vest in 2006, and (iii) $17.20 per share with respect to approximately 200,000 shares scheduled to vest in 2007.

Operating Leases.    We lease real estate, rental equipment and non-rental equipment under operating leases as a regular business activity. As part of many of our equipment operating leases, we guarantee that the value of the equipment at the end of the term will not be less than a specified projected residual value. The use of these guarantees helps to lower our monthly operating lease payments. We do not know at this time the extent to which the actual residual values may be less than the guaranteed residual values and, accordingly, cannot quantify the amount that we ultimately will be required to pay, if any, under these guarantees. However, under current circumstances we do not anticipate paying significant amounts under these guarantees in the future. If the actual residual value for all equipment subject to such guarantees were to be zero, then our maximum potential liability under these guarantees would be approximately $39.2 million. In accordance with FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” this potential liability was not reflected on our balance sheet as of March 31, 2004 or any prior date because the leases associated with such guarantees were entered into prior to January 1, 2003. For additional information concerning lease payment obligations under our operating leases, see “—Certain Information Concerning Contractual Obligations” above.

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Certain Information Concerning Trust Preferred Securities

In August 1998, a subsidiary trust of United Rentals, Inc. (“Holdings”) sold six million shares of 6 ¹/2% Convertible Quarterly Income Preferred Securities (“trust preferred securities”) for aggregate consideration of $300 million. The trust used the proceeds from the sale of these securities to purchase 6 ¹/2% subordinated convertible debentures due 2028 from Holdings which resulted in Holdings receiving all of the net proceeds of the sale. The subsidiary trust that issued the trust preferred securities was consolidated with Holdings until December 31, 2003, when it was deconsolidated following the adoption of a new accounting principle. See “—Impact of Recently Issued Accounting Standards.”

For periods prior to the deconsolidation, the dividends on the trust preferred securities was reflected as an expense on our consolidated statement of operations and the interest on the subordinated convertible debentures was eliminated in consolidation and thus was not reflected as an expense on our consolidated statement of operations. For periods after the deconsolidation, the dividends on the trust preferred securities is no longer reflected as an expense on our consolidated statement of operations and the interest on the subordinated convertible debentures is no longer eliminated in consolidation and thus is now reflected as an expense on our consolidated statement of operations. Because the interest on the subordinated convertible debentures corresponds to the dividends on the trust preferred securities, this change does not alter the total amount of expense required to be recorded.

Relationship Between Holdings and URI

Holdings is principally a holding company and primarily conducts its operations through its wholly owned subsidiary United Rentals (North America), Inc. (“URI”) and subsidiaries of URI. Holdings provides certain services to URI in connection with its operations. These services principally include: (i) senior management services, (ii) finance and tax related services and support, (iii) information technology systems and support, (iv) acquisition related services, (v) legal services, and (vi) human resource support. In addition, Holdings leases certain equipment and real property that are made available for use by URI and its subsidiaries. URI has made, and expects to continue to make, certain payments to Holdings in respect of the services provided by Holdings to URI. The expenses relating to URI’s payments to Holdings are reflected on URI’s financial statements as selling, general and administrative expenses. In addition, although not legally obligated to do so, URI has in the past made, and expects that it will in the future make, distributions to Holdings to, among other things, enable Holdings to pay interest on the convertible debentures that were issued to a subsidiary trust of Holdings as described above.

As discussed above, our consolidated financial statements reflect (i) for periods prior to January 1, 2004, expenses related to dividends on certain trust preferred securities issued by a subsidiary trust of Holdings and (ii) for periods after January 1, 2004, expenses related to certain subordinated convertible debentures issued by Holdings to such subsidiary trust. However, the foregoing expenses are not reflected on the consolidated financial statements of URI because URI is not obligated with respect to the foregoing securities. This is the principal reason for the difference in the historical net income (loss) reported on the consolidated financial statements of URI and the net income (loss) reported on the consolidated financial statements of Holdings.

Seasonality

Our business is seasonal with demand for our rental equipment tending to be lower in the winter months. The seasonality of our business is heightened because we offer for rent traffic control equipment. Branches that rent a significant amount of this type of equipment tend to generate most of their revenues and profits in the second and third quarters of the year, slow down during the fourth quarter and operate at a loss during the first quarter.

Inflation

Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation, has not had, and is not likely in the foreseeable future to have, a material impact on our results of operations. However, as described above, cost increases have, from time to time, impacted our results.

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Impact of Recently Issued Accounting Standards

In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”, revised December 2003), “Consolidation of Variable Interest Entities,” which addresses consolidation of variable interest entities (“VIEs”). FIN 46 requires a VIE to be consolidated by a parent company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. A VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. The consolidation requirements of FIN 46 apply immediately to VIEs created after January 31, 2003. For entities created prior to February 1, 2003, the effective date of these requirements, which originally was July 1, 2003, was deferred so as not to apply until the first period ending after December 15, 2003. Upon adoption of this standard, as of December 31, 2003, we deconsolidated a subsidiary trust that had issued trust preferred securities as described above. As a result of such deconsolidation, (i) the trust preferred securities issued by our subsidiary trust, which had previously been reflected on our consolidated balance sheets, were removed from our consolidated balance sheets at December 31, 2003, (ii) the subordinated convertible debentures that we issued to the subsidiary trust, which previously had been eliminated in our consolidated balance sheets, were no longer eliminated in our consolidated balance sheets at December 31, 2003 and (iii) commencing January 1, 2004, the interest on the subordinated convertible debentures is reflected as an expense on our consolidated statement of operations instead of the dividends on the trust preferred securities. The carrying amount of the trust preferred securities removed from the consolidated balance sheets was the same as the carrying amount of the subordinated convertible debentures added to the consolidated balance sheets. However, the subordinated convertible debentures are reflected as a component of liabilities on the consolidated balance sheets at December 31, 2003, whereas the trust preferred securities were reflected as a separate category prior to December 31, 2003. The adoption of this standard did not otherwise have a material effect on our statements of financial position or results of operations.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This standard amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. This standard is effective for contracts entered into or modified after June 30, 2003, except as stated below, and for hedging relationships designated after June 30, 2003. The provisions of this standard that relate to SFAS No. 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. The adoption of this standard regarding the provisions effective after June 30, 2003 did not have a material effect on our statements of financial position or operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This standard requires that financial instruments falling within the scope of this standard be classified as liabilities. This standard is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective with the first interim period beginning after June 15, 2003. The adoption of this standard did not have a material effect on our statements of financial position or results of operations.

Factors that May Influence Future Results and Accuracy of Forward-Looking Statements

Sensitivity to Changes in Construction and Industrial Activities

Our general rental equipment is principally used in connection with construction and industrial activities and our traffic control equipment is principally used in connection with the construction or repair of roads and bridges and similar infrastructure projects. Weakness in our end markets, such as a decline in construction or industrial activity or a reduction in infrastructure projects, may lead to a decrease in the demand for our equipment or the prices that we can charge. Any such decrease could adversely affect our operating results by

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decreasing revenues and gross profit margins. For example, there have been significant declines in non-residential construction activity in 2002 and 2003 and reductions in government spending on infrastructure projects in several key states. This weakness in our end markets adversely affected our results in 2002, 2003 and in the first quarter of 2004.

We have identified below certain factors that may cause further weakness in our end markets, either temporarily or long-term:

• continuation of weakness in the economy or the onset of a recession;

• an increase in the cost of construction materials;

• reductions in government spending for roads, bridges and other infrastructure projects;

• an increase in interest rates;

• adverse weather conditions which may temporarily affect a particular region; or

• terrorism or hostilities involving the United States.

Fluctuations of Operating Results

We expect that our revenues and operating results may fluctuate from quarter to quarter or over the longer term due to a number of factors. These factors include:

• seasonal rental patterns of our customers, with rental activity tending to be lower in the winter;

• completion of acquisitions;

• changes in the amount of revenue relating to renting traffic control equipment, since revenues from this equipment category tend to be more seasonal than the rest of our business;

• changes in the size of our rental fleet or in the rate at which we sell our used equipment;

• changes in government spending for infrastructure projects;

• changes in demand for our equipment or the prices therefor due to changes in economic conditions, competition or other factors;

• changes in the interest rates applicable to our floating rate debt;

• increases in costs (including the cost of fuel which has recently fluctuated significantly and which may continue to fluctuate significantly);

• if we determine that a potential acquisition will not be consummated, the need to charge against earnings any expenditures relating to such transaction (such as financing commitment fees, merger and acquisition advisory fees and professional fees) previously capitalized; or

• the possible need, from time to time, to take goodwill write-offs as described below or other write-offs or special charges due to a variety of occurrences such as the adoption of new accounting standards, store consolidations or closings, the refinancing of existing indebtedness, the impairment of assets or the buy-out of equipment leases.

Substantial Goodwill

At March 31, 2004, we had on our balance sheet net goodwill in the amount of $1,465 million, which represented approximately 30% of our total assets at such date. This goodwill is an intangible asset and represents the excess of the purchase price that we paid for acquired businesses over the estimated fair value of the net assets of those businesses. We are required to test our goodwill for impairment at least annually. In general, this means that we must determine whether the fair value of the goodwill, calculated in accordance with applicable accounting standards, is at least equal to the recorded value shown on our balance sheet. If the fair value of the goodwill is less than the recorded value, we are required to write off the excess goodwill as an expense. Any write-off would reduce our total assets and shareholders’ equity and be a charge against income.

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We assess impairment solely on the basis of recent historical performance and without reference to expected future performance. This means that, if the historical data for a reporting unit indicates impairment, a goodwill write-off is required even when we believe that reporting unit’s future performance will be significantly better. The fact that we test for impairment using only historical financial data increases the likelihood that we will be required to take additional non-cash goodwill write-offs in the future.

Substantial Indebtedness

At March 31, 2004, our total indebtedness was approximately $3,227.8 million, which includes $221.6 million in subordinated convertible debentures. Our substantial indebtedness has the potential to affect us adversely in a number of ways. For example, it will or could:

• require us to devote a substantial portion of our cash flow to debt service, reducing the funds available for other purposes;

• constrain our ability to obtain additional financing, particularly since substantially all of our assets are subject to security interests relating to existing indebtedness; or

• make it difficult for us to cope with a downturn in our business or a decrease in our cash flow.

Furthermore, if we are unable to service our indebtedness and fund our business, we will be forced to adopt an alternative strategy that may include:

• reducing or delaying capital expenditures;

• limiting our growth;

• seeking additional capital;

• selling assets; or

• restructuring or refinancing our indebtedness.

Even if we adopt an alternative strategy, the strategy may not be successful and we may continue to be unable to service our indebtedness and fund our business.

A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, an increase in market interest rates would increase our interest expense and our debt service obligations. At March 31, 2004, as adjusted to give effect to the completion of our approximately $2.1 billion debt refinancing as described under “—Liquidity and Capital Resources—Recent Financing Transactions,” and taking into account our interest rate swap agreements, we had $2,188.9 million of variable rate indebtedness.

Need to Satisfy Financial and Other Covenants in Debt Agreements

Under the agreement governing our senior secured credit facility, we are required to, among other things, satisfy certain financial tests relating to: (a) the interest coverage ratio, (b) the ratio of funded debt to cash flow, (c) the ratio of senior secured debt to tangible assets and (d) the ratio of senior secured debt to cash flow. If we are unable to satisfy any of these covenants, the lenders could elect to terminate the credit facility and require us to repay the outstanding borrowings under the credit facility. In such event, unless we are able to refinance the indebtedness coming due and replace the credit facility, we would likely not have sufficient liquidity for our business needs and be forced to adopt an alternative strategy as described above. Even if we adopt an alternative strategy, the strategy may not be successful and we may not have sufficient liquidity for our business.

We are also subject to various other covenants under the agreements governing our credit facility and other indebtedness. These covenants limit or prohibit, among other things, our ability to incur indebtedness, make prepayments of certain indebtedness, pay dividends, make investments, create liens, make acquisitions, sell assets and engage in mergers and acquisitions. These covenants could adversely affect our operating results by significantly limiting our operating and financial flexibility.

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Dependence on Additional Capital

If the cash that we generate from our business, together with cash that we may borrow under our credit facility, is not sufficient to fund our capital requirements, we will require additional debt and/or equity financing. However, we may not succeed in obtaining the requisite additional financing on terms that are satisfactory to us or at all. If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment, making acquisitions, opening new rental locations and refinancing existing indebtedness.

Certain Risks Relating to Acquisitions

We have grown in part through acquisitions and may continue to do so. We will consider potential acquisitions of varying sizes and may, on a selective basis, pursue acquisitions or consolidation opportunities involving other public companies or large privately-held companies. We expect to pay for future acquisitions using cash, capital stock, notes and/or assumption of indebtedness. To the extent that our existing sources of cash are not sufficient to fund future acquisitions, we will require additional debt or equity financing and, consequently, our indebtedness may increase as we implement our growth strategy. The making of acquisitions entails certain risks, including:

• unrecorded liabilities of acquired companies that we fail to discover during our due diligence investigations;

• difficulty in assimilating the operations and personnel of the acquired company with our existing operations or in maintaining uniform standards; and

• loss of key employees of the acquired company.

It is possible that we will not realize the expected benefits from our acquisitions or that our existing operations will be harmed as a result of acquisitions.

Dependence on Management

Our success is highly dependent on the experience and skills of our senior management team. If we lose the services of any member of this team and are unable to find a suitable replacement, we may not have the depth of senior management resources required to efficiently manage our business and execute our strategy. We do not maintain “key man” life insurance on the lives of members of senior management.

Competition

The equipment rental industry is highly fragmented and competitive. Our competitors primarily include small, independent businesses with one or two rental locations, regional competitors which operate in one or more states, public companies or divisions of public companies, and equipment vendors and dealers who both sell and rent equipment directly to customers. We may in the future encounter increased competition from our existing competitors or from new companies. Competitive pressures could adversely affect our revenues and operating results by decreasing our rental volumes or depressing the prices that we can charge.

Dependence on Information Technology Systems

Our information technology systems facilitate our ability to monitor and control our operations and adjust to changing market conditions. Any disruptions in these systems or the failure of these systems to operate as expected could, depending on the magnitude of the problem, adversely affect our operating results by limiting our capacity to effectively monitor and control our operations and adjust to changing market conditions.

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Liability and Insurance

We are exposed to various possible claims relating to our business. These possible claims include those relating to (1) personal injury or death caused by equipment rented or sold by us, (2) motor vehicle accidents involving our delivery and service personnel and (3) employment related claims. We carry a broad range of insurance for the protection of our assets and operations. However, such insurance may not fully protect us for a number of reasons, including:

• our coverage is subject to deductibles per occurrence of $2 million for general liability, $2 million for workers’ compensation and $3 million for automobile liability and limited to a maximum of $100 million per occurrence;

• we do not maintain coverage for environmental liability (other than legally required fuel storage tank coverage), since we believe that the cost for such coverage is high relative to the benefit that it provides; and

• certain types of claims, such as claims for punitive damages or for damages arising from intentional misconduct, which are often alleged in third party lawsuits, might not be covered by our insurance.

If we are found liable for any significant claims that are not covered by insurance, our operating results could be adversely affected because our expenses related to claims would increase. It is possible that some or all of the insurance that is currently available to us will not be available in the future on economically reasonable terms or at all.

Environmental and Safety Regulations

Our operations are subject to numerous laws governing environmental protection and occupational health and safety matters. These laws regulate such issues as wastewater, stormwater, solid and hazardous wastes and materials, and air quality. Under these laws, we may be liable for, among other things, (1) the costs of investigating and remediating contamination at our sites as well as sites to which we sent hazardous wastes for disposal or treatment regardless of fault and (2) fines and penalties for non-compliance. Our operations generally do not raise significant environmental risks, but we use hazardous materials to clean and maintain equipment, and dispose of solid and hazardous waste and wastewater from equipment washing, and store and dispense petroleum products from underground and above-ground storage tanks located at certain of our locations.

Based on the conditions currently known to us, we do not believe that any pending or likely remediation and compliance costs will have a material adverse effect on our business. We cannot be certain, however, as to the potential financial impact on our business if new adverse environmental conditions are discovered or environmental and safety requirements become more stringent. If we are required to incur environmental compliance or remediation costs that are not currently anticipated by us, our operating results could be adversely affected depending on the magnitude of the cost.

Labor Matters

We have approximately 1,200 employees that are represented by unions and covered by collective bargaining agreements. If we should experience a prolonged labor dispute involving a significant number of our employees, our ability to serve our customers could be adversely affected. In addition, our labor costs could increase as a result of the settlement of actual or threatened labor disputes. Furthermore, union organizing efforts or related actions could negatively affect our relationships with employees or customers.

Operations Outside the United States

Our operations in Canada and Mexico are subject to the risks normally associated with international operations. These include (1) the need to convert currencies, which could result in a gain or loss depending on fluctuations in exchange rates, (2) the need to comply with foreign laws and (3) the possibility of political or economic instability in foreign countries.

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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

We periodically utilize interest rate swap agreements to manage our interest costs and exposure to changes in interest rates. At March 31, 2004, we had swap agreements with an aggregate notional amount of $1,345 million. The effect of these agreements was to convert $1,345 million of our fixed rate notes to floating rate instruments. The fixed rate notes being converted consisted of: (i) $445 million of our 6 ¹/2% senior notes through 2012, (ii) $375 million of our 7% senior subordinated notes through 2014, and (iii) $525 million of our 7 ³/4% senior subordinated notes through 2013.

As of March 31, 2004, after giving effect to our interest rate swap agreements, we had an aggregate of $2,189 million of indebtedness that bears interest at variable rates. This debt includes, in addition to the $1,345 million of debt subject to the swap agreements described above, (i) all borrowings under our $650 million revolving credit facility ($94 million outstanding) and (ii) our term loan ($750 million outstanding). The weighted average interest rates applicable to our variable rate debt on March 31, 2004 were (i) 4.6% for the revolving credit facility (represents the Canadian rate since the amount outstanding was Canadian borrowings), (ii) 3.4% for the term loan and (iii) 3.9% for the debt subject to our swap agreements. As of March 31, 2004, based upon the amount of our variable rate debt outstanding, after giving effect to our interest rate swap agreements, our annual earnings would decrease by approximately $13.5 million for each one percentage point increase in the interest rates applicable to our variable rate debt. The amount of our variable rate indebtedness may fluctuate significantly as a result of changes in the amount of indebtedness outstanding under our revolving credit facility and receivables securitization facility from time to time. For additional information concerning the terms of our variable rate debt, see note 9 to our notes to consolidated financial statements included in our 2003 Annual Report on Form 10-K.

Market risk relating to changes in foreign currency exchanges rates were reported in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2003. There has been no material change in this market risk since the end of the fiscal year 2003.

Item 4.    Controls and Procedures

An evaluation has been carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and the operation of our “disclosure controls and procedures” (as such term is defined in Rules 13a-14(c) under the Securities Exchange Act of 1934) as of March 31, 2004. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2004, the disclosure controls and procedures were reasonably designed and effective at the reasonable assurance level to ensure that (i) information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation and audit of our consolidated financial statements included in our 2003 Annual Report on Form 10-K, we became aware of certain weaknesses in our internal controls. We believe that these weaknesses did not affect the accuracy of our financial statements included in our Annual Report on Form 10-K. However, they represented a significant deficiency in our internal controls as of December 31, 2003. In order to correct this deficiency, we took the following actions: (i) reinforced compliance with existing processes and procedures relating to the financial statement close process and implemented additional processes and procedures relating thereto and (ii) expanded and enhanced the periodic review process by our company’s financial and accounting personnel. We believe that the foregoing actions fully corrected the deficiency.

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PART II    OTHER INFORMATION

Item 1.    Legal Proceedings

We and our subsidiaries are parties to various litigation matters involving ordinary and routine claims incidental to our business. Our ultimate legal and financial liability with respect to such pending litigation cannot be estimated with certainty but we believe, based on our examination of such matters, that such ultimate liability will not have a material adverse effect on our consolidated financial position or results of operations.

Item 6.    Exhibits and Reports on Form 8-K

(a)  Exhibits:

Exhibit Number		Description of Exhibit
3	(a)	Amended and Restated Certificate of Incorporation of United Rentals, Inc., in effect as of the date hereof (incorporated by reference to exhibit 3.1 of United Rentals, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
3	(b)	Certificate of Amendment to the United Rentals, Inc. Certificate of Incorporation dated September 29, 1998 (incorporated by reference to Exhibit 4.2 to the United Rentals, Inc. Registration Statement on Form S-3, No. 333-70151)
3	(c)	By-laws of United Rentals, Inc., in effect as of the date hereof (incorporated by reference to exhibit 3.2 of United Rentals, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
3	(d)	Form of Certificate of Designation for Series C Perpetual Convertible Preferred Stock (incorporated by reference to exhibit 3(f) of United Rentals, Inc. Report on Form 10-Q for the quarter ended September 30, 2001)
3	(e)	Form of Certificate of Designation for Series D Perpetual Convertible Preferred Stock (incorporated by reference to exhibit 3(g) of United Rentals, Inc. Report on Form 10-Q for the quarter ended September 30, 2001)
3	(f)	Form of Certificate of Designation for Series E Junior Participating Preferred Stock (incorporated by reference to Exhibit A of Exhibit 4 of the United Rentals, Inc. Current report on Form 8-K filed October 5, 2001)
3	(g)	Rights Agreement dated September 28, 2001 between United Rentals, Inc. and American Stock Transfer & Trust Co., as Rights Agent (incorporated by reference to Exhibit 4 to the United Rentals, Inc. Report on Form 8-K filed on October 5, 2001)
3	(h)	Amended and Restated Certificate of Incorporation of United Rentals (North America), Inc., in effect as of the date hereof (incorporated by reference to Exhibit 3.3 of the United Rentals (North America), Inc. Report on Form 10-Q for the quarter ended June 30, 1998)
3	(i)	By-laws of United Rentals (North America), Inc., in effect as of the date hereof (incorporated by reference to Exhibit 3.4 of the United Rentals (North America), Inc. Report on Form 10-Q for the quarter ended June 30, 1998)
4	(a)	Supplemental Indenture dated as of January 30, 2004, among United Rentals (North America), Inc., United Rentals, Inc. and the Guarantors named therein, to Indenture dated as of December 24, 2002 (incorporated by reference to Exhibit 4(h) to United Rentals, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2003)

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Exhibit Number		Description of Exhibit
4	(b)	Supplemental Indenture dated as of January 30, 2004, among United Rentals (North America), Inc., United Rentals, Inc. and the Guarantors named therein, to Indenture dated as of April 20, 2001 (incorporated by reference to Exhibit 4(i) to United Rentals, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2003)
4	(c)	Indenture dated as of January 28, 2004 among United Rentals (North America), Inc., the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
4	(d)	Indenture dated as of February 17, 2004 among United Rentals (North America), Inc., the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.2 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
4	(e)	Registration Rights Agreement dated as of January 28, 2004, among United Rentals (North America), Inc., the Guarantors named therein, and the initial purchasers named therein (incorporated by reference to Exhibit 4.3 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
4	(f)	Registration Rights Agreement dated as of February 17, 2004, among United Rentals (North America), Inc., the Guarantors named therein, and the initial purchasers named therein (incorporated by reference to Exhibit 4.4 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(a)	Amended and Restated Credit Agreement dated as of February 13, 2004, among United Rentals, Inc., United Rentals (North America), Inc., United Rentals of Canada, Inc., United Rentals of Nova Scotia (No. l), ULC, the lenders party thereto, JPMorgan Chase Bank, as US Administrative Agent, and JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent (incorporated by reference to Exhibit 10.5 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(b)	Purchase Agreement dated January 23, 2004, relating to the initial sale by United Rentals (North America), Inc., of $375 million aggregate principal amount of 7% Senior Subordinated Notes Due 2014 (incorporated by reference to Exhibit 10.1 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(c)	Amendment No. l to Purchase Agreement dated January 27, 2004, relating to the initial sale by United Rentals (North America), Inc., of $375 million aggregate principal amount of 7% Senior Subordinated Notes Due 2014 (incorporated by reference to Exhibit 10.2 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(d)	Purchase Agreement dated January 23, 2004, relating to the initial sale by United Rentals (North America), Inc., of $1 billion aggregate principal amount of 6½% Senior Notes Due 2012 (incorporated by reference to Exhibit 10.3 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(e)	Amendment No. l to Purchase Agreement dated February 13, 2004, relating to the initial sale by United Rentals (North America), Inc., of $1 billion aggregate principal amount of 6½% Senior Notes Due 2012 (incorporated by reference to Exhibit 10.4 to United Rentals, Inc. Report on Form 8-K filed on February 23, 2004)
10	(f)*	Employment Agreement dated April 8, 2004, between United Rentals, Inc. and Wayland R. Hicks (having attached as Exhibit A thereto a Restricted Stock Unit Agreement dated as of April 8, 2004, between United Rentals, Inc. and Wayland R. Hicks)†
10	(g)*	Employment Agreement dated April 8, 2004, between United Rentals, Inc. and John N. Milne (having attached as Exhibit A thereto a Restricted Stock Unit Agreement dated as of April 8, 2004, between United Rentals, Inc. and John N. Milne)†
10	(h)*	Indemnification Agreement dated April 8, 2004, between United Rentals, Inc. and Wayland R. Hicks†

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Exhibit Number		Description of Exhibit
10	(i)	Form of United Rentals, Inc., Annual Incentive Compensation Plan (incorporated by reference to Appendix B to the United Rentals, Inc., Definitive Proxy Statement filed with the SEC on April 21, 2004)†
10	(j)	Form of United Rentals, Inc., Long-Term Incentive Plan (incorporated by reference to Appendix C to the United Rentals, Inc., Definitive Proxy Statement filed with the SEC on April 21, 2004)†
10	(k)*	Amendment to United Rentals, Inc. 2001 Senior Stock Plan†
31	(a)*	Rule 13a-14(a) Certification by Chief Executive Officer
31	(b)*	Rule 13a-14(a) Certification by Chief Financial Officer
32	(a)*	Section 1350 Certification by Chief Executive Officer
32	(b)*	Section 1350 Certification by Chief Financial Officer

(b)  Reports on Form 8-K:

1.	Form 8-K filed on January 20, 2004 (earliest event reported January 16, 2004); Item 5 was reported.
2.	Form 8-K filed on January 22, 2004 (earliest event reported January 22, 2004); Item 5 was reported.
3.	Form 8-K filed on January 26, 2004 (earliest event reported January 23, 2004); Item 5 was reported.
4.	Form 8-K filed on February 3, 2004 (earliest event reported February 2, 2004); Item 5 was reported.
5.	Form 8-K filed on February 23, 2004 (earliest event reported February 17, 2004); Item 5 was reported.
6.	Form 8-K filed on February 25, 2004 (earliest event reported February 25, 2004); Item 12 was reported.

* Filed herewith

† This document is a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UNITED RENTALS, INC.
Dated: May 10, 2004	By:	/s/    JOHN N. MILNE
		John N. Milne President and Chief Financial Officer (Principal Financial Officer)

	UNITED RENTALS, INC.
Dated: May 10, 2004	By:	/s/    JOSEPH B. SHERK
		Joseph B. Sherk Vice President, Corporate Controller (Principal Accounting Officer)

	UNITED RENTALS (NORTH AMERICA), INC.
Dated: May 10, 2004	By:	/s/    JOHN N. MILNE
		John N. Milne President and Chief Financial Officer (Principal Financial Officer)

	UNITED RENTALS (NORTH AMERICA), INC.
Dated: May 10, 2004	By:	/s/    JOSEPH B. SHERK
		Joseph B. Sherk Vice President, Corporate Controller (Principal Accounting Officer)

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EX-10.F

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on April 8, 2004, between UNITED RENTALS, INC., a Delaware corporation (the “Company”), and Wayland R. Hicks (“Executive”).

WHEREAS, Executive is currently employed as Chief Executive Officer of the Company and serves as Vice Chairman and as a director of the Board of Directors of the Company; and

WHEREAS, Executive is party to an employment agreement with the Company dated November 14, 1997, as amended pursuant to amendments dated as of December 24, 1999, November 14, 2000, and November 16, 2003 (the “Existing Agreement”); and

WHEREAS, the parties hereto desire to enter into this Agreement in order to set forth the terms pursuant to which the Company will continue to employ Executive and Executive will continue to serve as the Chief Executive Officer; and

WHEREAS, the parties hereto desire that this Agreement will replace and supercede the Existing Agreement, and that as of the Effective Time (as defined below), the Existing Agreement shall be null and void.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties hereto agree as follows:

1. Employment and Duties. During the Term (as hereinafter defined), the Company shall employ Executive as its Chief Executive Officer, and in such other positions as are commensurate with his status as Chief Executive Officer of the Company, as determined from time to time by the Company’s Board of Directors (the “Board of Directors” or the “Board”). Executive shall have such duties and authorities as are customary for the Chief Executive Officer of a publicly held corporation of the size, type and nature of the Company.

2. Term. Subject to the provisions for termination included in this Agreement, the term of Executive’s employment hereunder shall be for a period of five years commencing as of January 1, 2004 (the “Effective Time”) and ending December 31, 2008 (the “Term”). Unless either party gives notice of non-renewal at least 60 day prior to the end of the then current Term, the Term will extend for successive one-year renewal periods.

3. Compensation and Other Benefits. For all services rendered by Executive to or on behalf of the Company or its Affiliates (as defined below) during the Term, the Company shall compensate Executive as follows:

(a) Base Salary. Effective as of the Effective Time, the base salary payable to Executive shall be $550,000 per annum (the “Base Salary”), with annual increases, if any, as may be approved in writing in the sole discretion of the Compensation Committee of the Board. The Base Salary shall be payable bi-weekly in arrears in accordance with the Company’s normal payroll practices. The official action of the Board of Directors increasing the Base Salary, if at all, shall be deemed to amend the amount of the Base Salary stated in this paragraph 3(a).

(b) Annual Incentive Bonus Plan. Executive shall be entitled to receive, in respect of each calendar year during the Term, an annual cash incentive bonus (the “Annual Bonus”) pursuant to the terms of the Company’s Annual Incentive Compensation Plan (the “Annual Incentive Plan”). The parties hereto acknowledge that Executive’s performance goals and target bonus amounts for 2004 have previously been provided to Executive. The performance goals and target bonus amounts for each subsequent year during the Term shall be set forth in a performance plan to be determined by the Compensation Committee of the Board in good faith and delivered to Executive within 90 days of the beginning of each calendar year during the Term; provided that the target bonus amounts for any such

subsequent year shall not be less than the target bonus amounts for the 2004 plan year. Except as otherwise provided in this Agreement, the Annual Bonus shall be paid to Executive at such times and in such amounts as provided in the Annual Incentive Plan.

(c) Long-Term Performance Unit Plan. The Company has approved, and proposes to submit for stockholder approval at its 2004 meeting of stockholders, a Long-Term Incentive Plan (the “LTI Plan”) for certain officers and senior employees of the Company. The Committee of the Board that administers the LTI Plan has awarded 275,000 performance units (the “Performance Units”) under the LTI Plan to Executive, subject to approval of the LTI Plan by the Company’s stockholders. Except as otherwise provided in this Agreement, the Performance Units shall vest and shall be paid to Executive pursuant to the terms of the LTI Plan.

(d) Equity Awards.

(i) Contemporaneously with the approval of this Agreement, the Compensation Committee of the Board has awarded to Executive 200,000 Stock Units (the “Stock Unit Award”) under the Company’s 2001 Senior Stock Plan, as amended (the “Stock Plan”). The Stock Units granted pursuant to the Stock Unit Award as aforesaid (the “Stock Units”) shall vest and become nonforfeitable as follows: (A) 33,333 Stock Units shall vest on January 1, 2005, 33,333 Stock Units shall vest on July 1, 2005, and 33,334 Stock Units shall vest on January 1, 2006 (provided in each case that Executive’s employment with the Company continues through such date), and (B) 100,000 Stock Units shall vest on December 31, 2008 (provided Executive’s employment with the Company continues through the scheduled end of the Term without giving effect to any renewal periods). Notwithstanding the foregoing, (A) in the event of a Change of Control (as defined below), any unvested Stock Units shall become immediately vested and nonforfeitable upon the occurrence of such event, (B) in the event of the termination of Executive’s employment due to death or Disability (as defined below) on or prior to January 1, 2006, any unvested Stock Units that were scheduled to vest on or prior to January 1, 2006, shall become immediately vested and nonforfeitable and the remaining unvested Stock Units shall be cancelled and forfeited and (C) in the event of the termination of Executive’s employment by the Company without Cause (as defined below) or Executive’s termination for Good Reason (as defined below), then an “appropriate fraction” (as hereinafter defined) of each separate tranche of any unvested Stock Units shall become immediately vested and nonforfeitable and the remaining unvested Stock Units shall be cancelled and forfeited. For purposes of the foregoing, the “appropriate fraction” with respect to any tranche of Stock Units means: (i) the amount of time that has elapsed from the grant date of such Stock Units to the occurrence of the event triggering accelerated vesting divided by (ii) the total amount of time from the grant date to the scheduled vesting date for such Stock Units absent accelerated vesting. For purposes of the foregoing, the Stock Units scheduled to vest on different dates will be considered separate tranches and the calculation of the appropriate fraction will be made separately for each tranche as if such tranche were the only tranche (i.e., the Stock Units scheduled to vest on January 1, 2005 are one tranche, those scheduled to vest on July 1, 2005 a second tranche, those scheduled to vest on January 1, 2006 a third tranche and those scheduled to vest on December 31, 2008 a fourth tranche). In the event of the termination of Executive’s employment by the Company for Cause, or Executive’s voluntary resignation (including retirement pursuant to paragraph 5(f) prior to the expiration of the Term) without Good Reason (as defined below), any unvested Stock Units shall be cancelled and forfeited. The Stock Units shall be settled in the common stock of the Company on a one-for-one basis. The Stock Unit Award shall be subject to such other terms and conditions as are provided in the grant agreement between Executive and the Company, attached hereto as Exhibit A, which terms shall not be inconsistent with this paragraph 3(d) and the Stock Plan. For the sake of clarity it is specified that the foregoing provisions only apply to the Stock Units granted pursuant to the Stock Unit Award and not to any other awards under the Stock Plan (which are or will be governed by the terms of the grant agreement related to such award except as specified in Section 3(f)).

(ii) Unless previously registered, the Company shall file with the Securities and Exchange Commission a Form S-8 registration statement registering any Company Stock not previously

2

registered and issuable upon settlement of the Stock Units, the Performance Units and any other equity award previously granted, or to be granted, to Executive, whether pursuant to this Agreement or otherwise. Such Form S-8 shall be filed not later than the date on which such Stock Units, Performance Units or other equity awards become vested. Executive acknowledges that the number of shares of Common Stock that may be issued upon the settlement of the Performance Units will not be ascertainable until the vesting of such Performance Units and, therefore, any Form S-8 filed before vesting will be based on an estimate and may not cover all the shares required. Following the vesting of the Performance Units, the Company will reasonably promptly file an additional Form S-8, if required to register additional shares required to be issued in connection with the Performance Units.

(e) Benefits.

(i) Benefits Generally. Executive shall be entitled (A) to participate in the Company’s group health insurance program, group life insurance program, supplemental life insurance program, group short-term and long-term disability plans, and any tax-qualified and nonqualified retirement plans that are generally made available to other senior executives of the Company, and (B) for so long as the Company continues to maintain or otherwise make available a corporate aircraft, to make use of such aircraft in accordance with the Company’s current policy regarding business and personal use by executive officers. The Executive shall also be entitled to four weeks of vacation for each calendar year during the Term, and all Company holidays. The Executive shall be entitled to participate in any other benefit plans and programs, as determined by the Board from time to time.

(ii) Additional Benefits. In addition to the benefits provided pursuant to paragraph 3(e)(i), the Company shall provide Executive with supplemental long-term disability coverage and/or life insurance coverage (payable to the beneficiaries selected by Executive); provided, the aggregate annual premium cost of such disability and life insurance coverage during the Term does not exceed $50,000.

(f) Change of Control. Notwithstanding the provisions of any Option, Restricted stock, Stock Unit Award or other equity award agreement or arrangement between Executive and the Company to the contrary, any unvested Options, Restricted Stock and Stock Unit Awards held by Executive shall automatically vest, and any restrictions on any Restricted Stock held by Executive shall automatically lapse, in the event of a Change of Control. For purposes of this Agreement, the following terms have the following meanings:

“Affiliate” with respect to any person means a person that controls, is controlled by, or is under common control with such person.

“Change of Control” shall be deemed to have occurred if

(i) any “person” is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, (the “Act”)) directly or indirectly, of securities of the Company representing 35% or more of the total voting power represented by then outstanding voting securities of the Company (calculated in accordance with Rule 13d-3 of the Act), or has the power (whether as a result of stock ownership, revocable or irrevocable proxies, contract or otherwise) or ability to elect or cause the election of directors consisting at the time of such election of a majority of the Board; provided, that the term “persons” is defined in Sections 13(d) and 14(d) of the Act shall not include a trustee or other fiduciary holding securities under any employee benefit plan of the Company; or

(ii) there shall be consummated a merger of the Company, or a plan of complete liquidation of the Company, or an agreement for the sale or disposition by the Company of all or substantially all of its assets, or any other business combination of the Company with any other corporation, other than any such merger or business combination which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting

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securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or business combination; or

(iii) the individuals who constituted the Board of Directors as of the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority of the directors of the Company; provided, however, that: (i) individuals whose election, or whose nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board shall be considered, for purposes of this Agreement, members of the Incumbent Board; and provided, further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “election contest” (as described in Rule 14a-11 promulgated under the Act) (an “Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or entity other than the Company’s Board of Directors (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest.

“Options” means any and all options to purchase shares of common stock of the Company that have been, or at any time hereafter will be, granted by the Company to Executive, under any equity-based compensation plan or arrangement maintained by the Company.

“Restricted Stock” means any and all awards of common stock of the Company that are subject to certain restrictions as to vesting, transferability and rights as a stockholder that have been, or at any time hereafter will be, granted or awarded by the Company to Executive, under any equity-based compensation plan or arrangement maintained by the Company.

“Stock Unit Award” means an unfunded and unsecured promise of the Company to deliver to Executive, on the applicable vesting date for such award (or such later date determined pursuant to the terms of a timely deferral election, as applicable), either one share of common stock of the Company or cash equal to the fair value of one such share on such date, subject to the terms of the relevant grant agreement.

4. Expenses. Executive may incur reasonable business expenses while on Company business, including expenses for hotels, meals, air travel, telephone, automobile, gasoline and similar items. The Company shall either pay such reasonable out-of-pocket expenses directly or promptly reimburse Executive for such reasonable out-of-pocket expenses incurred by Executive upon presentation of receipts and an itemized accounting of the expenses for which reimbursement is sought and any other documentation necessary to comply with applicable Internal Revenue Service rules and regulations.

5. Termination.

(a) Payment of Accrued But Unpaid Amounts Upon Termination.

(i) Notwithstanding any provision in this Agreement to the contrary, in the event of termination of Executive’s employment for any reason during the Term, Executive or his beneficiaries or estate shall receive, in addition to any rights Executive may have under any equity-based compensation plan, arrangement or agreement maintained or entered into by the Company pursuant to which Executive has received any equity-based award, or any other payments or benefits required to be made or provided under the remaining provisions of this paragraph 5, within fifteen days (subject to the following sentence) after the effective date of termination: (i) any accrued but unpaid Base Salary for services rendered by Executive to the Company prior to the effective date of termination; (ii) any earned and vested but unpaid Annual Bonus award for the calendar year that has ended prior to the year of termination, and for this purpose, any such Annual Bonus shall be treated as earned and vested if Executive is employed on the last day of such calendar year; (iii) any earned and vested but unpaid awards due to Executive pursuant to the terms of the LTI Plan; (iv) a pro-rata Annual Bonus for the calendar year in which Executive’s termination occurs (other than in connection with a voluntarily resignation by Executive on or before December 31, 2006 or

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termination by the Company for Cause) pursuant to the terms of the Annual Incentive Plan; (v) reimbursement of any accrued but unpaid expenses required to be reimbursed under this Agreement that were incurred by Executive prior to the effective date of termination; and (vi) payment for any accrued but unpaid vacation time to the extent consistent with Company policy in effect at the time of termination. Notwithstanding the foregoing, the Company shall make payment with respect to any Annual Bonus and Performance Units promptly following the date on which (i) the Company’s earnings are announced or released (a) in the case of an Annual Bonus, for the fiscal year of the Company to which the Annual Bonus relates and (b) in the case of Performance Units, for the fiscal year of the Company as of the end of which the value of such units are to be determined in accordance with the LTI Plan; and (ii) the Compensation Committee of the Board has certified in writing the extent to which Executive is entitled to the payment of such Annual Bonus and Performance Units.

(ii) Except as specifically provided in this Agreement or under the terms of any incentive compensation, employee pension or welfare benefit plan in effect and applicable to Executive on the effective date of termination, Executive shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit of the Company after such termination and all other obligations of the Company and rights of Executive under this Agreement shall terminate effective as of the effective date of termination.

(b) Termination Due to Death or Disability. Executive’s employment with the Company shall automatically terminate upon Executive’s death. If Executive becomes “Disabled” (as hereinafter defined) at any time during the Term, the Company shall have the right to terminate Executive’s employment (provided that the Company shall first have made a reasonable accommodation pursuant to the Americans with Disabilities Act), which termination shall become effective upon a date not less than thirty calendar days following the date that written notice of such termination is given to Executive. For purposes of this Agreement, the term “Disability” or “Disabled” shall mean Executive’s inability to perform his material duties under this Agreement due to any illness or physical or mental disability or other incapacity as evidenced by a written statement of a physician licensed to practice medicine in any state in the United States mutually agreed upon by the Company and Executive, which disability or other incapacity continues for a period in excess of 180 days in any consecutive twelve-month period.

(c) Voluntary Resignation by Executive. Executive shall have the right to terminate his employment without Good Reason (as hereinafter defined) at any time prior to December 31, 2006, by giving not less than ninety days prior written notice of his resignation to the Company.

(d) Termination for Cause. Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote or not less than a majority of the Board of Directors finding that in the good faith opinion of such members of the Board, Executive was guilty of conduct set forth in any of clauses (A) through (D) of this paragraph 5(d), and specifying the particulars thereof in detail. For purposes of this Agreement, Cause shall mean: (A) Executive’s willful and continued failure to perform substantially his duties with the Company other than any such failure resulting from Executive’s Disability or any such failure resulting from Executive’s termination for Good Reason or retirement pursuant to paragraph 5(f), after (I) a written demand for substantial performance is delivered to Executive by the Board of Directors which specifically identifies the manner in which the Board believes that Executive has not performed his duties, and (II) the failure of Executive to reasonably comply with such demand within thirty days of notice to Executive, (B) Executive’s willful engagement in conduct materially and demonstrably injurious to the Company that is not cured by Executive within thirty days of notice to Executive, (C) Executive’s willful violation of paragraph 6 or 7 hereof that is not cured by Executive within thirty days of notice to Executive, or (D) Executive’s conviction of any felony from which all appeals have been exhausted. For purposes of this subparagraph, no act or failure to act on Executive’s part shall be considered “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company or any Affiliate.

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(e) Termination Without Cause or for Good Reason.

(i) Any termination by the Company other than due to death, Disability or Cause shall be treated as a termination by the Company without Cause (hereinafter, a termination “Without Cause”). The Company shall notify Executive of a termination Without Cause pursuant to a written notice to Executive, which shall specify the effective date of termination; provided, that, unless otherwise agreed by the parties, such effective date shall not be more than thirty days after the date of such notice. In the event of Executive’s termination Without Cause, the Company shall pay to Executive a severance payment equal to 2.99 times the sum of (I) Executive’s annual Base Salary in effect at the time of termination and (II) the highest annual bonus, if any, paid in cash, in-kind or otherwise by the Company (whether or not pursuant to the Annual Incentive Plan) to Executive during the three-year period immediately preceding the date of termination, (the “Severance Payment”). The Severance Payment shall be payable in cash in a lump sum within fifteen days of the termination of Executive’s employment.

(ii) This Agreement may be terminated by Executive for Good Reason upon written notice to the Company, which shall be effective as of the date such notice is delivered to the Company. In the event Executive terminates his employment for Good Reason, Executive shall receive the same Severance Payment as provided in paragraph 5(e)(i) in connection with a termination Without Cause. For the purpose of this paragraph 5(e), “Good Reason” means any of the following events unless it occurs with Executive’s express written consent, if the Company shall have failed to correct or remedy such event (if subject to correction or remedy) within thirty days following receipt of written notice from Executive describing such event and demanding correction or remedy: (A) the assignment to Executive of any significant duties inconsistent with, or a material diminution of, Executive’s position, duties, titles, offices, responsibilities or status with the Company, or any removal of Executive or any failure to appoint Executive to any of such positions, including as Chief Executive Officer, or failure to nominate Executive to serve as a director and as Vice Chairman of the Board of Directors (provided, that if Executive is then serving as Chairman of the Board, then failure to nominate Executive to continue to serve as Chairman); (B) a reduction in Executive’s Base Salary required to be paid hereunder, or failure by the Company to pay or provide for any vested and earned Annual Bonus, or any vested and earned award under the LTI Plan; (C) any failure by the Company to provide Executive with benefits described in paragraph 3(e); (D) a substantial increase in the level of Executive’s business travel obligations, as required by the Board, compared to Executive’s previous travel obligations during the period of his employment with the Company; (E) a relocation of the Company’s principal executive offices more than 35 miles from the location of such offices as provided in paragraph 19 herein, or requirement by the Company that Executive perform his employment duties hereunder at any location other than the Company’s principal executive offices, (F) any failure by the Company to obtain the assumption of this Agreement by any successor to or assignee of the Company, or (G) a material breach of this Agreement by the Company.

Notwithstanding the foregoing, Executive shall also be entitled to voluntarily terminate his employment with the Company for any reason by giving not less than thirty days’ advance written notice to the Company of his intention to terminate his employment at any time within the one-year period following any termination of, or material amendment to, the LTI Plan by the Company in connection with a Change of Control or otherwise that adversely affects the ability of Executive to realize the full potential value of the 275,000 Performance Units awarded to Executive as described in paragraph 3(c), and any such termination shall be considered a termination for Good Reason for purposes of this Agreement. Notwithstanding the foregoing, the Company may, at its option, elect to pay to Executive the difference between (i) the amount (if any) actually realized by Executive on such Performance Units that vested coincident with or prior to such termination or amendment of the LTI Plan and (ii) the maximum potential value of such Performance Units; and, in such case, the termination or amendment of the Plan will not give Executive the right to terminate his employment for Good Reason as aforesaid. Any such election by the Company must be made within 20 days of the termination or amendment to the LTI Plan.

(f) Retirement by Executive. For purposes of this Agreement, Executive may elect to terminate his employment due to retirement at any time after December 31, 2006, by giving not less than ninety days

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prior written notice of his intention to retire from the Company, and receive the following benefits and payments. If this Agreement is terminated pursuant to this paragraph 5(f), the Company shall pay to Executive a retirement payment in a lump sum in cash within fifteen days of such retirement date, as follows: In the event such retirement occurs during 2007, Executive shall receive a retirement payment equal to 1.5 times the sum of (A) Executive’s annual Base Salary in effect at the time of retirement, and (B) the highest Annual Bonus, if any, paid in cash, in-kind or otherwise by the Company to Executive during the three-year period immediately preceding the date of retirement. In the event such retirement occurs during 2008, Executive shall receive a retirement payment equal to two times the sum of (A) Executive’s annual Base Salary in effect at the time of retirement, and (B) the highest Annual Bonus, if any, paid in cash, in-kind or otherwise by the Company to Executive during the three-year period immediately preceding the date of retirement. In the event such retirement occurs during 2009 or later, Executive shall receive a retirement payment equal to 2.5 times the sum of (A) Executive’s annual Base Salary in effect at the time of retirement, and (B) the highest Annual Bonus, if any, paid in cash, in-kind or otherwise by the Company to Executive during the three-year period immediately preceding the date of retirement. In addition, for the period of time equal to the retirement payment multiplier (for purposes of clarity, 1.5 times equals 18 months, 2 times equals 24 months, and 2.5 times equals 30 months) following Executive’s retirement, the Company shall continue to provide Executive, at the Company’s expense, with continued benefits comparable to those provided to Executive in accordance with paragraph 3(e) immediately prior to his retirement (excluding benefits relating to the Company’s corporate aircraft), subject in all cases to Executive’s eligibility to continue to participate under the terms of the relevant benefit plan or plans of the Company following his termination of employment with the Company, and with respect to the continuation of the additional benefits provided in paragraph 3(e)(ii), such continued coverage shall be subject to the annual limit on premium cost provided in such paragraph. Notwithstanding any provision in this Agreement to the contrary, it is acknowledged and agreed by the parties hereto that (i) the Restricted Stock awarded to Executive pursuant to that certain Senior Restricted Stock Agreement dated June 5, 2001 between the Company and Executive (the “Senior Restricted Stock Agreement”) shall vest and shall otherwise be governed by the terms of the Senior Restricted Stock Agreement, and (ii) Executive’s right to benefits under this Agreement are in addition to, and not in limitation upon, his rights under the Senior Restricted Stock Agreement and under the agreement relating to stock options dated January 1, 2003.

6. Non-Competition and Non-Solicitation.

(a) During the Term and for a period of twelve months immediately following the termination of this Agreement for any reason, Executive will not, directly or indirectly, for himself or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business of whatever nature establish, enter into, be employed by or for, advise, consult with or become a part of, any company, partnership, corporation or other business entity or venture, or in any way engage in business for himself or for others, in competition with the Company.

(b) During the Term and for a period of twenty-four months immediately following the termination of this Agreement for any reason, Executive will not, directly or indirectly, for himself or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business of whatever nature, solicit or induce, or attempt to solicit or induce, (i) any person that has any material business relationship with the Company (including, without limitation, any consultants or suppliers) to terminate or modify such relationship or otherwise take any action detrimental in any material respect to such relationship, (ii) any of the Company’s customers to become customers of any business that is competitive with any aspect of the Company’s business; or (iii) any person to leave the employ of the Company.

(c) Because of the difficulty of measuring economic losses to the Company as a result of breach by Executive of the foregoing covenants, and because of the immediate and irreparable damage that might be caused to the Company for which it would have no other adequate remedy, Executive agrees that, without limiting the remedies available to the Company, the foregoing covenants may be enforced by the Company by injunctions and restraining orders.

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(d) The parties agree that the covenants in this paragraph 6 impose a reasonable restraint on Executive in light of the activities and business of the Company on the date of this Agreement, and the Company and Executive intend that such covenants shall subsequently be construed and enforced in light of the activities and business of the Company on the date of the termination of the employment of Executive. The covenants in this paragraph 6 are intended to be severable and separate, and the unenforceability of any specific covenant shall not affect the enforceability of any other covenant.

7. Confidentiality.

(a) During the Term and at all times following the termination of this Agreement, Executive will not, except in furtherance of the business of the Company, directly or indirectly (i) disclose to any person or entity, without the Company’s prior consent, any confidential information, whether prepared by him or others, (ii) use any such information other than as directed by the Company in writing, or (iii) remove confidential information from the premises of the Company without the prior written consent of the Company.

(b) Confidential information includes, but is not limited to: (i) the name of any company or business all or any substantial part of which is or at any time was a candidate for potential acquisition by the Company, together with all analyses and other information that the Company has generated, compiled or otherwise obtained with respect to such candidate, business or potential acquisition, or with respect to the potential effect of such acquisition on the Company’s business, assets, financial results or prospects, (ii) business, pricing and management methods, (iii) finances, strategies, systems, research, surveys, plans, reports, recommendations and conclusions, (iv) names, arrangements with, or other information relating to, the Company’s customers, suppliers, equipment manufacturers, financiers, owners or operators, representatives and other persons who have business relationships with the Company or who are prospects for business relationships with the Company, (v) technical information, work products and know-how, and (vi) cost, operating, and other management information systems, and other software and programming.

(c) Notwithstanding any other provision of this Agreement, (i) confidential information shall not include information that has been previously disclosed to the public by the Company or that is in the public domain, other than by reason of Executive’s breach of this paragraph 7, and (ii) disclosure by Executive of confidential information that is required in connection with any judicial or administrative proceeding or inquiry shall not be treated as a breach of this paragraph 7, provided Executive has to the extent practicable given the Company at least 10 days’ notice of request therefor (unless otherwise precluded by law) and has cooperated with the Company in its attempts to obtain confidential treatment of any request for confidential information.

8. Company Property. All products, records, designs, patents, plans, manuals, memoranda, lists and other property delivered to Executive by or on behalf of the Company or by its customers, and all records compiled by Executive that pertain to the business of the Company (whether or not confidential) shall be and remain the property of the Company and be subject at all times to its discretion and control. Likewise, all correspondence with customers or representatives, reports, records, charts, advertising materials, and any data collected by Executive, or by or on behalf of the Company or its representatives (whether or not confidential) shall be delivered promptly to the Company upon request by it upon termination of Executive’s employment.

9. Intellectual Property. Executive shall disclose promptly to the Company any and all conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or not, which are conceived or made by Executive solely or jointly with another during the Term, and which are related to the business or activities of the Company or which Executive conceives as a result of his employment by the Company, and Executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, Executive shall execute any and all applications, assignments or other instruments that the Company shall deem necessary to evidence such assignment to the Company or to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest in such intellectual property. The obligations set forth in this

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paragraph 9 shall continue beyond the termination of this Agreement with respect to inventions, improvements, and valuable discoveries, whether patentable or not, conceived or made by Executive during the Term and shall be binding upon Executive and his assigns, executors, administrators and other legal representatives.

10. Cooperation in Proceedings. After the termination of Executive’s employment with the Company, Executive shall continue to make himself reasonably available at reasonable times, so as not to unreasonably interfere with his ongoing business activities, to the Company to advise the Company, at its request, about disputes with third parties as to which Executive has knowledge, and, Executive agrees to cooperate fully with the Company in connection with litigation, arbitrations and similar proceedings and to provide testimony with respect to Executive’s knowledge in any such litigation, arbitrations and similar proceedings involving the Company, in all cases without additional compensation or consideration from the Company. In the event Executive is requested to cooperate with the Company as provided in this paragraph 10, the Company shall reimburse Executive for his reasonable out-of-pocket, travel, lodging expenses and, under circumstances where there is a conflict and Executive cannot be adequately represented by counsel for the Company, legal expenses. Under circumstances where Executive can be adequately represented by counsel for the Company without conflict of interest, the Company shall have an affirmative obligation to cause such counsel to fairly represent Executive’s interests in such litigation, arbitrations or similar proceedings at the Company’s cost, and the determination whether Executive can be adequately represented by counsel without conflict of interest shall be made in good faith by the Company’s counsel according to the cannons of ethics of the New York State Bar Association.

11. Indemnification.

(a) The Company agrees to continue and maintain a directors and officers liability insurance policy covering Executive both during Executive’s employment and after Executive’s termination of his employment with respect to acts or omissions that occurred prior to Executive’s termination of employment, on such terms as are no less favorable to Executive than the terms generally applicable to the Company’s executive officers generally.

(b) The Company and Executive are parties to an Indemnification Agreement dated as of the date hereof (the “Indemnification Agreement”), and the parties hereto agree that the Indemnification Agreement shall govern Executive’s rights with respect to indemnification by reason of the fact that Executive is or was an officer, director or employee of the Company or is or was serving as an officer, director, member, employee, trustee or agent of any other entity at the request of the Company.

12. Taxes. The payment of any compensation amounts to Executive hereunder shall be subject to all federal, state and local withholding taxes, social security deductions and any other required payroll deductions.

13. Certain Additional Payments.

(a) If all or any portion of the payments and benefits which Executive is entitled to receive pursuant to the terms of this Agreement or any other plan, arrangement or agreement in respect of the Company or its Affiliates (the “Payments”) constitutes “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), that are subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code (or similar tax and/or assessment under state, local or other laws), the Company (or its successors or assigns) shall promptly pay to Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive, after deduction of (i) any Excise Tax on the Payments, (ii) any federal, state and local income tax and Excise Tax upon the Gross-Up Payment, and (iii) any interest and penalties assessed in respect of the Excise Tax shall be equal to the full amount of the Payments. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rates of taxation in the state and locality of Executive’s residence on the date the Gross-Up Payment is to be

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made, net of the maximum reduction in federal income taxes which can be obtained from deduction of such state and local taxes.

(b) All determinations with respect to the Gross-Up Payment for any Payments shall be made in writing by a nationally recognized firm of certified public accountants selected by the Company (the “Accountants”) The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph 13. The Company shall bear all fees and costs the Accountants may reasonably charge or incur in connection with any calculations contemplated by this paragraph 13.

(c) If the Excise Tax is ultimately determined by the Internal Revenue Service (the “IRS”) to be less than the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 13(a), Executive shall repay to the Company, within ten (10) days after the time that the amount of such reduction in Excise Tax is determined by the IRS, the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code for debt instruments with a maturity after issuance equal to the period beginning on the date the Gross-Up Payment was made and ending on the date of repayment required by this sentence. If the Excise Tax is determined to exceed the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 13(a), the Company within ten (10) days after the time that the amount of such excess Excise Tax is determined by the IRS shall make an additional payment to Executive of an amount equal to (i) such excess Excise Tax, (ii) any federal, state and local income tax (determined pursuant to the last sentence of paragraph 13(a)) upon payments made pursuant to this sentence for such excess Excise Tax, and (iii) any interest and penalties payable to the IRS with respect to such excess Excise Tax.

14. No Right of Set-off, Etc. Except as set forth in this Agreement, the obligation of the Company to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including without limitation, set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others.

15. No Obligation to Mitigate. In no event shall Executive be obliged to seek other employment or consulting or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by Executive as a result of self-employment or employment by another employer.

16. Complete Agreement; Existing Agreement. Except as otherwise expressly provided herein or under the terms of any other pre-existing equity compensation agreement, there are no oral representations, understandings or agreements with the Company or any of its officers, directors or representatives covering the same subject matter as this Agreement (including the Existing Agreement). This written Agreement is the final, complete and exclusive statement and expression of the agreement between the Company and Executive and of all the terms of this Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or written agreements. Except as otherwise expressly provided herein, this written Agreement may not later be modified except by a further writing signed by the Company and Executive, and no terms of this Agreement may be waived except by a writing signed by the party waiving the benefit of such term. Upon execution of this Agreement by the parties hereto, the Existing Agreement shall be deemed null and void (it being acknowledged that no provisions thereof survives notwithstanding it being stated in the Existing Agreement that a particular provision will survive termination).

17. No Waiver. No waiver by the parties hereto of any default or breach of any term, condition or covenant of this Agreement shall be deemed to be a waiver of any other term, condition or covenant contained herein or on any subsequent default or breach of the same term, condition or covenant.

18. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties thereto and their respective heirs, executors, administrators, representatives, successors and assigns.

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19. Notice. Whenever any notice is required hereunder, it shall be given in writing addressed as follows:

To the Company: United Rentals, Inc.

 Five Greenwich Office Park

 Greenwich, Connecticut 06830

 Facsimile: (203) 622-6080

 Attention: Legal Department

To the Executive: To his home address as shown on the records of the Company,

 Attention: Wayland R. Hicks

Notice shall be deemed given and effective (a) three (3) business days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail, certified, return receipt requested, (b) when received by the addressee, if sent by a nationally recognized air courier for next day delivery service (receipt requested), or (c) upon personal delivery (with written confirmation of receipt). Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph 19.

20. Severability; Headings. If any portion of this Agreement is held invalid or inoperative, the other portions of this Agreement shall be deemed valid and operative, and so far as it is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The paragraph headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of this Agreement or any part hereof,

21. Governing Law; Forum Selection. This Agreement shall be construed in all respects in accordance with the laws of the State of Delaware, without giving effect to its conflicts of laws principles. Any litigation instituted by any party to this Agreement pertaining to this Agreement must be filed before a court of competent jurisdiction in Connecticut or Delaware and both parties hereby consent irrevocably to the jurisdiction of such courts over them.

22. Legal Fees and Expenses. The Company shall pay the reasonable legal fees, costs and expenses incurred by Executive in connection with any action arising under this Agreement, provided that any dispute or controversy between the parties regarding this Agreement is resolved in any manner in favor of Executive. Upon any initial determination in favor of Executive, the Company shall advance to Executive an amount equal to Executive’s previously incurred legal fees and a reasonable estimate of any legal fees, costs and expenses that may be incurred by Executive in connection with the final resolution of such matter. In addition, the Company shall pay or reimburse Executive for attorneys’ fees incurred by Executive in connection with the negotiation and preparation of this Agreement, and it is agreed that the payment or reimbursement of such fees shall be considered a working condition fringe benefit. This paragraph 22 shall not affect Executive’s common-law or statutory indemnification rights, or any agreements or other arrangements between the parties relating to indemnification.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written.

UNITED RENTALS, INC.
By:
Title:
	Wayland R. Hicks

This Agreement has been approved and authorized by the special compensation committee of the board of directors of United Rentals, Inc. at a meeting held on April 8, 2004.

Michael S. Gross, member of committee

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Exhibit A

2001 SENIOR STOCK PLAN

RESTRICTED STOCK UNIT AGREEMENT

Awardee: Wayland R. Hicks (“Awardee”)

Grant Date: April 8, 2004

Restricted Stock Units: 200,000

This RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) is made as of the Grant Date by and between UNITED RENTALS, INC., a Delaware corporation having an office at Five Greenwich Office Park, Greenwich, CT 06830 (the “Company”), and Awardee. Capitalized terms not defined herein shall have the meanings ascribed to them in the Company’s 2001 Senior Stock Plan (the “Plan”).

In consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Restricted Stock Units. The Company hereby grants 200,000 Restricted Stock Units (the “Units”) to Awardee pursuant to the Plan, subject to the terms and conditions of this Agreement and the Plan.

2. Vesting; Forfeiture. The Units shall vest and become nonforfeitable as follows: (A) 33,333 Units shall vest on January 1, 2005, 33,333 Units shall vest on July 1, 2005, and 33,334 Units shall vest on January 1, 2006 (provided in each case that Awardee’s employment with the Company continues through such date), and (B) 100,000 Units shall vest on December 31, 2008 (provided Awardee’s employment with the Company continues through the scheduled end of the term of Awardee’s employment, without giving effect to any renewal periods, as provided in the Employment Agreement between Awardee and the Company dated April 8, 2004 (the “Employment Agreement”)). Notwithstanding the foregoing, (A) in the event of a Change of Control (as defined in the Employment Agreement), any unvested Units shall become immediately vested and nonforfeitable upon the occurrence of such event, (B) in the event of the termination of Awardee’s employment due to death or Disability (as defined in the Employment Agreement) on or prior to January 1, 2006, any unvested Units that were scheduled to vest on or prior to January 1, 2006, shall become immediately vested and nonforfeitable and the remaining unvested Units shall be cancelled and forfeited and (C) in the event of the termination of Awardee’s employment by the Company without Cause (as defined in the Employment Agreement) or Awardee’s termination for Good Reason (as defined in the Employment Agreement), then an “appropriate fraction” (as hereinafter defined) of each separate tranche of any unvested Units shall become immediately vested and nonforfeitable and the remaining unvested Units shall be cancelled and forfeited. For purposes of the foregoing, the “appropriate fraction” with respect to any tranche of Units means: (i) the amount of time that has elapsed from the grant date of such Units to the occurrence of the event triggering accelerated vesting divided by (ii) the total amount of time from the grant date to the scheduled vesting date for such Units absent accelerated vesting. For purposes of the foregoing, the Units scheduled to vest on different dates will be considered separate tranches and the calculation of the appropriate fraction will be made separately for each tranche as if such tranche were the only tranche (i.e., the Units scheduled to vest on January 1, 2005 are one tranche, those scheduled to vest on July 1, 2005 a second tranche, those scheduled to vest on January 1, 2006 a third tranche and those scheduled to vest on December 31, 2008 a fourth tranche). In the event of the termination of Awardee’s employment by the Company for Cause, or Awardee’s voluntary resignation (including retirement pursuant to paragraph 5(f) of the Employment Agreement prior to the expiration of the Term without giving effect to any renewal periods) without Good Reason (as defined in the Employment Agreement), any unvested Units shall be cancelled and forfeited.

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3. Payment upon Vesting. Vested Units shall be settled in Stock on a one-for-one basis. Within five (5) business days following the each date on which one or more Units vest, the Company shall deliver to Awardee (or Awardee’s beneficiary or estate, if no beneficiary is designated or in the event any chosen beneficiary predeceases Awardee, in the event of the death of Awardee) a certificate, free and clear of any restrictive legend, representing a number of shares of Stock equal to the number of Units that vested on such date.

4. Deferral of Delivery of Shares of Stock. Awardee may elect to defer the receipt of shares of Stock upon the vesting of any Unit by filing a deferral election form with the Company at least one year prior to the vesting date of such Unit; provided, however, that Awardee may file a deferral election form relating to any one or more Units within thirty (30) days following the Grant Date. The Company shall establish such other rules and regulations providing for the deferral of the delivery of shares of Stock as may be necessary to ensure that such deferred delivery will not result in taxation to Awardee until shares are actually delivered.

5. Dividends and Dividend Equivalents. No dividends or dividend equivalents shall accrue or be paid with respect to any Units.

6. Transferability. Units are not transferable by the Awardee, whether by sale, assignment, exchange, pledge, or hypothecation, or by operation of law or otherwise.

7. Transferability of Shares of Stock. The Company shall, to the extent it has not already done so, file a Registration Statement on Form S-8 (or otherwise) with the Securities and Exchange Commission relating to the shares of Stock to be delivered hereunder and comply with all applicable state securities laws prior to the distribution of shares of Stock hereunder and to do everything else necessary to ensure that shares of Stock delivered to Awardee upon or following the vesting of any Unit will not be treated as “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act.

8. Conformity with Plan. Except as specifically set forth herein, this Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan, which is incorporated herein by reference. Any inconsistencies between this Agreement and the Plan with respect to any mandatory provisions of the Plan shall be resolved in accordance with the terms of the Plan. By executing and returning the enclosed copy of this Agreement, Awardee acknowledges its receipt of the Plan and its agreement to be bound by all the terms of the Plan. All definitions stated in the Plan apply to this letter.

9. Withholding Taxes. Awardee shall pay to the Company, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of the vesting or distribution of shares of Stock hereunder no later than the date of the event creating the tax liability. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Awardee, including any shares of Stock to be delivered hereunder. In the event that payment to the Company of such tax obligations is made in shares of Stock, such shares shall be valued at their fair market value on the applicable date for such purposes.

10. Awardee Advised To Obtain Personal Counsel and Tax Representation. IMPORTANT: The Company and its employees do not provide any guidance or advice to individuals who may be granted an Award under the Plan regarding the federal, state or local income tax consequences or employment tax consequences of participating in the Plan. Each person who may be entitled to any benefit under the Plan is responsible for determining their own personal tax consequences of participating in the Plan. Accordingly, you may wish to retain the services of a professional tax advisor in connection with any Awards under the Plan.

11. Gross-up. Under the Employment Agreement, Awardee is entitled to certain gross-up amounts in respect of payments and benefits which constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”). The Company confirms that such gross-up payments also apply to payments and benefits in respect of the Units.

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12. Beneficiary Designation. Awardee may designate one or more beneficiaries, from time to time, to whom any benefit under this Agreement is to be paid in case of Awardee’s death. Each designation must be in writing, signed by Awardee and delivered to the Company. Each new designation will revoke all prior designations.

13. Adjustments for Changes in Capital Structure. In the event of any change in capital structure or business of the Company by reason of any Stock dividend or extraordinary dividend, Stock split or reverse Stock split, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares of Stock, non-cash distributions with respect to its outstanding Stock, reclassification of the Company’s capital stock, any sale or transfer of all or part of the Company’s assets or business, or any similar change affecting the Company’s capital structure or business or the capital structure of any business of any Subsidiary, the Administrator shall make such appropriate adjustments to the Units as are equitable and reasonably necessary or desirable to preserve the intended benefits under this Agreement.

14. Miscellaneous.

(a) This Agreement may not be changed or terminated except by written agreement signed by the Company and Awardee. It shall be binding on the parties and on their personal representatives and permitted assigns.

(b) This Agreement sets forth all agreements of the parties. It supersedes and cancels all prior agreements with respect to the subject matter hereof. It shall be enforceable by decrees of specific performance (without posting bond or other security) as well as by other available remedies.

(c) This Agreement shall be governed by, and construed in accordance with, the laws of Delaware. Any litigation instituted by any party to this Agreement pertaining to this Agreement must be filed before a court of competent jurisdiction in Connecticut or Delaware and both parties hereby consent irrevocably to the jurisdiction of such courts over them.

(d) The Company shall pay the reasonable legal fees, costs and expenses incurred by Awardee in connection with any action arising under this Agreement, provided that any dispute or controversy between the parties regarding this Agreement is resolved in any manner in favor of Awardee. Upon any initial determination in favor of Awardee, the Company shall advance to Awardee an amount equal to Awardee’s previously incurred legal fees and a reasonable estimate of any legal fees, costs and expenses that may be incurred by Awardee in connection with the final resolution of such matter. In addition, the Company shall pay or reimburse Awardee for attorneys’ fees incurred by Awardee in connection with the negotiation and preparation of this Agreement. This paragraph shall not affect Awardee’s common-law or statutory indemnification rights, or any agreements or other arrangements between the parties relating to indemnification.

(e) All notices, requests, service of process, consents, and other communications under this Agreement shall be in writing. Notice shall be deemed given and effective (a) three (3) business days after the deposit in the U.S. mail of a writing addressed as provided below and sent first class mail, certified, return receipt requested, (b) when received by the addressee, if sent by a nationally recognized air courier for next day delivery service (receipt requested), or (c) upon personal delivery (with written confirmation of receipt). Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph. Notices shall be addressed (i) to Awardee at the last address he or she has filed in writing with the Company and (ii) to the Company at its principal offices attention Legal Department. Either party hereto may designate a different address by providing written notice of such new address to the other party hereto as provided above.

(f) This Agreement may be signed in one or more counterparts, each of which shall be an original, with the same effect as if the signature thereto and hereto were upon the same instrument.

Dated: As of April 8, 2004

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

UNITED RENTALS, INC.
By:
	Name:
	Title:
AWARDEE:
By:
	Name:
	Title:

This Agreement has been approved and authorized by the special compensation committee of the board of directors of United Rentals, Inc. at a meeting held on April 8, 2004.

Michael S. Gross, member of committee

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EX-10.G

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on April 8, 2004, between UNITED RENTALS, INC., a Delaware corporation (the “Company”), and John N. Milne (“Executive”).

WHEREAS, Executive is currently employed as the President and Chief Financial Officer of the Company and serves as Vice Chairman and as a director of the Board of Directors of the Company; and

WHEREAS, Executive is party to an employment agreement with the Company dated September 19, 1997, as amended December 24, 1999, (the “Existing Agreement”); and

WHEREAS, the parties hereto desire to enter into this Agreement in order to set forth the terms pursuant to which the Company will continue to employ Executive and Executive will continue to serve as the President and Chief Financial Officer; and

WHEREAS, the parties hereto desire that this Agreement will replace and supercede the Existing Agreement, and that as of the Effective Time (as defined below), the Existing Agreement shall be null and void.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties hereto agree as follows:

1. Employment and Duties. During the Term (as hereinafter defined), the Company shall employ Executive as its President and Chief Financial Officer, and in such other positions as are commensurate with his status as President and Chief Financial Officer of the Company, as determined from time to time by the Company’s Board of Directors (the “Board of Directors” or the “Board”). Executive shall have such duties and authorities as are customary for the President and Chief Financial Officer of a publicly held corporation of the size, type and nature of the Company.

2. Term. Subject to the provisions for termination included in this Agreement, the term of Executive’s employment hereunder shall be for a period of five years commencing as of January 1, 2004 (the “Effective Time”) and ending December 31, 2008 (the “Term”). Unless either party gives notice of non-renewal at least 60 day prior to the end of the then current Term, the Term will extend for successive one-year renewal periods.

3. Compensation and Other Benefits. For all services rendered by Executive to or on behalf of the Company or its Affiliates (as defined below) during the Term, the Company shall compensate Executive as follows:

(a) Base Salary. Effective as of the Effective Time, the base salary payable to Executive shall be $550,000 per annum (the “Base Salary”), with annual increases, if any, as may be approved in writing in the sole discretion of the Compensation Committee of the Board. The Base Salary shall be payable bi-weekly in arrears in accordance with the Company’s normal payroll practices. The official action of the Board of Directors increasing the Base Salary, if at all, shall be deemed to amend the amount of the Base Salary stated in this paragraph 3(a).

(b) Annual Incentive Bonus Plan. Executive shall be entitled to receive, in respect of each calendar year during the Term, an annual cash incentive bonus (the “Annual Bonus”) pursuant to the terms of the Company’s Annual Incentive Compensation Plan (the “Annual Incentive Plan”). The parties hereto acknowledge that Executive’s performance goals and target bonus amounts for 2004 have previously been provided to Executive. The performance goals and target bonus amounts for each subsequent year during the Term shall be set forth in a performance plan to be determined by the Compensation Committee of the Board in good faith and delivered to Executive within 90 days of the beginning of each calendar year during the Term; provided that the target bonus amounts for any such subsequent year shall not be less than the target bonus amounts for the 2004 plan year. Except as otherwise provided in this Agreement, the Annual Bonus shall be paid to Executive at such times and in such amounts as provided in the Annual Incentive Plan.

(c) Long-Term Performance Unit Plan. The Company has approved, and proposes to submit for stockholder approval at its 2004 meeting of stockholders, a Long-Term Incentive Plan (the “LTI Plan”) for certain officers and senior employees of the Company. The Committee of the Board that administers the LTI Plan has awarded 275,000 performance units (the “Performance Units”) under the LTI Plan to Executive, subject to approval of the LTI Plan by the Company’s stockholders. Except as otherwise provided in this Agreement, the Performance Units shall vest and shall be paid to Executive pursuant to the terms of the LTI Plan.

(d) Equity Awards.

(i) Contemporaneously with the approval of this Agreement, the Compensation Committee of the Board has awarded to Executive 160,000 Stock Units (the “Stock Unit Award”) under the Company’s 2001 Senior Stock Plan, as amended (the “Stock Plan”). The Stock Units granted pursuant to the Stock Unit Award as aforesaid (the “Stock Units”) shall vest and become nonforfeitable as follows: (A) 20,000 Stock Units shall vest on January 1, 2005, 20,000 Stock Units shall vest on July 1, 2005, and 20,000 Stock Units shall vest on January 1, 2006 (provided in each case that Executive’s employment with the Company continues through such date), and (B) 100,000 Stock Units shall vest on December 31, 2008 (provided Executive’s employment with the Company continues through the scheduled end of the Term without giving effect to any renewal periods). Notwithstanding the foregoing, (A) in the event of a Change of Control (as defined below), any unvested Stock Units shall become immediately vested and nonforfeitable upon the occurrence of such event, (B) in the event of the termination of Executive’s employment due to death or Disability (as defined below) on or prior to January 1, 2006, any unvested Stock Units that were scheduled to vest on or prior to January 1, 2006, shall become immediately vested and nonforfeitable and the remaining unvested Stock Units shall be cancelled and forfeited and (C) in the event of the termination of Executive’s employment by the Company without Cause (as defined below) or Executive’s termination for Good Reason (as defined below), then an “appropriate fraction” (as hereinafter defined) of each separate tranche of any unvested Stock Units shall become immediately vested and nonforfeitable and the remaining unvested Stock Units shall be cancelled and forfeited. For purposes of the foregoing, the “appropriate fraction” with respect to any tranche of Stock Units means: (i) the amount of time that has elapsed from the grant date of such Stock Units to the occurrence of the event triggering accelerated vesting divided by (ii) the total amount of time from the grant date to the scheduled vesting date for such Stock Units absent accelerated vesting. For purposes of the foregoing, the Stock Units scheduled to vest on different dates will be considered separate tranches and the calculation of the appropriate fraction will be made separately for each tranche as if such tranche were the only tranche (i.e., the Stock Units scheduled to vest on January 1, 2005 are one tranche, those scheduled to vest on July 1, 2005 a second tranche, those scheduled to vest on January 1, 2006 a third tranche and those scheduled to vest on December 31, 2008 a fourth tranche). In the event of the termination of Executive’s employment by the Company for Cause, or Executive’s voluntary resignation without Good Reason (as defined below), any unvested Stock Units shall be cancelled and forfeited. The Stock Units shall be settled in the common stock of the Company on a one-for-one basis. The Stock Unit Award shall be subject to such other terms and conditions as are provided in the grant agreement between Executive and the Company, attached hereto as Exhibit A, which terms shall not be inconsistent with this paragraph 3(d) and the Stock Plan. For the sake of clarity it is specified that the foregoing provisions only apply to the Stock Units granted pursuant to the Stock Unit Award and not to any other awards under the Stock Plan (which are or will be governed by the terms of the grant agreement related to such award except as specified in Section 3(f)).

(ii) Unless previously registered, the Company shall file with the Securities and Exchange Commission a Form S-8 registration statement registering any Company Stock not previously registered and issuable upon settlement of the Stock Units, the Performance Units and any other equity award previously granted, or to be granted, to Executive, whether pursuant to this Agreement or otherwise. Such Form S-8 shall be filed not later than the date on which such Stock Units, Performance Units or other equity awards become vested. Executive acknowledges that the number of shares of

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Common Stock that may be issued upon the settlement of the Performance Units will not be ascertainable until the vesting of such Performance Units and, therefore, any Form S-8 filed before vesting will be based on an estimate and may not cover all the shares required. Following the vesting of the Performance Units, the Company will reasonably promptly file an additional Form S-8, if required to register additional shares required to be issued in connection with the Performance Units.

(e) Benefits.

(i) Benefits Generally. Executive shall be entitled (A) to participate in the Company’s group health insurance program, group life insurance program, supplemental life insurance program, group short-term and long-term disability plans, and any tax-qualified and nonqualified retirement plans (but excluding the retirement arrangement provided in Section 5(f) of the employment agreement between the Company and Wayland R. Hicks dated April 8, 2004) that are generally made available to other senior executives of the Company, and (B) for so long as the Company continues to maintain or otherwise make available a corporate aircraft, to make use of such aircraft in accordance with the Company’s current policy regarding business and personal use by executive officers. The Executive shall also be entitled to four weeks of vacation for each calendar year during the Term, and all Company holidays. The Executive shall be entitled to participate in any other benefit plans and programs, as determined by the Board from time to time.

(ii) Additional Benefits. In addition to the benefits provided pursuant to paragraph 3(e)(i), the Company shall provide Executive with (A) supplemental long-term disability coverage, to the extent available, up to a maximum benefit of $15,000 per month, in addition to any benefits received by Executive under the Company’s group long-term disability plan, and (B) supplemental term life insurance coverage with a death benefit of $5 million (or such lesser amount of coverage as may be obtained consistent with the limit on the cost of such coverage noted below) (payable to the beneficiaries selected by Executive); provided, the aggregate annual premium cost of such disability and life insurance coverage during the Term does not exceed $50,000.

(f) Change of Control. Notwithstanding the provisions of any Option, Restricted stock, Stock Unit Award or other equity award agreement or arrangement between Executive and the Company to the contrary, any unvested Options, Restricted Stock and Stock Unit Awards held by Executive shall automatically vest, and any restrictions on any Restricted Stock held by Executive shall automatically lapse, in the event of a Change of Control. For purposes of this Agreement, the following terms have the following meanings:

“Affiliate” with respect to any person means a person that controls, is controlled by, or is under common control with such person.

“Change of Control” shall be deemed to have occurred if

(i) any “person” is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, (the “Act”)) directly or indirectly, of securities of the Company representing 35% or more of the total voting power represented by then outstanding voting securities of the Company (calculated in accordance with Rule 13d-3 of the Act), or has the power (whether as a result of stock ownership, revocable or irrevocable proxies, contract or otherwise) or ability to elect or cause the election of directors consisting at the time of such election of a majority of the Board; provided, that the term “persons” is defined in Sections 13(d) and 14(d) of the Act shall not include a trustee or other fiduciary holding securities under any employee benefit plan of the Company; or

(ii) there shall be consummated a merger of the Company, or a plan of complete liquidation of the Company, or an agreement for the sale or disposition by the Company of all or substantially all of its assets, or any other business combination of the Company with any other corporation, other than any such merger or business combination which would result in the voting securities of the Company outstanding immediately prior thereto

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continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or business combination; or

(iii) the individuals who constituted the Board of Directors as of the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority of the directors of the Company; provided, however, that: (i) individuals whose election, or whose nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board shall be considered, for purposes of this Agreement, members of the Incumbent Board; and provided, further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “election contest” (as described in Rule 14a-11 promulgated under the Act) (an “Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or entity other than the Company’s Board of Directors (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest.

“Options” means any and all options to purchase shares of common stock of the Company that have been, or at any time hereafter will be, granted by the Company to Executive, under any equity-based compensation plan or arrangement maintained by the Company.

“Restricted Stock” means any and all awards of common stock of the Company that are subject to certain restrictions as to vesting, transferability and rights as a stockholder that have been, or at any time hereafter will be, granted or awarded by the Company to Executive, under any equity-based compensation plan or arrangement maintained by the Company.

“Stock Unit Award” means an unfunded and unsecured promise of the Company to deliver to Executive, on the applicable vesting date for such award (or such later date determined pursuant to the terms of a timely deferral election, as applicable), either one share of common stock of the Company or cash equal to the fair value of one such share on such date, subject to the terms of the relevant grant agreement.

4. Expenses. Executive may incur reasonable business expenses while on Company business, including expenses for hotels, meals, air travel, telephone, automobile, gasoline and similar items. The Company shall either pay such reasonable out-of-pocket expenses directly or promptly reimburse Executive for such reasonable out-of-pocket expenses incurred by Executive upon presentation of receipts and an itemized accounting of the expenses for which reimbursement is sought and any other documentation necessary to comply with applicable Internal Revenue Service rules and regulations.

5. Termination.

(a) Payment of Accrued But Unpaid Amounts Upon Termination.

(i) Notwithstanding any provision in this Agreement to the contrary, in the event of termination of Executive’s employment for any reason during the Term, Executive or his beneficiaries or estate shall receive, in addition to any rights Executive may have under any equity-based compensation plan, arrangement or agreement maintained or entered into by the Company pursuant to which Executive has received any equity-based award, or any other payments or benefits required to be made or provided under the remaining provisions of this paragraph 5, within fifteen days (subject to the following sentence) after the effective date of termination: (i) any accrued but unpaid Base Salary for services rendered by Executive to the Company prior to the effective date of termination; (ii) any earned and vested but unpaid Annual Bonus award for the calendar year that has ended prior to the year of termination, and for this purpose, any such Annual Bonus shall be treated as earned and vested if Executive is employed on the last day of such calendar year; (iii) any earned and vested but unpaid awards due to Executive pursuant to the terms of the LTI Plan; (iv) a pro-rata Annual Bonus for the calendar year in which Executive’s termination occurs (other

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than in connection with a voluntarily resignation by Executive or termination by the Company for Cause) pursuant to the terms of the Annual Incentive Plan; (v) reimbursement of any accrued but unpaid expenses required to be reimbursed under this Agreement that were incurred by Executive prior to the effective date of termination; and (vi) payment for any accrued but unpaid vacation time to the extent consistent with Company policy in effect at the time of termination. Notwithstanding the foregoing, the Company shall make payment with respect to any Annual Bonus and Performance Units promptly following the date on which (i) the Company’s earnings are announced or released (a) in the case of an Annual Bonus, for the fiscal year of the Company to which the Annual Bonus relates and (b) in the case of Performance Units, for the fiscal year of the Company as of the end of which the value of such units are to be determined in accordance with the LTI Plan; and (ii) the Compensation Committee of the Board has certified in writing the extent to which Executive is entitled to the payment of such Annual Bonus and Performance Units.

(ii) Except as specifically provided in this Agreement or under the terms of any incentive compensation, employee pension or welfare benefit plan in effect and applicable to Executive on the effective date of termination, Executive shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit of the Company after such termination and all other obligations of the Company and rights of Executive under this Agreement shall terminate effective as of the effective date of termination.

(b) Termination Due to Death or Disability. Executive’s employment with the Company shall automatically terminate upon Executive’s death. If Executive becomes “Disabled” (as hereinafter defined) at any time during the Term, the Company shall have the right to terminate Executive’s employment (provided that the Company shall first have made a reasonable accommodation pursuant to the Americans with Disabilities Act), which termination shall become effective upon a date not less than thirty calendar days following the date that written notice of such termination is given to Executive. For purposes of this Agreement, the term “Disability” or “Disabled” shall mean Executive’s inability to perform his material duties under this Agreement due to any illness or physical or mental disability or other incapacity as evidenced by a written statement of a physician licensed to practice medicine in any state in the United States mutually agreed upon by the Company and Executive, which disability or other incapacity continues for a period in excess of 180 days in any consecutive twelve-month period.

(c) Voluntary Resignation by Executive. Executive shall have the right to terminate his employment without Good Reason (as hereinafter defined) at any time by giving not less than ninety days prior written notice of his resignation to the Company.

(d) Termination for Cause. Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote or not less than a majority of the Board of Directors finding that in the good faith opinion of such members of the Board, Executive was guilty of conduct set forth in any of clauses (A) through (D) of this paragraph 5(d), and specifying the particulars thereof in detail. For purposes of this Agreement, Cause shall mean: (A) Executive’s willful and continued failure to perform substantially his duties with the Company other than any such failure resulting from Executive’s Disability or any such failure resulting from Executive’s termination for Good Reason, after (I) a written demand for substantial performance is delivered to Executive by the Board of Directors which specifically identifies the manner in which the Board believes that Executive has not performed his duties, and (II) the failure of Executive to reasonably comply with such demand within thirty days of notice to Executive, (B) Executive’s willful engagement in conduct materially and demonstrably injurious to the Company that is not cured by Executive within thirty days of notice to Executive, (C) Executive’s willful violation of paragraph 6 or 7 hereof that is not cured by Executive within thirty days of notice to Executive, or (D) Executive’s conviction of any felony from which all appeals have been exhausted. For purposes of this subparagraph, no act or failure to act on Executive’s part shall be considered “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company or any Affiliate.

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(e) Termination Without Cause or for Good Reason.

(i) Any termination by the Company other than due to death, Disability or Cause shall be treated as a termination by the Company without Cause (hereinafter, a termination “Without Cause”). The Company shall notify Executive of a termination Without Cause pursuant to a written notice to Executive, which shall specify the effective date of termination; provided, that, unless otherwise agreed by the parties, such effective date shall not be more than thirty days after the date of such notice. In the event of Executive’s termination Without Cause, the Company shall pay to Executive a severance payment equal to 2.99 times the sum of (I) Executive’s annual Base Salary in effect at the time of termination and (II) the highest annual bonus, if any, paid in cash, in-kind or otherwise by the Company (whether or not pursuant to the Annual Incentive Plan) to Executive during the three-year period immediately preceding the date of termination, (the “Severance Payment”). The Severance Payment shall be payable in cash in a lump sum within fifteen days of the termination of Executive’s employment.

(ii) This Agreement may be terminated by Executive for Good Reason upon written notice to the Company, which shall be effective as of the date such notice is delivered to the Company. In the event Executive terminates his employment for Good Reason, Executive shall receive the same Severance Payment as provided in paragraph 5(e)(i) in connection with a termination Without Cause. For the purpose of this paragraph 5(e), “Good Reason” means any of the following events unless it occurs with Executive’s express written consent, if the Company shall have failed to correct or remedy such event (if subject to correction or remedy) within thirty days following receipt of written notice from Executive describing such event and demanding correction or remedy: (A) the assignment to Executive of any significant duties inconsistent with, or a material diminution of, Executive’s position, duties, titles, offices, responsibilities or status with the Company, or any removal of Executive or any failure to appoint Executive to any of such positions, including as the President and Chief Financial Officer, or failure to nominate Executive to serve as a director and as Vice Chairman of the Board of Directors (provided, that if Executive is then serving as Chairman of the Board, then failure to nominate Executive to continue to serve as Chairman); (B) a reduction in Executive’s Base Salary required to be paid hereunder, or failure by the Company to pay or provide for any vested and earned Annual Bonus, or any vested and earned award under the LTI Plan; (C) any failure by the Company to provide Executive with benefits described in paragraph 3(e); (D) a substantial increase in the level of Executive’s business travel obligations, as required by the Board, compared to Executive’s previous travel obligations during the period of his employment with the Company; (E) a relocation of the Company’s principal executive offices more than 35 miles from the location of such offices as provided in paragraph 19 herein, or requirement by the Company that Executive perform his employment duties hereunder at any location other than the Company’s principal executive offices, (F) any failure by the Company to obtain the assumption of this Agreement by any successor to or assignee of the Company, or (G) a material breach of this Agreement by the Company.

Notwithstanding the foregoing, Executive shall also be entitled to voluntarily terminate his employment with the Company for any reason by giving not less than thirty days’ advance written notice to the Company of his intention to terminate his employment at any time within the one-year period following any termination of, or material amendment to, the LTI Plan by the Company in connection with a Change of Control or otherwise that adversely affects the ability of Executive to realize the full potential value of the 275,000 Performance Units awarded to Executive as described in paragraph 3(c), and any such termination shall be considered a termination for Good Reason for purposes of this Agreement. Notwithstanding the foregoing, the Company may, at its option, elect to pay to Executive the difference between (i) the amount (if any) actually realized by Executive on such Performance Units that vested coincident with or prior to such termination or amendment of the LTI Plan and (ii) the maximum potential value of such Performance Units; and, in such case, the termination or amendment of the Plan will not give Executive the right to terminate his employment for Good Reason as aforesaid. Any such election by the Company must be made within 20 days of the termination or amendment to the LTI Plan.

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6. Non-Competition and Non-Solicitation.

(a) During the Term and for a period of twelve months immediately following the termination of this Agreement for any reason, Executive will not, directly or indirectly, for himself or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business of whatever nature establish, enter into, be employed by or for, advise, consult with or become a part of, any company, partnership, corporation or other business entity or venture, or in any way engage in business for himself or for others, in competition with the Company.

(b) During the Term and for a period of twenty-four months immediately following the termination of this Agreement for any reason, Executive will not, directly or indirectly, for himself or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business of whatever nature, solicit or induce, or attempt to solicit or induce, (i) any person that has any material business relationship with the Company (including, without limitation, any consultants or suppliers) to terminate or modify such relationship or otherwise take any action detrimental in any material respect to such relationship, (ii) any of the Company’s customers to become customers of any business that is competitive with any aspect of the Company’s business; or (iii) any person to leave the employ of the Company.

(c) Because of the difficulty of measuring economic losses to the Company as a result of breach by Executive of the foregoing covenants, and because of the immediate and irreparable damage that might be caused to the Company for which it would have no other adequate remedy, Executive agrees that, without limiting the remedies available to the Company, the foregoing covenants may be enforced by the Company by injunctions and restraining orders.

(d) The parties agree that the covenants in this paragraph 6 impose a reasonable restraint on Executive in light of the activities and business of the Company on the date of this Agreement, and the Company and Executive intend that such covenants shall subsequently be construed and enforced in light of the activities and business of the Company on the date of the termination of the employment of Executive. The covenants in this paragraph 6 are intended to be severable and separate, and the unenforceability of any specific covenant shall not affect the enforceability of any other covenant.

7. Confidentiality.

(a) During the Term and at all times following the termination of this Agreement, Executive will not, except in furtherance of the business of the Company, directly or indirectly (i) disclose to any person or entity, without the Company’s prior consent, any confidential information, whether prepared by him or others, (ii) use any such information other than as directed by the Company in writing, or (iii) remove confidential information from the premises of the Company without the prior written consent of the Company.

(b) Confidential information includes, but is not limited to: (i) the name of any company or business all or any substantial part of which is or at any time was a candidate for potential acquisition by the Company, together with all analyses and other information that the Company has generated, compiled or otherwise obtained with respect to such candidate, business or potential acquisition, or with respect to the potential effect of such acquisition on the Company’s business, assets, financial results or prospects, (ii) business, pricing and management methods, (iii) finances, strategies, systems, research, surveys, plans, reports, recommendations and conclusions, (iv) names, arrangements with, or other information relating to, the Company’s customers, suppliers, equipment manufacturers, financiers, owners or operators, representatives and other persons who have business relationships with the Company or who are prospects for business relationships with the Company, (v) technical information, work products and know-how, and (vi) cost, operating, and other management information systems, and other software and programming.

(c) Notwithstanding any other provision of this Agreement, (i) confidential information shall not include information that has been previously disclosed to the public by the Company or that is in the public domain, other than by reason of Executive’s breach of this paragraph 7, and (ii) disclosure by Executive of confidential information that is required in connection with any judicial or administrative proceeding or

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inquiry shall not be treated as a breach of this paragraph 7, provided Executive has to the extent practicable given the Company at least 10 days’ notice of request therefor (unless otherwise precluded by law) and has cooperated with the Company in its attempts to obtain confidential treatment of any request for confidential information.

8. Company Property. All products, records, designs, patents, plans, manuals, memoranda, lists and other property delivered to Executive by or on behalf of the Company or by its customers, and all records compiled by Executive that pertain to the business of the Company (whether or not confidential) shall be and remain the property of the Company and be subject at all times to its discretion and control. Likewise, all correspondence with customers or representatives, reports, records, charts, advertising materials, and any data collected by Executive, or by or on behalf of the Company or its representatives (whether or not confidential) shall be delivered promptly to the Company upon request by it upon termination of Executive’s employment.

9. Intellectual Property. Executive shall disclose promptly to the Company any and all conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or not, which are conceived or made by Executive solely or jointly with another during the Term, and which are related to the business or activities of the Company or which Executive conceives as a result of his employment by the Company, and Executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Whenever requested to do so by the Company, Executive shall execute any and all applications, assignments or other instruments that the Company shall deem necessary to evidence such assignment to the Company or to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect the Company’s interest in such intellectual property. The obligations set forth in this paragraph 9 shall continue beyond the termination of this Agreement with respect to inventions, improvements, and valuable discoveries, whether patentable or not, conceived or made by Executive during the Term and shall be binding upon Executive and his assigns, executors, administrators and other legal representatives.

10. Cooperation in Proceedings. After the termination of Executive’s employment with the Company, Executive shall continue to make himself reasonably available at reasonable times, so as not to unreasonably interfere with his ongoing business activities, to the Company to advise the Company, at its request, about disputes with third parties as to which Executive has knowledge, and, Executive agrees to cooperate fully with the Company in connection with litigation, arbitrations and similar proceedings and to provide testimony with respect to Executive’s knowledge in any such litigation, arbitrations and similar proceedings involving the Company, in all cases without additional compensation or consideration from the Company. In the event Executive is requested to cooperate with the Company as provided in this paragraph 10, the Company shall reimburse Executive for his reasonable out-of-pocket, travel, lodging expenses and, under circumstances where there is a conflict and Executive cannot be adequately represented by counsel for the Company, legal expenses. Under circumstances where Executive can be adequately represented by counsel for the Company without conflict of interest, the Company shall have an affirmative obligation to cause such counsel to fairly represent Executive’s interests in such litigation, arbitrations or similar proceedings at the Company’s cost, and the determination whether Executive can be adequately represented by counsel without conflict of interest shall be made in good faith by the Company’s counsel according to the cannons of ethics of the New York State Bar Association.

11. Indemnification.

(a) The Company agrees to continue and maintain a directors and officers liability insurance policy covering Executive both during Executive’s employment and after Executive’s termination of his employment with respect to acts or omissions that occurred prior to Executive’s termination of employment, on such terms as are no less favorable to Executive than the terms generally applicable to the Company’s executive officers generally.

(b) The Company and Executive are parties to an Indemnification Agreement dated as of November 13, 1997 (the “Indemnification Agreement”), and the parties hereto agree that the Indemnification

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Agreement shall govern Executive’s rights with respect to indemnification by reason of the fact that Executive is or was an officer, director or employee of the Company or is or was serving as an officer, director, member, employee, trustee or agent of any other entity at the request of the Company.

12. Taxes. The payment of any compensation amounts to Executive hereunder shall be subject to all federal, state and local withholding taxes, social security deductions and any other required payroll deductions.

13. Certain Additional Payments.

(a) If all or any portion of the payments and benefits which Executive is entitled to receive pursuant to the terms of this Agreement or any other plan, arrangement or agreement in respect of the Company or its Affiliates (the “Payments”) constitutes “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), that are subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code (or similar tax and/or assessment under state, local or other laws), the Company (or its successors or assigns) shall promptly pay to Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive, after deduction of (i) any Excise Tax on the Payments, (ii) any federal, state and local income tax and Excise Tax upon the Gross-Up Payment, and (iii) any interest and penalties assessed in respect of the Excise Tax shall be equal to the full amount of the Payments. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rates of taxation in the state and locality of Executive’s residence on the date the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which can be obtained from deduction of such state and local taxes.

(b) All determinations with respect to the Gross-Up Payment for any Payments shall be made in writing by a nationally recognized firm of certified public accountants selected by the Company (the “Accountants”) The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph 13. The Company shall bear all fees and costs the Accountants may reasonably charge or incur in connection with any calculations contemplated by this paragraph 13.

(c) If the Excise Tax is ultimately determined by the Internal Revenue Service (the “IRS”) to be less than the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 13(a), Executive shall repay to the Company, within ten (10) days after the time that the amount of such reduction in Excise Tax is determined by the IRS, the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code for debt instruments with a maturity after issuance equal to the period beginning on the date the Gross-Up Payment was made and ending on the date of repayment required by this sentence. If the Excise Tax is determined to exceed the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 13(a), the Company within ten (10) days after the time that the amount of such excess Excise Tax is determined by the IRS shall make an additional payment to Executive of an amount equal to (i) such excess Excise Tax, (ii) any federal, state and local income tax (determined pursuant to the last sentence of paragraph 13(a)) upon payments made pursuant to this sentence for such excess Excise Tax, and (iii) any interest and penalties payable to the IRS with respect to such excess Excise Tax.

14. No Right of Set-off, Etc. Except as set forth in this Agreement, the obligation of the Company to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including without limitation, set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others.

15. No Obligation to Mitigate. In no event shall Executive be obliged to seek other employment or consulting or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by Executive as a result of self-employment or employment by another employer.

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16. Complete Agreement; Existing Agreement. Except as otherwise expressly provided herein or under the terms of any other pre-existing equity compensation agreement, there are no oral representations, understandings or agreements with the Company or any of its officers, directors or representatives covering the same subject matter as this Agreement (including the Existing Agreement). This written Agreement is the final, complete and exclusive statement and expression of the agreement between the Company and Executive and of all the terms of this Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or written agreements. Except as otherwise expressly provided herein, this written Agreement may not later be modified except by a further writing signed by the Company and Executive, and no terms of this Agreement may be waived except by a writing signed by the party waiving the benefit of such term. Upon execution of this Agreement by the parties hereto, the Existing Agreement shall be deemed null and void (it being acknowledged that no provisions thereof survives notwithstanding it being stated in the Existing Agreement that a particular provision will survive termination).

17. No Waiver. No waiver by the parties hereto of any default or breach of any term, condition or covenant of this Agreement shall be deemed to be a waiver of any other term, condition or covenant contained herein or on any subsequent default or breach of the same term, condition or covenant.

18. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties thereto and their respective heirs, executors, administrators, representatives, successors and assigns.

19. Notice. Whenever any notice is required hereunder, it shall be given in writing addressed as follows:

To the Company: United Rentals, Inc.

Five Greenwich Office Park

Greenwich, Connecticut 06830

Facsimile: (203) 622-6080

Attention: Legal Department

To the Executive: To his home address as shown on the records of the Company,

Attention: John N. Milne

Notice shall be deemed given and effective (a) three (3) business days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail, certified, return receipt requested, (b) when received by the addressee, if sent by a nationally recognized air courier for next day delivery service (receipt requested), or (c) upon personal delivery (with written confirmation of receipt). Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph 19.

20. Severability; Headings. If any portion of this Agreement is held invalid or inoperative, the other portions of this Agreement shall be deemed valid and operative, and so far as it is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The paragraph headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of this Agreement or any part hereof,

21. Governing Law; Forum Selection. This Agreement shall be construed in all respects in accordance with the laws of the State of Delaware, without giving effect to its conflicts of laws principles. Any litigation instituted by any party to this Agreement pertaining to this Agreement must be filed before a court of competent jurisdiction in Connecticut or Delaware and both parties hereby consent irrevocably to the jurisdiction of such courts over them.

22. Legal Fees and Expenses. The Company shall pay the reasonable legal fees, costs and expenses incurred by Executive in connection with any action arising under this Agreement, provided that any dispute or controversy between the parties regarding this Agreement is resolved in any manner in favor of Executive. Upon any initial determination in favor of Executive, the Company shall advance to Executive an amount equal to Executive’s previously incurred legal fees and a reasonable estimate of any legal fees, costs

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and expenses that may be incurred by Executive in connection with the final resolution of such matter. In addition, the Company shall pay or reimburse Executive for attorneys’ fees incurred by Executive in connection with the negotiation and preparation of this Agreement, and it is agreed that the payment or reimbursement of such fees shall be considered a working condition fringe benefit. This paragraph 22 shall not affect Executive’s common-law or statutory indemnification rights, or any agreements or other arrangements between the parties relating to indemnification.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first above written.

UNITED RENTALS, INC.
By:
Title:
	John N. Milne

This Agreement has been approved and authorized by the special compensation committee of the board of directors of United Rentals, Inc. at a meeting held on April 8, 2004.

Michael S. Gross, member of committee

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Exhibit A

2001 SENIOR STOCK PLAN

RESTRICTED STOCK UNIT AGREEMENT

Awardee: John N. Milne (“Awardee”)

Grant Date: April 8, 2004

Restricted Stock Units: 160,000

This RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) is made as of the Grant Date by and between UNITED RENTALS, INC., a Delaware corporation having an office at Five Greenwich Office Park, Greenwich, CT 06830 (the “Company”), and Awardee. Capitalized terms not defined herein shall have the meanings ascribed to them in the Company’s 2001 Senior Stock Plan (the “Plan”).

In consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Restricted Stock Units. The Company hereby grants 160,000 Restricted Stock Units (the “Units”) to Awardee pursuant to the Plan, subject to the terms and conditions of this Agreement and the Plan.

2. Vesting; Forfeiture. The Units shall vest and become nonforfeitable as follows: (A) 20,000 Units shall vest on January 1, 2005, 20,000 Units shall vest on July 1, 2005, and 20,000 Units shall vest on January 1, 2006 (provided in each case that Awardee’s employment with the Company continues through such date), and (B) 100,000 Units shall vest on December 31, 2008 (provided Awardee’s employment with the Company continues through the scheduled end of the term of Awardee’s employment, without giving effect to any renewal periods, as provided in the Employment Agreement between Awardee and the Company dated April 8, 2004 (the “Employment Agreement”)). Notwithstanding the foregoing, (A) in the event of a Change of Control (as defined in the Employment Agreement), any unvested Units shall become immediately vested and nonforfeitable upon the occurrence of such event, (B) in the event of the termination of Awardee’s employment due to death or Disability (as defined in the Employment Agreement) on or prior to January 1, 2006, any unvested Units that were scheduled to vest on or prior to January 1, 2006, shall become immediately vested and nonforfeitable and the remaining unvested Units shall be cancelled and forfeited and (C) in the event of the termination of Awardee’s employment by the Company without Cause (as defined in the Employment Agreement) or Awardee’s termination for Good Reason (as defined in the Employment Agreement), then an “appropriate fraction” (as hereinafter defined) of each separate tranche of any unvested Units shall become immediately vested and nonforfeitable and the remaining unvested Units shall be cancelled and forfeited. For purposes of the foregoing, the “appropriate fraction” with respect to any tranche of Units means: (i) the amount of time that has elapsed from the grant date of such Units to the occurrence of the event triggering accelerated vesting divided by (ii) the total amount of time from the grant date to the scheduled vesting date for such Units absent accelerated vesting. For purposes of the foregoing, the Units scheduled to vest on different dates will be considered separate tranches and the calculation of the appropriate fraction will be made separately for each tranche as if such tranche were the only tranche (i.e., the Units scheduled to vest on January 1, 2005 are one tranche, those scheduled to vest on July 1, 2005 a second tranche, those scheduled to vest on January 1, 2006 a third tranche and those scheduled to vest on December 31, 2008 a fourth tranche). In the event of the termination of Awardee’s employment by the Company for Cause, or Awardee’s voluntary resignation without Good Reason (as defined in the Employment Agreement), any unvested Units shall be cancelled and forfeited.

3. Payment upon Vesting. Vested Units shall be settled in Stock on a one-for-one basis. Within five (5) business days following the each date on which one or more Units vest, the Company shall deliver to Awardee (or Awardee’s beneficiary or estate, if no beneficiary is designated or in the event any chosen beneficiary predeceases Awardee, in the event of the death of Awardee) a certificate, free and clear of any

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restrictive legend, representing a number of shares of Stock equal to the number of Units that vested on such date.

4. Deferral of Delivery of Shares of Stock. Awardee may elect to defer the receipt of shares of Stock upon the vesting of any Unit by filing a deferral election form with the Company at least one year prior to the vesting date of such Unit; provided, however, that Awardee may file a deferral election form relating to any one or more Units within thirty (30) days following the Grant Date. The Company shall establish such other rules and regulations providing for the deferral of the delivery of shares of Stock as may be necessary to ensure that such deferred delivery will not result in taxation to Awardee until shares are actually delivered.

5. Dividends and Dividend Equivalents. No dividends or dividend equivalents shall accrue or be paid with respect to any Units.

6. Transferability. Units are not transferable by the Awardee, whether by sale, assignment, exchange, pledge, or hypothecation, or by operation of law or otherwise.

7. Transferability of Shares of Stock. The Company shall, to the extent it has not already done so, file a Registration Statement on Form S-8 (or otherwise) with the Securities and Exchange Commission relating to the shares of Stock to be delivered hereunder and comply with all applicable state securities laws prior to the distribution of shares of Stock hereunder and to do everything else necessary to ensure that shares of Stock delivered to Awardee upon or following the vesting of any Unit will not be treated as “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act.

8. Conformity with Plan. Except as specifically set forth herein, this Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan, which is incorporated herein by reference. Any inconsistencies between this Agreement and the Plan with respect to any mandatory provisions of the Plan shall be resolved in accordance with the terms of the Plan. By executing and returning the enclosed copy of this Agreement, Awardee acknowledges its receipt of the Plan and its agreement to be bound by all the terms of the Plan. All definitions stated in the Plan apply to this letter.

9. Withholding Taxes. Awardee shall pay to the Company, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of the vesting or distribution of shares of Stock hereunder no later than the date of the event creating the tax liability. The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Awardee, including any shares of Stock to be delivered hereunder. In the event that payment to the Company of such tax obligations is made in shares of Stock, such shares shall be valued at their fair market value on the applicable date for such purposes.

10. Awardee Advised To Obtain Personal Counsel and Tax Representation. IMPORTANT: The Company and its employees do not provide any guidance or advice to individuals who may be granted an Award under the Plan regarding the federal, state or local income tax consequences or employment tax consequences of participating in the Plan. Each person who may be entitled to any benefit under the Plan is responsible for determining their own personal tax consequences of participating in the Plan. Accordingly, you may wish to retain the services of a professional tax advisor in connection with any Awards under the Plan.

11. Gross-up. Under the Employment Agreement, Awardee is entitled to certain gross-up amounts in respect of payments and benefits which constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”). The Company confirms that such gross-up payments also apply to payments and benefits in respect of the Units.

12. Beneficiary Designation. Awardee may designate one or more beneficiaries, from time to time, to whom any benefit under this Agreement is to be paid in case of Awardee’s death. Each designation must be in writing, signed by Awardee and delivered to the Company. Each new designation will revoke all prior designations.

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13. Adjustments for Changes in Capital Structure. In the event of any change in capital structure or business of the Company by reason of any Stock dividend or extraordinary dividend, Stock split or reverse Stock split, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares of Stock, non-cash distributions with respect to its outstanding Stock, reclassification of the Company’s capital stock, any sale or transfer of all or part of the Company’s assets or business, or any similar change affecting the Company’s capital structure or business or the capital structure of any business of any Subsidiary, the Administrator shall make such appropriate adjustments to the Units as are equitable and reasonably necessary or desirable to preserve the intended benefits under this Agreement.

14. Miscellaneous.

(a) This Agreement may not be changed or terminated except by written agreement signed by the Company and Awardee. It shall be binding on the parties and on their personal representatives and permitted assigns.

(b) This Agreement sets forth all agreements of the parties. It supersedes and cancels all prior agreements with respect to the subject matter hereof. It shall be enforceable by decrees of specific performance (without posting bond or other security) as well as by other available remedies.

(c) This Agreement shall be governed by, and construed in accordance with, the laws of Delaware. Any litigation instituted by any party to this Agreement pertaining to this Agreement must be filed before a court of competent jurisdiction in Connection or Delaware and both parties hereby consent irrevocably to the jurisdiction of such courts over them.

(d) The Company shall pay the reasonable legal fees, costs and expenses incurred by Awardee in connection with any action arising under this Agreement, provided that any dispute or controversy between the parties regarding this Agreement is resolved in any manner in favor of Awardee. Upon any initial determination in favor of Awardee, the Company shall advance to Awardee an amount equal to Awardee’s previously incurred legal fees and a reasonable estimate of any legal fees, costs and expenses that may be incurred by Awardee in connection with the final resolution of such matter. In addition, the Company shall pay or reimburse Awardee for attorneys’ fees incurred by Awardee in connection with the negotiation and preparation of this Agreement. This paragraph shall not affect Awardee’s common-law or statutory indemnification rights, or any agreements or other arrangements between the parties relating to indemnification.

(e) All notices, requests, service of process, consents, and other communications under this Agreement shall be in writing. Notice shall be deemed given and effective (a) three (3) business days after the deposit in the U.S. mail of a writing addressed as provided below and sent first class mail, certified, return receipt requested, (b) when received by the addressee, if sent by a nationally recognized air courier for next day delivery service (receipt requested), or (c) upon personal delivery (with written confirmation of receipt). Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph. Notices shall be addressed (i) to Awardee at the last address he or she has filed in writing with the Company and (ii) to the Company at its principal offices attention Legal Department. Either party hereto may designate a different address by providing written notice of such new address to the other party hereto as provided above.

(f) This Agreement may be signed in one or more counterparts, each of which shall be an original, with the same effect as if the signature thereto and hereto were upon the same instrument.

Dated: As of April 8, 2004

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

UNITED RENTALS, INC.
By:
	Name: Title:

AWARDEE:
By:
	Name: Title:

This Agreement has been approved and authorized by the special compensation committee of the board of directors of United Rentals, Inc. at a meeting held on April 8, 2004.

Michael S. Gross, member of committee

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EX-10.H

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT is entered into as of this 8th day of April, 2004, by and between United Rentals, Inc., a Delaware corporation (the “Company”), and Wayland R. Hicks (“Indemnitee”).

RECITALS

A. The Company is aware that because of the increased exposure to litigation costs, talented and experienced persons are increasingly reluctant to serve or continue serving as directors and officers of corporations unless they are protected by comprehensive liability insurance and indemnification.

B. The statutes and judicial decisions regarding the duties of directors and officers are often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors and officers with adequate guidance regarding the proper course of action.

C. The Board of Directors of the Company (the “Board”) has concluded that, in order to retain and attract talented and experienced individuals to serve as officers and directors of the Company and its subsidiaries and to encourage such individuals to take the business risks necessary for the success of the Company and its subsidiaries, the Company should contractually indemnify its officers and directors, and the officers and directors of its subsidiaries, in connection with claims against such officers and directors in connection with their services to the Company and its subsidiaries, and has further concluded that the failure to provide such contractual indemnification could be detrimental to the Company, its subsidiaries and stockholders.

NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as follows:

1. Definitions.

(a) Agent. “Agent” with respect to the Company means any person who is or was a director, officer, employee or other agent of the Company or a Subsidiary of the Company; or is or was serving at the request of, for the convenience of, or to represent the interests of, the Company or a Subsidiary of the Company as a director, officer, employee or agent of another entity or enterprise; or was a director, officer, employee or agent of a predecessor corporation (or other predecessor entity or enterprise) of the Company or a Subsidiary of the Company, or was a director, officer, employee or agent of another enterprise at the request of, for the convenience of, or to represent the interests of such predecessor.

(b) Expenses. “Expenses” means all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees, costs of investigation and related disbursements) incurred by the Indemnitee in connection with the investigation, settlement, defense or appeal of a Proceeding covered hereby or the establishment or enforcement of a right to indemnification under this Agreement.

(c) Proceeding. “Proceeding” means any threatened, pending, or completed claim, suit or action, whether civil, criminal, administrative, investigative or otherwise.

(d) Subsidiary. “Subsidiary” means any corporation or other entity of which more than 10% of the outstanding voting securities or other voting interests is owned directly or indirectly by the Company, and one or more other Subsidiaries, taken as a whole.

2. Maintenance of Liability Insurance.

(a) The Company hereby covenants and agrees with Indemnitee that, subject to Section 2(b), the Company shall obtain and maintain in full force and effect directors’ and officers’ liability insurance (“D&O Insurance”) in reasonable amounts as the Board of Directors shall determine from established and reputable insurers. In no event shall the terms of such D&O Insurance be less favorable to Indemnitee than the terms generally applicable to the Company’s executive officers generally.

(b) Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that the premium costs for such insurance are (i)

disproportionate to the amount of coverage provided after giving effect to exclusions, and (ii) substantially more burdensome to the Company than the premiums charged to the Company for D&O Insurance currently in effect.

3. Mandatory Indemnification. The Company shall defend, indemnify and hold harmless Indemnitee:

(a) Third Party Actions. If Indemnitee is a person who was or is a party, or is threatened to be made a party, to any Proceeding (other than an action by or in the right of the Company) by reason of the fact that Indemnitee is or was or is claimed to be an Agent of the Company, or by reason of anything done or not done by Indemnitee in any such capacity, or by reason of the fact that Indemnitee personally guaranteed any obligation of the Company at any time, against any and all Expenses and liabilities or any type whatsoever (including, but not limited to, legal fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) incurred by such person in connection with the investigation, defense, settlement or appeal of such Proceeding, so long as the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or Proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

(b) Derivative Actions. If Indemnitee is a person who was or is a party, or is threatened to be made a party, to any Proceeding by or in the right of the Company by reason of the fact that he is or was an Agent of the Company, or by reason of anything done or not done by him in any such capacity, against any and all Expenses and liabilities of any type whatsoever (including, but not limited to, legal fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) incurred by him in connection with the investigation, defense, settlement or appeal of such Proceeding, so long as the Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification under this subsection shall be made, and Indemnitee shall repay all amounts previously advanced by the Company, in respect of any claim, issue or matter for which such person is judged in a final, non-appealable decision to be liable to the Company by a court of competent jurisdiction due to willful misconduct in the performance of his duties to the Company, unless and only to the extent that the court in which such Proceeding was brought or the Court of Chancery of Delaware shall determine that Indemnitee is fairly and reasonably entitled to indemnity.

(c) Actions Where Indemnitee Is Deceased. If Indemnitee is a person who was or is a party, or is threatened to be made a party, to any Proceeding by reason of the fact that he is or was an Agent of the Company, or by reason of anything done or not done by him in any such capacity, and prior to, during the pendency of, or after completion of, such Proceeding, the Indemnitee shall die, then the Company shall defend, indemnify and hold harmless the estate, heirs and legatees of the Indemnitee against any and all Expenses and liabilities incurred by or for such persons or entities in connection with the investigation, defense, settlement or appeal of such Proceeding on the same basis as provided for the Indemnitee in Sections 3(a) and 3(b) above.

The Expenses and liabilities covered hereby shall be net of any payments by D&O Insurance carriers or others.

4. Partial Indemnification. If Indemnitee is found under Section 3, 6 or 9 hereof not to be entitled to indemnification for all of the Expenses relating to a Proceeding, the Company shall indemnify the Indemnitee for any portion of such Expenses not specifically precluded by the operation of such Section 3, 6 or 9.

5. Indemnification Procedures; Mandatory Advancement of Expenses.

(a) Promptly after receipt by Indemnitee of notice to him or her of the commencement or threat of any Proceeding covered hereby, Indemnitee shall notify the Company of the commencement or threat thereof, provided that any failure to so notify shall not relieve the Company of any of its obligations hereunder.

(b) If, at the time of the receipt of a notice pursuant to Section 5(a) above, the Company has D&O Insurance in effect, the Company shall give prompt notice of the Proceeding or claim to its insurers in accordance with the procedures set forth in the applicable policies. The Company shall thereafter take all

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necessary or desirable action to cause such insurers to pay all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) Indemnitee shall be entitled to retain one or more counsel from time to time selected by it in its sole discretion to act as its counsel in and for the investigation, defense, settlement or appeal of each Proceeding. The Company shall not waive any privilege or right available to Indemnitee in any such Proceeding.

(d) The Company shall bear all fees and Expenses (including invoices for advance retainers) of such counsel, and all fees and Expenses invoiced by other persons or entities, in connection with the investigation, defense, settlement or appeal of each such Proceeding. Such fees and Expenses are referred to herein as “Covered Expenses.”

(e) Until a determination to the contrary under Section 6 hereof is made, the Company shall advance all Covered Expenses in connection with each Proceeding. If required by law, as a condition to such advances, Indemnitee shall, at the request of the Company, agree to repay such amounts advanced if it shall ultimately be determined by a final order of a court that Indemnitee is not entitled to be indemnified by the Company by the terms hereof or under applicable law.

(f) Each advance to be made hereunder shall be paid by the Company to Indemnitee within 10 days following delivery of a written request therefor by Indemnitee to the Company.

(g) The Company acknowledges the potentially severe damage to Indemnitee should the Company fail timely to make such advances to Indemnitee.

6. Determination of Right to Indemnification.

(a) To the extent Indemnitee has been successful on the merits or otherwise in defense of any Proceeding, claim, issue or matter covered hereby, Indemnitee need not repay any of the Expenses advanced in connection with the investigation, defense or appeal of such Proceeding.

(b) If Section 6(a) is inapplicable, the Company shall remain obligated to indemnify Indemnitee, and Indemnitee need not repay Expenses previously advanced, unless the Company, by motion before a court of competent jurisdiction, obtains an order for preliminary or permanent relief suspending or denying the obligation to advance or indemnify for Expenses.

(c) Notwithstanding a determination by a court that Indemnitee is not entitled to indemnification with respect to a specific Proceeding, Indemnitee shall have the right to apply to the Court of Chancery of Delaware for the purpose of enforcing Indemnitee’s right to indemnification pursuant to this Agreement.

(d) Notwithstanding any other provision in this Agreement to the contrary, the Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee in connection with any Proceeding under Section 6(b) or 6(c) and against all Expenses incurred by Indemnitee in connection with any other Proceeding between the Company and Indemnitee involving the interpretation or enforcement of the rights of Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of the material claims and/or defenses of Indemnitee in any such Proceeding were frivolous or made in bad faith.

7. Certificate of Incorporation and By-Laws. The Company agrees that the Company’s Certificate of Incorporation and By-laws in effect on the date hereof shall not be amended to reduce, limit, hinder or delay (i) the rights of Indemnitee granted hereby, or (ii) the ability of the Company to indemnify Indemnitee as required hereby. The Company further agrees that it shall exercise the powers granted to it under its Certificate of Incorporation, its By-laws and by applicable law to indemnify Indemnitee to the fullest extent possible as required hereby.

8. Witness Expenses. The Company agrees to compensate Indemnitee for the reasonable value of his or her time spent, and to reimburse Indemnitee for all Expenses (including attorneys’ fees and travel costs) incurred by him or her, in connection with being a witness, or if Indemnitee is threatened to be made a witness, with respect to any Proceeding, by reason of his or her serving or having served as an Agent of the Company.

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9. Exceptions. Notwithstanding any other provision hereunder to the contrary, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense (other than Proceedings under Section 6(b) or Section 6(c) or brought to establish or enforce a right to indemnification under this Agreement or the provisions of the Company’s Certificate of Incorporation or By-laws unless a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such Proceeding were not made in good faith or were frivolous).

(b) Unauthorized Settlements. To indemnify Indemnitee under this Agreement for any amounts paid in settlement of a Proceeding covered hereby without the prior written consent of the Company to such settlement.

10. Non-exclusivity. This Agreement is not the exclusive arrangement between the Company and Indemnitee regarding the subject matter hereof and shall not diminish or affect any other rights which Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or By-laws, under other agreements, or otherwise.

11. Continuation After Term. Indemnitee’s rights hereunder shall continue after the Indemnitee has ceased acting as a director or Agent of the Company and the benefits hereof shall inure to the benefit of the heirs, executors and administrators of Indemnitee.

12. Interpretation of Agreement. This Agreement shall be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

13. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, provisions of the Agreement shall not in any way be affected or impaired thereby, and to the fullest extent possible, the provisions of this Agreement shall be construed or altered by the court so as to remain enforceable and to provide Indemnitee with as many of the benefits contemplated hereby as are permitted under law.

14. Counterparts, Modification and Waiver. This Agreement may be signed in counterparts. This Agreement constitutes a separate agreement between the Company and Indemnitee and may be supplemented or amended as to Indemnitee only by a written instrument signed by the Company and Indemnitee, with such amendment binding only the Company and Indemnitee. All waivers must be in a written document signed by the party to be charged. No waiver of any of the provisions of this Agreement shall be implied by the conduct of the parties. A waiver of any right hereunder shall not constitute a waiver of any other right hereunder.

15. Notices. All notices, demands, consents, requests, approvals and other communications required or permitted hereunder shall be in writing and shall be deemed to have been properly given if hand delivered (effective upon receipt or when refused), or if sent by a courier freight prepaid (effective upon receipt or when refused), in the case of the Company, at the addresses listed below, or to such other addresses as the parties may notify each other in writing.

To Company:  United Rentals, Inc.

Five Greenwich Office Park

Greenwich, CT 06830

Attention: Legal Department

To Indemnitee: At the Indemnitee’s residence address and facsimile number on the records of the Company from time to time.

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16. Evidence of Coverage. Upon request by Indemnitee, the Company shall provide evidence of the liability insurance coverage required by this Agreement. The Company shall promptly notify Indemnitee of any change in the Company’s D&O Insurance coverage.

17. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have entered into this Indemnification Agreement effective as of the date first above written.

UNITED RENTALS, INC.
By:
	Name: Title:
INDEMNITEE:
	Name: Wayland R. Hicks

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EX-10.K

Amendment to United Rentals, Inc. 2001 Senior Stock Plan

Section 4.1 of the plan is amended to read as follows:

4.1 Eligibility. Officers, directors and key employees of the Corporation who are not officers shall be eligible to participate in the Plan; provided, however, that the number of non-officer key employees that may participate in the Plan shall not exceed 33. The Administrator shall determine which employees are “key employees” for purposes the Plan.

This amendment is effective as of February 26, 2004.

EX-31.A

EXHIBIT 31(a)

CERTIFICATIONS

I, Wayland R. Hicks, certify that:

1. I have reviewed this report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrants and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants’ ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

May 10, 2004

/S/    WAYLAND R. HICKS

Wayland R. Hicks

Chief Executive Officer

EX-31.B

EXHIBIT 31(b)

CERTIFICATIONS

I, John N. Milne, certify that:

1. I have reviewed this report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) for the registrants and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants’ ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

May 10, 2004

/S/    JOHN N. MILNE

John N. Milne

President and Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of United Rentals, Inc. and United Rentals (North America), Inc. (the “Companies”) on Form 10-Q for the period ended March 31, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, Wayland R. Hicks, Chief Executive Officer of the Companies, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies.

/S/    WAYLAND R. HICKS

Wayland R. Hicks

Chief Executive Officer

May 10, 2004

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Companies and will be retained by the Companies and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

EXHIBIT 32(b)

CERTIFICATION PURSUANT TO

187 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of United Rentals, Inc. and United Rentals (North America), Inc. (the “Companies”) on Form 10-Q for the period ended March 31, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, John N. Milne, President and Chief Financial Officer of the Companies, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies.

/S/    JOHN N. MILNE

John N. Milne

President and Chief Financial Officer

May 10, 2004

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Companies and will be retained by the Companies and furnished to the Securities and Exchange Commission or its staff upon request.