SEC Info - RSC Holdings Inc - S-1/A

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		Alternative Formats (RTF, XML, et al.) Business Capitalization Cautionary Note Regarding Forward-Looking Statements Certain Relationships and Related Party Transactions Certain U.S. Federal Income Tax Considerations Condensed Consolidated Balance Sheet at March 31, 2007 and December 31, 2006 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006 Condensed Consolidated Statements of Income for the three months ended March 31, 2007 and 2006 Consolidated Balance Sheets at December 31, 2006 and 2005 Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004 Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004 Description of Capital Stock Description of Certain Indebtedness Dilution Dividend Policy Experts Index to Financial Statements Industry Overview Legal Matters Management Management s Discussion and Analysis of Financial Condition and Results of Operations Market and Industry Data Notes to Condensed Consolidated Financial Statements Notes to Consolidated Financial Statements Recent Transactions Report of Independent Registered Public Accounting Firm Risk Factors Security Ownership of Certain Beneficial Owners, Management and Selling Stockholders Selected Historical Consolidated Financial Data Shares Eligible for Future Sale Summary Supplemental Information Table of Contents Unaudited Pro Forma Condensed Consolidated Financial Statements Underwriting Use of Proceeds Where You Can Find Additional Information
1	1st Page
"	Summary
"	Risk Factors
"	Supplemental Information
"	Cautionary Note Regarding Forward-Looking Statements
"	Market and Industry Data
"	Recent Transactions
"	Use of Proceeds
"	Dividend Policy
"	Capitalization
"	Dilution
"	Unaudited Pro Forma Condensed Consolidated Financial Statements
"	Selected Historical Consolidated Financial Data
"	Management s Discussion and Analysis of Financial Condition and Results of Operations
"	Industry Overview
"	Business
"	Management
"	Security Ownership of Certain Beneficial Owners, Management and Selling Stockholders
"	Certain Relationships and Related Party Transactions
"	Description of Certain Indebtedness
"	Description of Capital Stock
"	Shares Eligible for Future Sale
"	Certain U.S. Federal Income Tax Considerations
"	Underwriting
"	Legal Matters
"	Experts
"	Where You Can Find Additional Information
"	Index to Financial Statements
"	Condensed Consolidated Balance Sheet at March 31, 2007 and December 31, 2006
"	Condensed Consolidated Statements of Income for the three months ended March 31, 2007 and 2006
"	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006
"	Notes to Condensed Consolidated Financial Statements
"	Report of Independent Registered Public Accounting Firm
"	Consolidated Balance Sheets at December 31, 2006 and 2005
"	Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004
"	Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004
"	Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
"	Notes to Consolidated Financial Statements
"	Table of Contents

SUMMARY

This summary highlights information appearing elsewhere in this prospectus. You should carefully read the entire prospectus, including the section entitled “Risk Factors,” beginning on page 14 and our financial statements and notes to those financial statements included elsewhere in this prospectus before making any investment decision.

Our Company

We are one of the largest equipment rental providers in North America. As of March 31, 2007, we operate through a network of 459 rental locations across 10 regions in 39 U.S. states and four Canadian provinces. We believe we are the largest or second largest equipment rental provider in the majority of the regions in which we operate. During the eighteen months ended March 31, 2007, we serviced approximately 470,000 customers primarily in the non-residential construction and industrial markets. For the year ended December 31, 2006 and the three months ended March 31, 2007, we generated approximately 83% and 86%, respectively, of our revenues from equipment rentals, and we derived the remaining 17% and 14%, respectively, of our revenues from sales of used equipment and other related items. We believe our focus on high margin rental revenues, active fleet management and superior customer service has enabled us to achieve significant market share gains exclusively through organic growth while sustaining attractive returns on capital employed. Through March 31, 2007, we experienced 15 consecutive quarters of positive same store, year-over-year rental revenue growth, with same store rental revenue growth of approximately 12%, 18%, 19% and 13% and operating income growth of approximately 76%, 44%, 31% and 12% in 2004, 2005, 2006 and the three months ended March 31, 2007, respectively.

We rent a broad selection of equipment, mainly to industrial and non-residential construction companies, ranging from large equipment such as backhoes, forklifts, air compressors, scissor lifts, booms and skid-steer loaders to smaller items such as pumps, generators, welders and electric hand tools. As of March 31, 2007, our rental fleet had an original equipment cost of $2.4 billion covering over 1,400 categories of equipment. We strive to differentiate our offerings through superior levels of equipment availability, reliability and service. The strength of our fleet lies in its age, condition and diversity. We believe our fleet is the youngest and best maintained in the industry among our key competitors, with an average fleet age of 25 months as of March 31, 2007. Our young fleet age provides us with significant operational flexibility, and we actively manage the condition of our fleet in order to provide customers with well maintained and reliable equipment and to support our premium pricing strategy. Our disciplined fleet management strategy enables us to maintain pricing discipline and optimize fleet utilization and capital expenditures. As a result, we have a high degree of equipment sharing and mobility within regions. This enables us to increase equipment utilization and react quickly by adjusting the fleet size in response to changes in customer demand. In addition to our equipment rental operations, we sell used equipment, parts, merchandise and supplies for maintenance, repair and operations.

Industry Overview

According to industry sources, the equipment rental market in the United States was a $34.8 billion industry in 2006 and experienced an 11% compound annual growth rate between 1990 and 2006. This market is expected to grow to $37.6 billion by the end of 2007. The equipment rental industry encompasses a wide range of equipment from small tools to heavy earthmoving equipment, and growth is largely driven by two key factors. First, there is an increasing trend towards renting versus purchasing equipment. The penetration rate for equipment rental in the United States has expanded in line with the increasing recognition of the benefits that equipment rental offers compared to equipment ownership. Industry sources

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estimate there has been an overall growth in rental industry penetration from 5% of total equipment deployed in 1993 to 35% in 2005. Second, the industry has experienced growth in its primary end-markets, which comprise the non-residential construction and industrial markets.

The equipment rental industry remains highly fragmented, with large numbers of companies operating on a regional or local scale. The top 10 companies combined accounted for less than 30% of the market by 2005 rental revenues. We expect the larger rental companies to increase their market share by continuing to offer for rent a wide range of high quality and reliable equipment. The outlook for the equipment rental industry is expected to remain strong, due to positive macroeconomic factors such as:


	•	the continuing trend toward rental instead of ownership;

	•	continued growth in non-residential building construction spending, which is expected to grow 9.5% in 2007; and

	•	increased capital investment by industrial companies.

Competitive Strengths

We believe that the following strengths provide us with significant competitive advantages and the opportunity to achieve continued growth and profitability:

Leading North American equipment rental provider with national footprint and significant scale. Our scale and strong national footprint enable us to effectively service our customers in multiple geographic locations as well as our customers with exclusively local needs. In addition, the depth and breadth of our offerings enable us to service the majority of the equipment rental needs of our customers across multiple market segments. We believe that our broad geographical footprint reduces the impact of regional economic downturns and seasonal fluctuations in demand, and enables us to take advantage of growth opportunities, including those arising from the fragmented nature of the U.S. equipment rental industry. In addition, we believe our size and market presence allow us to achieve economies of scale in capital investment.

High quality rental fleet. We believe our diverse equipment fleet is the youngest, best maintained and most reliable in the industry among our key competitors. At March 31, 2007, our rental fleet had an original equipment cost of approximately $2.4 billion and an average fleet age of 25 months, compared to $1.7 billion and 44 months, respectively, at the end of 2003. We also employ a rigorous preventive maintenance and repair program to maximize the reliability, utilization and useful life of our fleet. We believe that our fleet’s young age and condition support our premium pricing strategy and will enable us to broaden our customer base and, additionally, withstand cyclical downturns in our industry better than our competitors due to our ability to reduce capital expenditures on new equipment without any compromise in quality.

Highly disciplined fleet management and procurement process. Our highly disciplined approach to acquiring, deploying, sharing, maintaining and divesting fleet is the main reason that we believe we lead the industry in profitability and return on invested capital. As of March 31, 2007, we invested approximately $2.2 billion in new fleet since the beginning of 2003 to meet customer demand and to optimize the diversity and condition of our fleet. Our fleet utilization increased from 61% for the year ended December 31, 2002 to 72% for the year ended December 31, 2006 and was 70% for the three months ended March 31, 2007. Our centralized fleet management strategy facilitates the fluid transfer of our fleet among regions to adjust to local customer demand. We base our equipment investment decisions on locally forecasted quarterly rental revenues, target utilization levels and targeted rental rates. We also seek to

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maintain a disciplined and consolidated approach to supplier vendor negotiations by avoiding long-term supply contracts and placing equipment orders on a monthly basis.

Superior customer service. Senior management is committed to maintaining a customer focused culture. We spend significant time and resources to train our personnel to effectively service our customers. We utilize innovative service offerings and an in-house 24/7 call center, and regularly solicit feedback from our customers through focus groups and telephone surveys. We believe that these customer initiatives help support our premium pricing strategy, and we estimate that a substantial portion of our total revenues for the year ended December 31, 2006 and the three months ended March 31, 2007 was derived from existing customers.

Diverse and stable customer base. We serviced approximately 470,000 customers during the eighteen months ended March 31, 2007, primarily in the non-residential construction and industrial markets, and customers from these markets accounted for 94% of our total revenues for both the year ended December 31, 2006 and the three months ended March 31, 2007. Our customers represent a wide variety of industries, such as non-residential construction, petrochemical, paper/pulp and food processing. We have long and stable relationships with most of our customers, including relationships in excess of 10 years with the majority of our top 20 customers. During both the year ended December 31, 2006 and the three months ended March 31, 2007, no one customer accounted for more than 1.4% of our total revenues. Additionally, our top 10 customers combined represented approximately 6.8% and 8.1% of our total revenues for the year ended December 31, 2006 and the three months ended March 31, 2007, respectively.

Decentralized organizational structure drives local business. We believe our ability to respond quickly to our customers’ demands is a key to profitable growth. Our highly decentralized organizational structure facilitates our ability to effectively service our customers in each of our local markets. We are organized in three geographic divisions across the United States and parts of Canada and operate in 10 regions across those divisions. Compensation for our field managers is based on local results, meeting targeted operating margins and rental revenue growth. Accountability is maintained on a daily basis through our information systems, which provide real time data on key operational and financial metrics, and monthly reviews of financial performance. Since 2001, we have focused exclusively on organic growth, resulting in same store rental revenue growth of approximately 12% in 2004, 18% in 2005, 19% in 2006 and 13% in the three months ended March 31, 2007.

Experienced and proven management team. Our senior and regional management team has significant experience operating businesses in capital intensive industries and a successful track record of delivering strong financial results and significant operational efficiencies. Since 2001, our management team has transformed our operational and financial performance by focusing on capital efficiency and returns, investments in human and capital resources, brand development and the redesign and implementation of significantly improved internal processes. Our current management team led the effort to decentralize the business, allowing regional leadership to take responsibility for regional profit and loss, thereby improving customer service and results. Under our management team’s leadership, our operating income margins increased from 10.4% in 2003 to 25.4% in 2006 and were 24.0% in the three months ended March 31, 2007.

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Business Strategy

Increase market share and pursue profitable growth. Through our high quality fleet, large scale and national footprint and superior customer service position, we intend to take advantage of the opportunities for profitable growth within the North American equipment rental market by:


	•	continuing to drive the profitability of existing stores and pursuing same store growth;

	•	continuing to invest in and maintain our high quality fleet to meet local customer demands;

	•	leveraging our reputation for superior customer service to increase our customer base;

	•	increasing our market penetration by opening new stores in targeted growth markets to leverage existing infrastructure and customer relationships;

	•	increasing our presence in complementary rental and service offerings to increase same store revenues, margins and return on investment;

	•	continuing to align incentives for local management teams with both profit and growth targets; and

	•	pursuing selected acquisitions in attractive markets, subject to economic conditions.

Further drive profitability, cash flow and return on capital. We believe there are opportunities to further increase the profitability of our operations by continuing to:


	•	focus on the higher margin rental business;

	•	actively manage the quality, reliability and availability of our fleet and offer superior customer service, which supports our premium pricing strategy;

	•	evaluate each new investment in fleet based on strict return guidelines;

	•	deploy and allocate fleet among our operating regions based on pre-specified return thresholds to optimize utilization; and

	•	use our size and market presence to achieve economies of scale in capital investment.

Further enhance our industry leading customer service. We believe that our position as a leading provider of rental equipment to our customers is driven in large part by our superior customer service and our reputation for such service. We intend to continue to provide superior customer service and maintain our reputation for such service. We believe this will allow us to further expand our customer base and increase our share of the fragmented U.S. equipment rental market.

Risk Factors

Our business is subject to numerous risks and uncertainties such as:


	•	the effect of an economic downturn or other factors resulting in a decline in non-residential construction and capital investment;

	•	increased competition from other companies in our industry and our inability to increase or maintain our prices;

	•	our ability to obtain equipment at competitive prices;

	•	changes in the attitude of our customers toward renting, as compared with purchasing, equipment;

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	•	our ability to generate cash and/or incur additional indebtedness to finance equipment purchases; and

	•	heavy reliance on centralized information systems.

You should carefully consider these factors as well as all of the information set forth in this prospectus and, in particular, the information under the heading “Risk Factors,” prior to purchasing any shares of common stock offered hereby.

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The Principal and Selling Stockholders

RSC Acquisition LLC and RSC Acquisition II LLC, or Ripplewood, and OHCP II RSC, LLC, OHCMP II RSC, LLC and OHCP II RSC COI, LLC, or Oak Hill and, together with Ripplewood, the Sponsors, currently own approximately 85% of our outstanding common stock. Atlas Copco Finance S.à.r.l., or ACF, currently owns approximately 14% of our outstanding common stock. Following the completion of this offering and assuming that the underwriters do not exercise their option to purchase additional shares, the Sponsors and ACF will continue to own approximately 67% and 11%, respectively, of our outstanding common stock.

Of the ten members currently serving on our Board of Directors, eight are principals of the Sponsors, four from each of Ripplewood and Oak Hill. Under the terms of an amended and restated stockholders agreement to be entered into among RSC Holdings, the Sponsors and ACF in connection with this offering, or the “Amended and Restated Stockholders Agreement,” the Sponsors will each have certain rights regarding the nomination of candidates for election to our Board of Directors. Upon completion of this offering, the Sponsors will continue to have the right to nominate a majority of the members of our Board of Directors. In addition, this agreement will continue to provide rights and restrictions with respect to certain transactions in our securities entered into by the Sponsors or certain other stockholders.

Ripplewood Holdings L.L.C.

Founded in 1995, Ripplewood Holdings L.L.C. manages over $4 billion and makes industry-focused leveraged investments through several institutional private equity funds. To date, the firm has invested in transactions valued at over $15 billion in the U.S., Asia and Europe. Significant investments, other than in connection with the Sponsors’ investment in RSC Holdings, include ICM Equipment Company, Asbury Automotive Group, Kraton Polymers, Japan Telecom, Shinsei Bank, Commercial International Bank, Time-Life, Saft Power Systems, Supresta and The Reader’s Digest Association Inc. RSC Acquisition, LLC and RSC Acquisition II, LLC are special purpose entities formed by Ripplewood Holdings L.L.C. (which includes Ripplewood Partners II, LP, Ripplewood Partners II Parallel Fund, LP, and Ripplewood Partners II Offshore Parallel Fund, LP) for the purposes of Ripplewood Holdings L.L.C.’s investment in RSC Holdings.

Oak Hill Capital Partners

Oak Hill Capital Partners is a private equity firm with more than $4.6 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Founded by Robert M. Bass over 20 years ago, Oak Hill Capital Partners has invested in more than 50 significant private equity transactions. Investments, other than in connection with the Sponsors’ investment in RSC Holdings, include Williams Scotsman, TravelCenters of America, EXL Services, Duane Reade, Primus International, Progressive Molded Products, and Genpact. Oak Hill Capital Partners is one of several Oak Hill partnerships, each of which has a dedicated and independent management team. These partnerships comprise over $20 billion of investment capital across multiple asset classes, including private equity, special situations, high yield and bank debt, venture capital, real estate, a public equity exchange fund and a global fixed income and equity hedge fund (the “Oak Hill Partnerships”). OHCP II RSC, LLC, OHCMP II RSC, LLC and OHCP II RSC COI, LLC are special purpose entities formed by Oak Hill Capital Partners II, L.P. (one of the Oak Hill Capital Partnerships) and related entities for the purposes of Oak Hill Capital Partners’ investment in RSC Holdings.

* * * *

RSC Holdings is incorporated under the laws of the state of Delaware. Our corporate headquarters are located at 6929 E. Greenway Parkway, Scottsdale, Arizona 85254. Our telephone number is (480) 905-3300.

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The Offering


Common stock offered		20,833,333 shares of common stock, no par value, of RSC Holdings, or our common stock.

Shares of common stock offered by RSC Holdings		12,500,000

Shares of common stock offered by the selling stockholders		8,333,333

Shares of common stock outstanding after the offering		103,147,591


Option to purchase additional shares of common stock		The underwriters have a 30-day option to purchase up to an additional 3,125,000 shares of the selling stockholders’ common stock.

Use of proceeds		Our net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $278.8 million, assuming an offering price equivalent to the midpoint of the range set forth on the cover page of this prospectus. We intend to use the net proceeds to us from this offering to repay a portion of the Senior Term Facility and an associated prepayment penalty of $5.1 million and a termination fee of $20 million related to terminating the Monitoring Agreement, with the remainder of the proceeds, if any, to be used for general corporate purposes. We will not receive any proceeds from the sale of shares by the selling stockholders.

Dividend policy		We do not expect to pay dividends on our common stock for the foreseeable future.

Proposed New York Stock Exchange symbol		“RRR”.

103,147,591 shares of our common stock will be outstanding after this offering.

Risk Factors

You should consider carefully all of the information set forth in this prospectus and, in particular, the information under the heading “Risk Factors” beginning on page 14 for risks involved in investing in our common stock.

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Summary Historical And Unaudited Pro Forma Financial Data

The following table presents summary historical and unaudited pro forma consolidated financial information. The summary consolidated statement of income data for each of the years in the three year period ended December 31, 2006 were derived from our audited consolidated financial statements and the related notes thereto included in this prospectus. The summary consolidated balance sheet data as of December 31, 2005 and 2006 were derived from our audited consolidated financial statements and the related notes thereto included in this prospectus. The summary consolidated balance sheet data as of December 31, 2004 were derived from our audited consolidated financial statements and the related notes thereto not included in this prospectus. The summary condensed consolidated statements of income data for the three months ended March 31, 2006 and 2007 and the summary condensed consolidated balance sheet data as of March 31, 2006 and 2007 presented below were derived from our unaudited condensed consolidated financial statements and the related notes thereto included in this prospectus. The unaudited interim results for the three months ended March 31, 2006 and 2007 include all adjustments (consisting only of normal recurring adjustments) that we consider necessary for a fair presentation of the financial results for the interim periods presented. The unaudited interim results for the three months ended March 31, 2007 are not necessarily an indication of the results for the year ending December 31, 2007. The unaudited pro forma as adjusted consolidated statement of income data for the year ended December 31, 2006 reflect adjustments to our historical financial data to give effect to (i) the transaction contemplated by the recapitalization agreement, dated as of October 6, 2006 (the “Recapitalization Agreement”), by and among Atlas Copco AB (“ACAB”), ACF, the Sponsors and RSC Holdings (such transaction is referred to herein as the Recapitalization and is more fully described under “Recent Transactions—The Recapitalization”) and the use of the net proceeds therefrom and (ii) the sale of the common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of net proceeds therefrom as if such transactions had occurred on January 1, 2006. The unaudited pro forma as adjusted consolidated balance sheet data as of December 31, 2006 reflect adjustments to our historical financial data to give effect to the sale of the common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom as if such transaction had occurred on December 31, 2006. The unaudited pro forma as adjusted condensed consolidated statement of income data for the three months ended March 31, 2007 reflect adjustments to our historical financial data to give effect to the sale of the common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom as if such transaction had occurred on January 1, 2007. The unaudited pro forma as adjusted condensed consolidated balance sheet data as of March 31, 2007 reflect adjustments to our historical financial data to give effect to the sale of the common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom as if such transaction had occurred on March 31, 2007.

We calculate earnings per share on a pro forma basis, based on an assumed number of shares outstanding at the time of the initial public offering with respect to the existing shares.

You should read the following summary historical and pro forma financial data in conjunction with the historical financial statements and other financial information appearing elsewhere in this prospectus, including “Capitalization,” “Unaudited Pro Forma Condensed Consolidated Financial Statements,” “Selected Historical Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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													Pro Forma for the
													Recapitalization
										Pro Forma for the			and as adjusted
										Recapitalization			for the Offering
	Historical									for the Year Ended			for the Year Ended
	Year Ended December 31,									December 31,			December 31,
	2004			2005			2006			2006			2006
	(in thousands, except per share data)

Consolidated statement of income data:
Revenues:
Equipment rental revenue	$	984,517		$	1,140,329		$	1,368,712		$	1,368,712		$	1,368,712
Sale of merchandise		162,720			102,894			92,524			92,524			92,524
Sale of used rental equipment		181,486			217,534			191,652			191,652			191,652

Total revenues		1,328,723			1,460,757			1,652,888			1,652,888			1,652,888

Cost of revenues:
Cost of equipment rentals, excluding depreciation		492,323			527,208			591,340			591,340			591,340
Depreciation—rental equipment		192,323			212,325			253,379			253,379			253,379
Cost of sales of merchandise		122,873			69,914			57,636			57,636			57,636
Cost of rental equipment sales		147,131			173,276			145,425			145,425			145,425

Total cost of revenues		954,650			982,723			1,047,780			1,047,780			1,047,780

Gross profit		374,073			478,034			605,108			605,108			605,108

Operating expenses:
Selling, general, and administrative		118,130			122,281			135,526			140,967			134,967
Depreciation and amortization—non-rental		32,641			33,776			38,783			38,783			38,783
Recapitalization expenses(1)		—			—			10,277			—			—

Total operating expenses		150,771			156,057			184,586			179,750			173,750

Operating income		223,302			321,977			420,522			425,358			431,358
Interest expense, net		45,666			64,280			116,370			254,277			231,383
Other income, net		(58	)		(100	)		(311	)		(311	)		(311	)

Income before provisions for income taxes		177,694			257,797			304,463			171,392			200,286
Provision for income taxes		66,717			93,600			117,941			66,393			77,586

Net income	$	110,977		$	164,197		$	186,522		$	104,999		$	122,700

Preferred dividends		(15,995	)		(15,995	)		(7,997	)		—			—

Net income available for common stockholders	$	94,982		$	148,202		$	178,525		$	104,999		$	122,700

Weighted average shares outstanding used in computing net income per common share:
Basic and diluted (2)(3)		330,697			330,697			307,845			89,733			100,305	(4)

Net income per common share:
Basic and diluted (2)(3)	$	0.29		$	0.45		$	0.58		$	1.17		$	1.22	(4)

Other financial data:
EBITDA (5)	$	448,324		$	568,178		$	712,995		$	717,831		$	723,831
Adjusted EBITDA (5)		449,575			571,155			725,581			725,581			725,581
Adjusted EBITDA margin		33.8	%		39.1	%		43.9	%		43.9	%		43.9	%
Depreciation of rental equipment and depreciation and amortization of non-rental equipment		224,964			246,101			292,162			292,162			292,162
Capital expenditures:
Rental	$	419,900		$	691,858		$	721,258		$	721,258		$	721,258
Non-rental		33,490			4,641			28,592			28,592			28,592
Proceeds from sales of used equipment and non-rental equipment		(215,622	)		(233,731	)		(207,613	)		(207,613	)		(207,613	)

Net capital expenditures	$	237,768		$	462,768		$	542,237		$	542,237		$	542,237

Other operational data (unaudited):
Utilization (6)		67.7	%		70.6	%		72.0	%		72.0	%		72.0	%
Average fleet age (months)		40.0			30.2			25.0			25.0			25.0
Same store rental revenues growth (7)		11.8	%		17.6	%		18.9	%		18.9	%		18.9	%
Employees (8)		4,812			4,938			5,187			5,187			5,187


								Pro Forma
	Historical							as adjusted
	December 31,							for the Offering
	2004		2005		2006			December 31, 2006
	(in millions)

Consolidated Balance Sheet Data:
Rental equipment, net	$	1,127	$	1,421	$	1,739		$	1,739
Total assets		2,422		2,764		3,326			3,321
Debt		1,277		1,247		3,006			2,753
Total liabilities		1,759		1,951		3,761			3,495
Total stockholders’ equity (deficit)		663		814		(435	)		(174	)

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							Pro Forma
							as adjusted
							for the Offering
	Historical						for the Three
	Three Months Ended March 31,						Months Ended
	2006			2007			March 31, 2007
	(in thousands, except per share data)

Condensed Consolidated statement of income data:
Revenues:
Equipment rental revenue	$	302,124		$	347,975		$	347,975
Sale of merchandise		24,651			20,598			20,598
Sale of used rental equipment		59,116			37,774			37,774

Total revenues		385,891			406,347			406,347

Cost of revenues:
Cost of equipment rentals, excluding depreciation		140,456			156,009			156,009
Depreciation—rental equipment		56,599			68,551			68,551
Cost of sales of merchandise		15,505			12,352			12,352
Cost of rental equipment sales		45,022			26,943			26,943

Total cost of revenues		257,582			263,855			263,855

Gross profit		128,309			142,492			142,492

Operating expenses:
Selling, general, and administrative		31,846			34,089			32,589
Depreciation and amortization—non-rental		9,092			10,856			10,856

Total operating expenses		40,938			44,945			43,445

Operating income		87,371			97,547			99,047
Interest expense, net		22,648			64,200			58,477
Other income, net		(161	)		89			89

Income before provisions for income taxes		64,884			33,258			40,481
Provision for income taxes		23,714			13,015			15,832

Net income	$	41,170		$	20,243		$	24,649

Preferred dividends		(3,999	)		—			—

Net income available for common stockholders	$	37,171		$	20,243		$	24,649

Weighted average shares outstanding used in computing net income per common share:
Basic (2)(3)		330,697			90,648			101,219	(4)

Diluted (2)(3)		330,697			92,188			102,760	(4)

Net income per common share:
Basic and diluted (2)(3)	$	0.11		$	0.22		$	0.24	(4)

Other financial data:
EBITDA (5)	$	153,223		$	176,865		$	178,365
Adjusted EBITDA (5)		154,565			179,390			179,390
Adjusted EBITDA margin		40.1	%		44.1	%		44.1	%
Depreciation of rental equipment and depreciation and amortization of non-rental equipment		65,691			79,407			79,407
Capital expenditures:
Rental	$	174,690		$	100,425		$	100,425
Non-rental		6,468			7,869			7,869
Proceeds from sales of used equipment and non-rental equipment		(64,690	)		(41,938	)		(41,938	)

Net capital expenditures	$	116,468		$	66,356		$	66,356

Other operational data (unaudited):
Utilization (6)		70.2	%		70.3	%		70.3	%
Average fleet age (months)		28.0			25.4			25.4
Same store rental revenues growth (7)		24.2	%		12.7	%		12.7	%
Employees (8)		4,967			5,214			5,214


				Pro Forma
	Historical			as adjusted
	March 31,			for the Offering
	2007			March 31, 2007
	(in millions)

Condensed Consolidated Balance Sheet Data:
Rental equipment, net	$	1,743		$	1,743
Total assets		3,281			3,275
Debt		3,009			2,755
Total liabilities		3,689			3,423
Total stockholders’ equity (deficit)		(408	)		(148	)

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(1)		Recapitalization expenses of approximately $10.3 million include fees and expenses related to the consummation of the Recapitalization and not otherwise amortized or applied to stockholders’ equity.


(2)		Share amounts reflect a 100 for 1 stock split effected on November 27, 2006 and a 37.435 for 1 stock split to be effected in connection with this offering.


(3)		Basic net income per common share has been computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share has been computed using the weighted average number of shares of common stock outstanding during the period, increased to give effect to the offering of any shares of common stock. Additionally, for purposes of calculating basic and diluted net income per common share, net income has been adjusted for preferred stock dividends. There were no potentially dilutive securities outstanding during 2004 and 2005. As of December 31, 2006, there were stock options outstanding to purchase a total of 4,395,921 shares of our common stock, which are excluded from the calculations of diluted income per common share and pro forma net income per common share as those stock options were anti-dilutive. However, these stock options were included in the calculations of diluted income per common share and pro forma net income per common share for the three months ended March 31, 2007 as they were dilutive.


(4)		Includes 10,571,875 shares of common stock offered by us, the proceeds of which will be used to repay a portion of the Senior Term Facility. Additionally, there are 1,928,125 shares of common stock offered by us that are not included in the pro forma earnings per share calculation as their proceeds will be used by us to pay offering related expenses.


(5)		EBITDA means consolidated net income before net interest expense, income taxes and depreciation and amortization. We present EBITDA in this prospectus because we believe it provides investors with important additional information to evaluate our performance. We believe EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, although our method of calculating EBITDA and Adjusted EBITDA may vary from the method used by other companies. In addition, we believe that investors, analysts and rating agencies will consider EBITDA useful in measuring our ability to meet our debt service obligations. However, EBITDA is not a recognized measurement under U.S. Generally Accepted Accounted Principles (“GAAP”), and when analyzing our performance, investors should use EBITDA in addition to, and not as an alternative to, net income or net cash provided by operating activities as defined under GAAP.

Adjusted EBITDA as presented herein is a financial measure used in RSC’s new senior asset-backed loan facility (the “Senior ABL Facilities”) and new senior second-lien term loan facility (the “Senior Term Facility”). Adjusted EBITDA means “EBITDA” as that term is defined under RSC’s senior credit facilities, which is generally consolidated net income before net interest expense, income taxes, and depreciation and amortization and before certain other items, including: (i) any non-cash expenses and charges, (ii) total income tax expense, (iii) depreciation expense, (iv) the expense associated with amortization of intangible and other assets, (v) non-cash provisions for reserves for discontinued operations, (vi) any extraordinary, unusual or non-recurring gains or losses or charges or credits, (vii) any gain or loss associated with the sale or write-down of assets (other than rental fleet) not in the ordinary course of business, (viii) any income or loss accounted for by the equity method of accounting and (ix) fees paid to any Sponsor or any affiliate of any Sponsor for the rendering of management consulting, monitoring or financial advisory services. Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to operating income or net income as a measure of operating results or cash flows as a measure of liquidity. Adjusted EBITDA differs from the term “EBITDA” as it is commonly used. In addition, Adjusted EBITDA is reduced by the amount of certain permitted dividends to RSC Holdings.

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Borrowings under our Senior ABL Facilities are a key source of our liquidity. Our ability to borrow under our Senior ABL Facilities depends upon, among other things, the maintenance of a sufficient borrowing base under the Senior ABL Facilities. If we fail to maintain a specified minimum level of borrowing capacity under the Senior ABL Facilities, we will then be subject to financial covenants under the Senior ABL Facilities, including a specified debt to Adjusted EBITDA leverage ratio and a specified Adjusted EBITDA to fixed charges coverage ratio. Failure to comply with these financial ratio covenants would result in a default under the credit agreement for our Senior ABL Facilities and, absent a waiver or an amendment from our lenders, permit the acceleration of all outstanding borrowings under our Senior ABL Facilities. For further information on the terms of the Senior ABL Facilities, see “Description of Certain Indebtedness—Senior ABL Facilities.”

The following table reconciles net income to EBITDA and Adjusted EBITDA:


													Pro Forma
										Pro Forma			for the
										for the			Recapitalization
										Recapitalization			and as adjusted
										for the			for the
										Year			Offering for
	Historical									Ended			the Year Ended
	Year Ended December 31,									December 31,			December 31,
	2004			2005			2006			2006			2006
	(in thousands)

Net income	$	110,977		$	164,197		$	186,522		$	104,999		$	122,700
Depreciation of rental equipment and depreciation and amortization of non-rental		224,964			246,101			292,162			292,162			292,162
Interest expense, net		45,666			64,280			116,370			254,277			231,383
Provision for income taxes		66,717			93,600			117,941			66,393			77,586

EBITDA	$	448,324		$	568,178		$	712,995		$	717,831		$	723,831

Adjustments:
Share-based compensation(a)		1,309			3,077			2,061			2,061			2,061
Other income, net(b)		(58	)		(100	)		(311	)		(311	)		(311	)
Recapitalization expenses and management fees(c)		—			—			10,836			6,000			—

Adjusted EBITDA	$	449,575		$	571,155		$	725,581		$	725,581		$	725,581


						Pro Forma
						as adjusted
	Historical					for the Offering
	Three Months Ended					for the Three Months
	March 31,					Ended March 31,
	2006			2007		2007
	(in thousands)
Net Income	$	41,170		$	20,243	$	24,649
Depreciation of rental equipment and depreciation and amortization of non-rental		65,691			79,407		79,407
Interest expense, net		22,648			64,200		58,477
Provision for income taxes		23,714			13,015		15,832
EBITDA	$	153,223		$	176,865	$	178,365

Adjustments:
Share based compensation(a)		1,503			936		936
Other income, net(b)		(161	)		89		89
Management fees(d)		—			1,500		—

Adjusted EBITDA	$	154,565		$	179,390	$	179,390

_ _


(a)		Share-based compensation amounts include the 2006 adoption of SFAS No. 123R, Share-Based Payment, for stock options granted to key employees in 2006 and share appreciation rights (“SARS”) granted to key employees by ACAB. SARS do not entitle the holder to acquire shares, but only to receive, in cash, from ACAB the difference between the price of ACAB’s A shares at exercise and the price of those shares determined at the grant date.


(b)		Reflects currency translation (gain) loss incurred in each of the periods presented.

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(c)		The historical amount for the year ended 2006 includes Recapitalization expenses of approximately $10.3 million and $0.6 million of management fees. The pro forma for the recapitalization amount shown includes annual management fees of $6 million. The management fee will be terminated in connection with this offering and has been removed from the amount shown as pro forma for the Recapitalization and as adjusted for the offering.


(d)		The historical amount for the three months ended March 31, 2007 reflects $1.5 million of management fees that we pay each quarter to affiliates of the Sponsors. The management fee will be terminated in connection with this offering.


(6)		Utilization is defined as the average dollar value of equipment currently rented by customers (based on original equipment cost) for the relevant period divided by the average aggregate dollar value of all equipment (based on original equipment cost) for the relevant period. For a calculation of utilization for each historical period presented, see note 4 to “Other operational data” under “Selected Historical Consolidated Financial Data.”

(7)		Same store rental revenue growth is calculated as the year over year change in rental revenue for stores that are open at the end of the period reported and have been operating under the Company’s direction for more than 12 months.

(8)		Employee count is given as of the end of the period indicated and the data reflect the actual head count as of each period presented.

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RISK FACTORS

Our business is subject to a number of important risks and uncertainties, some of which are described below. Any of these risks may have a material adverse effect on our business, financial condition, results of operations and cash flows. In such a case, you may lose all or part of your investment in our common stock.

Risks Related to Our Business

Our business could be hurt by a decline in non-residential construction and industrial activities or a decline in the amount of construction equipment that is rented.

For both the year ended December 31, 2006 and the three months ended March 31, 2007, our non-residential construction and industrial customers together accounted for approximately 94% of our total revenues. A weakness in non-residential construction or industrial activity, or a decline in the desirability of renting equipment, may decrease the demand for our equipment or depress the prices we charge for our products and services. We have identified below certain factors which may cause weakness, either temporary or long-term, in the non-residential construction and industrial sectors:


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

	•	an increase in the cost of construction materials;

	•	an increase in interest rates;

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

	•	terrorism or hostilities involving the United States or Canada.

A weakness in the non-residential construction and industrial sectors caused by these or other factors could have a material adverse effect on our business, financial conditions, results of operations and cash flows and may have a material adverse effect on residual values realized on the disposition of our rental equipment.

We face intense competition that may lead to our inability to increase or maintain our prices, which could have a material adverse impact on our results of operations.

The equipment rental industry is highly competitive and highly fragmented. Many of the markets in which we operate are served by numerous competitors, ranging from national equipment rental companies, like ourselves, to smaller multi-regional companies and small, independent businesses with a limited number of locations. See “Business—Competition.” Some of our principal competitors are less leveraged than we are, have greater financial resources, may be more geographically diversified, may have greater name recognition than we do and may be better able to withstand adverse market conditions within the industry. We generally compete on the basis of, among other things, quality and breadth of service, expertise, reliability, price and the size, mix and relative attractiveness of our rental equipment fleet, which is significantly affected by the level of our capital expenditures. If we are required to reduce or delay capital expenditures for any reason, including due to restrictions contained in the Senior ABL Facilities and the Senior Term Facility, together, the Senior Credit Facilities, or the indenture governing the Notes (as defined under “Supplemental Information”), the aging of our rental fleet may place us at a disadvantage compared to our competitors and adversely impact our pricing. In addition, our competitors may seek to compete aggressively on the basis of pricing. To the extent that we choose to match our competitors’ downward pricing, it could have a material adverse impact on our results of operations. To the extent that we choose not to match or remain within a reasonable competitive distance from our

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competitors’ pricing, it could also have a material adverse impact on our results of operations, as we may lose rental volume.

We may also encounter increased competition from existing competitors or new market entrants in the future, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our revenues and operating results may fluctuate and any unexpected periods of decline could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our revenues and operating results have varied historically from period to period and may continue to do so. We have identified below certain of the factors which may cause our revenues and operating results to vary:


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

	•	the timing of expenditures for new equipment and the disposal of used equipment;

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

	•	general economic conditions in the markets where we operate;

	•	the cyclical nature of our customers’ businesses, particularly those operating in the non-residential construction and industrial sectors;

	•	price changes in response to competitive factors;

	•	seasonal rental patterns, with rental activity tending to be lowest in the winter;

	•	timing of acquisitions and new location openings and related costs;

	•	labor shortages, work stoppages or other labor difficulties;

	•	possible unrecorded liabilities of acquired companies;

	•	our effectiveness in integrating acquired businesses and new locations into our existing operations; and

	•	possible write-offs or exceptional charges due to changes in applicable accounting standards, impairment of obsolete or damaged equipment or other assets, or the refinancing of our existing debt.

One or a number of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our expenses could increase and our relationships with our customers could be hurt if there is an adverse change in our relationships with our equipment suppliers or if our suppliers are unable to provide us with products we rely on to generate revenues.

All of our inventory consists of equipment products that we purchase from various suppliers and manufacturers. We rely on these suppliers and manufacturers to provide us with equipment which we then rent to our customers. We have not entered into any long-term equipment supply arrangements with manufacturers. To the extent we are unable to rely on these suppliers and manufacturers, either due to an adverse change in our relationships with them, or if they significantly raised their costs, or such suppliers or manufacturers simply are unable to supply us with equipment in a timely manner, our business could be adversely affected through higher costs or the resulting potential inability to service our customers. We may experience delays in receiving equipment from some manufacturers due to factors

15

beyond our control, including raw material shortages, and, to the extent that we experience any such delays, our business could be hurt by the resulting inability to service our customers. In addition, while we have negotiated favorable payment terms with the suppliers that provide us with the majority of our equipment, these payment terms may not be available to us at a later time.

If our operating costs increase as our rental fleet ages and we are unable to pass along such costs, our earnings will decrease.

As our fleet of rental equipment ages, the cost of maintaining such equipment, if not replaced within a certain period of time, will likely increase. The costs of maintenance may materially increase in the future. Any material increase in such costs could have a material adverse effect on our business, financial condition and results of operations.

The cost of new equipment we use in our rental fleet is increasing and therefore we may spend more for replacement equipment, and in some cases we may not be able to procure equipment on a timely basis due to supplier constraints.

The cost of new equipment used in our rental fleet increased in 2005 and 2006 and in the three months ended March 31, 2007. These cost increases are due primarily to increased material costs, including increases in the cost of steel, which is a primary material used in most of the equipment we use, and increases in the cost of fuel, which is used in the manufacturing process and in delivering equipment to us. Although these increases did not have a significant impact on our financial conditions and results of operations in the last fiscal year, these increases could materially adversely impact our financial condition and results of operations in future periods.

Our rental fleet is subject to residual value risk upon disposition.

The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold. The market value of used rental equipment depends on several factors, including:


	•	the market price for new equipment of a like kind;

	•	wear and tear on the equipment relative to its age and the performance of preventive maintenance;

	•	the time of year that it is sold;

	•	worldwide and domestic demand for used equipment; and

	•	general economic conditions.

We include in income from operations the difference between the sales price and the depreciated value of an item of equipment sold. Changes in our assumptions regarding depreciation could change both our depreciation expense as well as the gain or loss realized upon disposal of equipment. Sales of our used rental equipment at prices that fall significantly below our projections, or our inability to sell such equipment at all, could have a negative impact on our results of operations.

Our reliance on available borrowings under our Senior ABL Facilities and cash from operating activities to purchase new equipment subjects us to a number of risks, many of which are beyond our control.

We rely significantly on available borrowings under our Senior ABL Facilities to purchase equipment. As of March 31, 2007, we had approximately $483 million of available borrowings under the revolving credit portion of our Senior ABL Facilities. If our access to such financing

16

were unavailable, reduced or were to become significantly more expensive for any reason, including, without limitation, due to our inability to meet the coverage ratio or leverage ratio tests in our Senior ABL Facilities or satisfy any other condition in the facilities or due to an increase in interest rates generally, we may not be able to finance new equipment acquisitions on favorable terms, or at all. In addition, if we are unable to generate excess cash from operating activities after servicing our debt due to negative economic or industry trends including, among others, those set forth above under “—Our business could be hurt by a decline in non-residential construction and industrial activities or a decline in the amount of construction equipment that is rented” and “—We face intense competition that may lead to downward pricing, or an inability to increase prices, which could have a material adverse impact on our results of operations,” and we are not able to finance new equipment acquisitions, we may not be able to make necessary equipment rental acquisitions at all.

Any failure of ACAB and ACF to indemnify us against and defend us from certain claims in accordance with the terms of the Recapitalization Agreement could have a material adverse effect on us.

Pursuant to the Recapitalization Agreement, and subject to certain limitations set forth therein, ACAB and ACF have agreed to indemnify RSC Holdings and its subsidiaries against and defend us from all losses, including costs and reasonable expenses, resulting from certain claims related to the Recapitalization, our business and our former businesses including, without limitation: claims alleging exposure to silica and asbestos; the transfer of certain businesses owned by RSC Holdings but not acquired by the Sponsors in connection with the Recapitalization; certain employee-related matters; any activities, operations or business conducted by RSC Holdings or any of its affiliates other than our business; and certain tax matters. ACAB’s and ACF’s indemnity for claims related to alleged exposure to silica entitles us to coverage for one-half of all silica related losses until the aggregate amount of such losses equals $10 million and to coverage for such losses in excess of $10 million until the aggregate amount of such losses equals $35 million. ACAB’s and ACF’s general indemnity for breach of representations and warranties related to our business covers aggregate losses in excess of $33 million, excluding any individual loss of less than $75,000, and the maximum we can recover is 20% of the recapitalization purchase price set forth in the Recapitalization Agreement, or the Recapitalization Purchase Price, as adjusted in accordance with the Recapitalization Agreement. Furthermore, ACAB and ACF may not have sufficient assets, income and access to financing to enable them to satisfy their indemnification obligations under the Recapitalization Agreement or that they will continue to honor those obligations. If ACAB or ACF do not satisfy or otherwise honor their obligations, we may be forced to bear the losses described above. Any failure by ACAB or ACF to perform these obligations could have a material adverse effect on us.

Disruptions in our information technology systems could limit our ability to effectively monitor and control our operations and adversely affect our operating results.

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, materially adversely affect our financial condition or operating results by limiting our capacity to effectively monitor and control our operations and adjust to changing market conditions in a timely manner. In addition, because our systems contain information about individuals and businesses, our failure to maintain the security of the data we hold, whether the result of our own error or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenues, increased costs and other material adverse effects on our results of operations.

17

The Sponsors or their affiliates may compete directly against us.

Corporate opportunities may arise in the area of potential competitive business activities that may be attractive to us as well as to one or more of the Sponsors or their affiliates, including through potential acquisitions by one or more Sponsors or their affiliates of competing businesses. Any competition could intensify if an affiliate or subsidiary of one or more of the Sponsors were to enter into or acquire a business similar to our equipment rental operations. Given that we are not controlled by any one of the Sponsors, the Sponsors and their affiliates may be inclined to direct relevant corporate opportunities to entities which they control individually rather than to us. In addition, our amended and restated certificate of incorporation will provide that the Sponsors are under no obligation to communicate or offer any corporate opportunity to us, even if such opportunity might reasonably have been expected to be of interest to us or our subsidiaries. See “Description of Capital Stock” and “Certain Relationships and Related Party Transactions—Stockholders Agreement.”

ACAB may compete against us in the future.

Certain affiliates of ACAB are participants in the equipment rental industry. In addition, following the expiration of a non-compete provision in the Recapitalization Agreement two years following November 27, 2006, or the Recapitalization Closing Date, ACAB and its affiliates will be free to compete with us in the rental equipment industry in the United States and Canada. In addition, nothing in the Recapitalization Agreement prohibits ACAB and its affiliates from (i) conducting (a) any business they conduct immediately prior to closing, including the operation of the Prime Energy division’s oil-free compressor equipment rental and sales business, which was transferred to an affiliate of ACAB, (b) the business of selling, renting (as long as such renting is not in competition with our business) and leasing products they manufacture, or selling used equipment, or (c) the rental equipment business outside of the United States and Canada, (ii) investing in or holding not more than 10% of the outstanding capital stock of an entity that competes with us or (iii) acquiring and continuing to own and operate an entity that competes with us, provided the rental revenues of such entity in the United States and Canada account for no more than 20% of such entity’s consolidated revenues at the time of such acquisition. Therefore, notwithstanding the non-compete provision of the Recapitalization Agreement, ACAB and its affiliates may, to the extent described above, compete against us.

If we decide to acquire or combine with one or more businesses in the future, any such transaction could pose integration problems or have an adverse effect on our results of operations.

We have grown our business in recent years, and we intend to continue to grow our business, primarily through internal growth. We do, however, from time to time consider opportunistic acquisitions and combination opportunities. If we were to pursue any such transaction, we would face integration risks including, without limitation:


	•	potential disruption of our ongoing business and distraction of management;

	•	difficulty integrating the acquired business; and

	•	exposure to unknown liabilities, including litigation against the companies we may acquire.

If we make acquisitions or enter into combinations in the future, transaction-related accounting charges may affect our balance sheet and results of operations. In addition, the financing of any significant transaction may result in changes in our capital structure, including the incurrence of additional indebtedness. We may not be successful in addressing these risks or any other problems encountered in connection with any such transaction.

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If we fail to retain key management and personnel, we may be unable to implement our business plan.

One of the most important factors in our ability to profitably execute our business plan is our ability to attract, develop and retain qualified personnel, particularly regional and district management. Our success in attracting and retaining qualified people is dependent on the resources available in individual geographic areas and the impact on the labor supply due to general economic conditions as well as our ability to provide a competitive compensation package and work environment.

We are exposed to various possible claims relating to our business and our insurance may not fully protect us.

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 vehicles and our employees, (3) employment-related claims, (4) property damage and pollution related claims and (5) commercial claims. Our insurance policies have deductibles or self-insured retentions of $1 million for general liability and $1.5 million for automobile liability, on a per occurrence basis; $500,000 per occurrence for workers’ compensation claims; and $250,000 per occurrence for pollution coverage. Currently, we believe that we have adequate insurance coverage for the protection of our assets and operations. However, our insurance may not fully protect us for 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. In addition, we may be exposed to uninsured liability at levels in excess of our policy limits.

If we are found liable for any significant claims that are not covered by insurance, our liquidity and operating results could be materially adversely affected. It is possible that our insurance carrier may disclaim coverage for any class action and derivative lawsuits against us. It is also 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 not available at all.

We may be unable to establish and/or maintain an effective system of internal control over financial reporting and comply with Section 404 of the Sarbanes-Oxley Act of 2002 and other related provisions of the U.S. securities laws.

In connection with this initial public offering, we will be required to file certain reports, including annual and quarterly periodic reports, under the Securities Exchange Act of 1934. The Commission, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal control over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal control over financial reporting. In addition, an independent registered public accounting firm must attest to and report on management’s assessment of the effectiveness of our internal control over financial reporting. Under the Commission’s rules as currently in effect, Section 404 of the Sarbanes-Oxley Act will apply to our second annual report on Form 10-K. In addition, beginning with our first periodic report filed after we file our second annual report on Form 10-K, we will be required to report in each periodic report that we file with the Commission as to any changes in our internal control over financial reporting since the preceding fiscal quarter and the effectiveness and adequacy of our disclosure controls and procedures. Our reporting obligations under the U.S. securities laws will place additional burdens on our management, operational and financial resources and systems. To the extent that we are unable to establish and/or maintain effective internal control over financial reporting and/or disclosure controls and procedures, we may be unable to produce reliable financial reports and/or public disclosure, detect and prevent fraud and comply with our reporting obligations under the U.S. securities laws on a timely basis. Any

19

such failure could harm our business and negatively affect the market value of your investment in our common stock. In addition, failure to achieve and maintain effective internal control over financial reporting and/or disclosure controls and procedures could result in the loss of investor confidence in the reliability of our financial statements and public disclosure and a loss of customers, which in turn could harm our business and negatively affect the market value of your investment in our common stock.

Environmental, health and safety laws, regulations and requirements and the costs of complying with them, or any liability or obligation imposed under them, could adversely affect our financial position, results of operations or cash flow.

Our operations are subject to a variety of federal, state, local and foreign environmental, health and safety laws and regulations. These laws regulate releases of petroleum products and other hazardous substances into the environment as well as storage, treatment, transport and disposal of wastes, and the remediation of soil and groundwater contamination. In addition, certain of our customers require us to maintain certain safety levels. Failure to maintain such levels could lead to a loss of such customers.

These laws also regulate our ownership and operation of tanks used for the storage of petroleum products and other regulated substances.

We have made, and will continue to make, expenditures to comply with environmental laws and regulations, including, among others, expenditures for the investigation and cleanup of contamination at or emanating from, currently and formerly owned and leased properties, as well as contamination at other locations at which our wastes have reportedly been identified. Some of these laws impose strict and in certain circumstances joint and several liability on current and former owners or operators of contaminated sites for costs of investigation and remediation.

Compliance with existing or future environmental, health and safety requirements may require material expenditures by us or otherwise have a material adverse effect on our consolidated financial position, results of operations or cash flow.

We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business.

Our ability to compete effectively depends in part upon our rights in trademarks, copyrights and other intellectual property rights we own or license. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property and other proprietary rights may not be adequate. Litigation may be necessary to enforce our intellectual property rights and protect our proprietary information, or to defend against claims by third parties that our services or our use of intellectual property infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial costs and diversion of our resources. A successful claim of trademark, copyright or other intellectual property infringement against us could prevent us from providing services, which could have a material adverse effect on our business, financial condition or results of operations.

20

We face risks related to changes in our ownership.

Certain of our agreements with third parties, including our real property leases, require the consent of such parties in connection with any change in ownership of us. We will generally seek such consents and waivers, although we may not seek certain consents if our not obtaining them will not, in our view, have a material adverse effect on our consolidated financial position or results of operations. If we fail to obtain any required consent or waiver, the applicable third parties could seek to terminate their agreement with us and, as a result, our ability to conduct our business could be impaired until we are able to enter into replacement agreements, resulting in a material adverse effect on our results of operations or financial condition.

Risks Related to Our Substantial Indebtedness

We have substantial debt and may incur substantial additional debt, which could adversely affect our financial condition, our ability to obtain financing in the future and our ability to react to changes in our business.

We have a significant amount of debt. As of March 31, 2007, on a pro forma basis after giving effect to this offering and the use of the net proceeds therefrom as described in “Use of Proceeds,” we would have had approximately $2,755.1 million of debt outstanding.

Our substantial debt could have important consequences to you. For example, it could:


	•	make it more difficult for us to satisfy our obligations to the holders of our Notes and to the lenders under our Senior Credit Facilities, resulting in possible defaults on and acceleration of such indebtedness;

	•	require us to dedicate a substantial portion of our cash flow from operations to make payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;

	•	increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations, because a portion of our borrowings, including under the Senior Credit Facilities, is at variable rates of interest;

	•	place us at a competitive disadvantage to our competitors with proportionately less debt or comparable debt at more favorable interest rates;

	•	limit our ability to refinance our existing indebtedness or borrow additional funds in the future;

	•	limit our flexibility in planning for, or reacting to, changing conditions in our business and industry; and

	•	limit our ability to react to competitive pressures, or make it difficult for us to carry out capital spending that is necessary or important to our growth strategy and our efforts to improve operating margins.

Any of the foregoing impacts of our substantial indebtedness could have a material adverse effect on our business, financial condition and results of operations.

Despite our current indebtedness levels, we and our subsidiaries may be able to incur substantial additional debt, which could further exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the instruments governing our indebtedness do not prohibit us or fully prohibit us or our subsidiaries from doing so. Both the Senior ABL Facilities and the Senior

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Term Facility permit additional borrowings beyond the committed financing thereunder under certain circumstances. If new debt is added to our current debt levels, the related risks that we now face would increase. In addition, the instruments governing our indebtedness do not prevent us or our subsidiaries from incurring obligations that do not constitute indebtedness.

We may not be able to generate sufficient cash to service all of our debt, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.

Our ability to make scheduled payments on, or to refinance our obligations under, our debt will depend on our financial and operating performance and that of our subsidiaries, which, in turn, will be subject to prevailing economic and competitive conditions and to the financial and business factors, many of which may be beyond our control. See the table under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations” for disclosure regarding the amount of cash required to service our debt.

We may not maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital or restructure our debt. In the future, our cash flow and capital resources may not be sufficient for payments of interest on and principal of our debt, and such alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. We may not be able to refinance any of our indebtedness or obtain additional financing, particularly because of our anticipated high levels of debt and the debt incurrence restrictions imposed by the agreements governing our debt, as well as prevailing market conditions. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The instruments governing our indebtedness restrict our ability to dispose of assets and use the proceeds from any such dispositions. We may not be able to consummate those sales, or if we do, at an opportune time, and the proceeds that we realize may not be adequate to meet debt service obligations when due.

A significant portion of our outstanding indebtedness is secured by substantially all of our consolidated assets. As a result of these security interests, such assets would only be available to satisfy claims of our general creditors or to holders of our equity securities if we were to become insolvent to the extent the value of such assets exceeded the amount of our indebtedness and other obligations. In addition, the existence of these security interests may adversely affect our financial flexibility.

Indebtedness under our Senior Credit Facilities is secured by a lien on substantially all our assets. Accordingly, if an event of default were to occur under our Senior Credit Facilities, the senior secured lenders under such facilities would have a prior right to our assets, to the exclusion of our general creditors. In that event, our assets would first be used to repay in full all indebtedness and other obligations secured by them (including all amounts outstanding under our Senior Credit Facilities), resulting in all or a portion of our assets being unavailable to satisfy the claims of our unsecured indebtedness, including our Notes. Only after satisfying the claims of our unsecured creditors and our subsidiaries’ unsecured creditors would any amount be available for our equity holders.

As of March 31, 2007, substantially all of our consolidated assets, including our equipment rental fleets, have been pledged for the benefit of the lenders under our Senior Credit Facilities. As a result, the lenders under these facilities would have a prior claim on such assets in the event of our bankruptcy, insolvency, liquidation or reorganization, and we may not have

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sufficient funds to pay all of our creditors. In that event, holders of our equity securities would not be entitled to receive any of our assets or the proceeds therefrom. See “Description of Certain Indebtedness—Senior Credit Facilities—Senior Term Facility—Guarantees; Security” and “—Senior ABL Facilities—Guarantees; Security.” As discussed below, the pledge of these assets and other restrictions may limit our flexibility in raising capital for other purposes. Because substantially all of our assets are pledged under these financing arrangements, our ability to incur additional secured indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on our financial flexibility.

Restrictive covenants in certain of the agreements and instruments governing our indebtedness may adversely affect our financial flexibility.

Our Senior Credit Facilities contain covenants that, among other things, restrict RSC’s and RSC Holdings III, LLC’s ability to:


	•	incur additional indebtedness or provide guarantees;

	•	engage in mergers, acquisitions or dispositions;

	•	enter into sale-leaseback transactions;

	•	make dividends and other restricted payments;

	•	prepay other indebtedness;

	•	engage in certain transactions with affiliates;

	•	make other investments;

	•	change the nature of our business;

	•	incur liens;

	•	take actions other than those enumerated; and

	•	amend specified debt agreements.

In addition, under the Senior ABL Facilities, if we fail to maintain a specified minimum level of borrowing capacity, we will then be subject to financial covenants, including covenants that will obligate us to maintain a specified leverage ratio and a specified fixed charges coverage ratio. Our ability to comply with these covenants in future periods will depend on our ongoing financial and operating performance, which in turn will be subject to economic conditions and to financial, market and competitive factors, many of which are beyond our control. Our ability to comply with these covenants in future periods will also depend substantially on the pricing of our products and services, our success at implementing cost reduction initiatives and our ability to successfully implement our overall business strategy.

The indenture governing the Notes also contains restrictive covenants that, among other things, limit RSC Holdings III, LLC’s ability and the ability of its restricted subsidiaries to:


	•	incur additional debt;

	•	pay dividends or distributions on their capital stock or repurchase their capital stock;

	•	make certain investments;

	•	create liens on their assets to secure debt;

	•	enter into certain transactions with affiliates;

	•	create limitations on the ability of the restricted subsidiaries to make dividends or distributions to their respective parents;

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	•	merge or consolidate with another company; and

	•	transfer and sell assets.

Our ability to comply with the covenants and restrictions contained in the Senior Credit Facilities and the indenture governing the Notes may be affected by economic, financial and industry conditions beyond our control. The breach of any of these covenants or restrictions could result in a default under either the Senior Credit Facilities or the indenture that would permit the applicable lenders or noteholders, as the case may be, to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. In any such case, we may be unable to make borrowings under the Senior Credit Facilities and may not be able to repay the amounts due under the Senior Credit Facilities and the Notes. This could have a material adverse effect on our financial condition and results of operations and could cause us to become bankrupt or insolvent.

The instruments governing our debt contain cross default or cross acceleration provisions that may cause all of the debt issued under such instruments to become immediately due and payable as a result of a default under an unrelated debt instrument.

Our failure to comply with the obligations contained in the indenture governing our Notes and the agreements governing our Senior Credit Facilities or other instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets and otherwise curtail our operations in order to pay our creditors. Such alternative measures could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Common Stock and This Offering

RSC Holdings is a holding company with no operations of its own that depends on its subsidiaries for cash.

The operations of RSC Holdings are conducted almost entirely through its subsidiaries and its ability to generate cash to meet its debt service obligations or to pay dividends is highly dependent on the earnings and the receipt of funds from its subsidiaries via dividends or intercompany loans. However, none of the subsidiaries of RSC Holdings is obligated to make funds available to RSC Holdings for the payment of dividends. In addition, payments of dividends and interest among the companies in our group may be subject to withholding taxes. Further, the indenture governing the Notes and the Senior Credit Facilities significantly restrict the ability of the subsidiaries of RSC Holdings to pay dividends or otherwise transfer assets to RSC Holdings. See “Risk Factors—Risks Related to Our Substantial Indebtedness—Restrictive covenants in certain of the agreements and instruments governing our indebtedness may adversely affect our financial flexibility.” In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.

There currently exists no market for our common stock. An active trading market may not develop for our common stock. If our stock price fluctuates after this offering, you could lose all or a significant part of your investment.

Prior to this offering, there was no public market for shares of our common stock. An active market may not develop following the completion of this offering or, if developed, may

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not be maintained. We and the selling stockholders have negotiated the initial public offering price with the underwriters. The initial public offering price may not be indicative of the price at which our common stock will trade following completion of this offering. The market price of our common stock may also be influenced by many factors, some of which are beyond our control, including:


	•	securities analysts elect not to cover our common stock after this offering, changes in financial estimates by analysts or a downgrade of our stock or our sector by analysts;

	•	announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

	•	variations in quarterly operating results;

	•	loss of a large customer or supplier;

	•	general economic conditions;

	•	war, terrorist acts and epidemic disease;

	•	future sales of our common stock; and

	•	investor perceptions of us and the equipment rental industry.

As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial offering price. In addition, the stock market in general has experienced extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies like us. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.

A few significant stockholders control the direction of our business. If the ownership of our common stock continues to be highly concentrated, it will prevent you and other stockholders from influencing significant corporate decisions.

Following the completion of this offering, Ripplewood and Oak Hill will each beneficially own approximately 34% of the outstanding shares of our common stock assuming that the underwriters do not exercise their option to purchase additional shares. Ripplewood, Oak Hill, ACF and RSC Holdings are parties to a stockholders agreement, or the Stockholders Agreement, pursuant to which the Sponsors currently have the ability to cause the election of a majority of our Board of Directors. Under the terms of the Amended and Restated Stockholders Agreement to be entered into in connection with this offering, the Sponsors will continue to have the right to nominate a majority of the members of our Board of Directors and to exercise control over matters requiring stockholder approval and our policy and affairs, for example, by being able to direct the use of proceeds received from this and future security offerings. See “Certain Relationships and Related Party Transactions—Stockholders Agreement.” In addition, following the consummation of this offering, we will be a “controlled company” within the meaning of the New York Stock Exchange rules and, as a result, currently intend to rely on exemptions from certain corporate governance requirements.

The concentrated holdings of the Sponsors, certain provisions of the Amended and Restated Stockholders Agreement and the presence of the Sponsors’ nominees on our Board of Directors may result in a delay or the deterrence of possible changes in control of our company, which may reduce the market price of our common stock. The interests of our existing stockholders may conflict with the interests of our other stockholders. Our Board of Directors intends to adopt corporate governance guidelines that will, among other things, address potential conflicts between a director’s interests and our interests. In addition, we intend to adopt a code of business conduct that, among other things, requires our employees

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to avoid actions or relationships that might conflict or appear to conflict with their job responsibilities or the interests of RSC Holdings and to disclose their outside activities, financial interests or relationships that may present a possible conflict of interest or the appearance of a conflict to management or corporate counsel. These corporate governance guidelines and code of business ethics will not, by themselves, prohibit transactions with our principal stockholders.

Our share price may decline due to the large number of shares eligible for future sale.

Sales of substantial amounts of our common stock, or the possibility of such sales, may adversely affect the price of our common stock and impede our ability to raise capital through the issuance of equity securities.

Upon consummation of this offering, there will be 103,147,591 shares of common stock outstanding. Of these shares, the shares of common stock sold in the offering will be freely transferable without restriction or further registration under the Securities Act, unless purchased by our “affiliates” as that term is defined in Rule 144 under the Securities Act. The remaining 82,314,258 shares of common stock outstanding will be restricted securities within the meaning of Rule 144 under the Securities Act, but will be eligible for resale subject to applicable volume, manner of sale, holding period and other limitations of Rule 144 or pursuant to an exemption from registration under Rule 701 under the Securities Act. Upon completion of this offering, we intend to file one or more registration statements under the Securities Act to register the shares of common stock to be issued under our stock incentive plan and, as a result, all shares of common stock acquired upon exercise of stock options and other equity-based awards granted under this plan will also be freely tradable under the Securities Act unless purchased by our affiliates. A total of 5,790,959 shares of common stock are reserved for issuance under our stock incentive plan. As of March 31, 2007, there were stock options outstanding to purchase a total of 4,395,921 shares of our common stock.

We, the Sponsors, our executive officers and directors and ACF have agreed to a “lock-up,” meaning that, subject to certain exceptions, neither we nor they will sell any shares without the prior consent of the representatives of the underwriters for 180 days after the date of this prospectus. Following the expiration of this 180-day lock-up period, 82,314,258 of these shares of our common stock will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144. See “Shares Eligible for Future Sale” for a discussion of the shares of common stock that may be sold into the public market in the future. In addition, our existing stockholders have the right under certain circumstances to require that we register their shares for resale. As of March 31, 2007, these registration rights apply to the 69,510,661 shares of our outstanding common stock owned by the Sponsors.

In addition, sales of our common stock that result in certain persons associated with the Sponsors holding less than 40% in the aggregate of the number of shares of our common stock held by them on the Recapitalization Closing Date will result in requiring us to pay current interest on any contingent earn-out notes that we may have issued. See “Recent Transactions—The Recapitalization—Contingent Earn-Out Notes.”

Purchasers of our common stock will experience immediate and substantial dilution resulting in their shares being worth less on a net tangible book value basis than the amount they invested.

The initial public offering price is expected to be significantly higher than the net tangible book value per share of our common stock. Purchasers of the common stock in this offering will experience an immediate dilution in net tangible book value of $34.41 per share of

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common stock purchased. In the past, we issued options to acquire shares of common stock at prices that may be significantly below the initial public offering price. To the extent that these outstanding options are exercised, there may be further dilution to investors. Accordingly, in the event we are liquidated, investors may not receive the full amount of their investment. See “Dilution.”

Our certificate of incorporation, by-laws and Delaware law may discourage takeovers and business combinations that our stockholders might consider in their best interests.

A number of provisions we intend to include, effective as of the offering, in our certificate of incorporation and by-laws may have the effect of delaying, deterring, preventing or rendering more difficult a change in control of RSC Holdings that our stockholders might consider in their best interests. These provisions include:


	•	establishment of a classified Board of Directors, with staggered terms;

	•	granting to the Board of Directors sole power to set the number of directors and to fill any vacancy on the Board of Directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

	•	limitations on the ability of stockholders to remove directors;

	•	the ability of the Board of Directors to designate and issue one or more series of preferred stock without stockholder approval, the terms of which may be determined at the sole discretion of the Board of Directors;

	•	prohibition on stockholders from calling special meetings of stockholders;

	•	establishment of advance notice requirements for stockholder proposals and nominations for election to the Board of Directors at stockholder meetings; and

	•	prohibiting our stockholders from acting by written consent if the Sponsors cease to collectively hold a majority of our outstanding common stock.

These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future. In addition, we expect to opt out of Section 203 of the Delaware General Corporation Law, which would have otherwise imposed additional requirements regarding mergers and other business combinations.

Our certificate of incorporation and by-laws may also make it difficult for stockholders to replace or remove our management. These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.

See “Description of Capital Stock” for additional information on the anti-takeover measures applicable to us.

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SUPPLEMENTAL INFORMATION

We have not authorized anyone to give you any information or to make any representations about the transactions we discuss in this prospectus other than those contained in this prospectus, any free writing prospectus prepared by us or any other information to which we have specifically referred you. If you are given any information or representation about these matters that is not discussed in this prospectus, you must not rely on that information. This prospectus is not an offer to sell anywhere or to anyone where or to whom we are not permitted to offer to sell securities under applicable law.

In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense.

We have filed with the U.S. Securities and Exchange Commission, or the “Commission,” a registration statement on Form S-1 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus, filed as part of the registration statement, does not contain all the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the Commission. For further information about us and our common stock, we refer you to the registration statement and to its exhibits and schedules. With respect to statements in this prospectus about the contents of any contract, agreement or other document, in each instance, we refer you to the copy of such contract, agreement or document filed as an exhibit to the registration statement.

The public may read and copy any reports or other information that we and our subsidiaries file with the Commission. Such filings are available to the public over the Internet at the Commission’s website at http://www.sec.gov. The Commission’s website is included in this prospectus as an inactive textual reference only. You may also read and copy any document that we file with the Commission at its public reference room at 100 F Street, N.E., Washington D.C. 20549. You may obtain information on the operation of the public reference room by calling the Commission at 1-800-SEC-0330.

RSC^®, RSC Online^®, RSC Equipment Rental^® and Total Control^® are four of our many trademarks. This prospectus also refers to brand names, trademarks or service marks of other companies. All brand names and other trademarks or service marks cited in this prospectus are the property of their respective holders.

Our website http://www.rscrental.com is included in this prospectus as an inactive textual reference only.

Unless the context otherwise requires, in this prospectus, (i) “RSC Holdings” means RSC Holdings Inc., formerly known as Atlas Copco North America Inc., the issuer of the common stock offered by this prospectus and the ultimate parent company of our operating subsidiaries, (ii) “RSC” means RSC Equipment Rental, Inc., formerly known as Rental Service Corporation, our primary operating company and an indirect wholly owned subsidiary of RSC Holdings, (iii) “we,” “us” and “our” mean RSC Holdings and its consolidated subsidiaries, including RSC, (iv) “equipment” means industrial, construction and material handling equipment, (v) “Notes” and “Senior Notes” refer to the 91/2% Senior Notes issued and sold by Rental Service Corporation and RSC Holdings III, LLC on November 27, 2006, (vi) we assume no exercise of the underwriters’ option to purchase additional shares pursuant to the overallotment option, (vii) we assume that we will issue 12,500,000 shares of common stock in this offering and (viii) the information included herein gives effect to a 37.435 for 1 stock split to be effected prior to the completion of this offering.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements other than statements of historical facts included in this prospectus, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “plan”, “seek”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe” or “continue” or the negative thereof or variations thereon or similar terminology.

Forward-looking statements include the statements in this prospectus regarding, among other things: management forecasts; efficiencies; cost savings and opportunities to increase productivity and profitability; income and margins; liquidity; anticipated growth; economies of scale; the economy; future economic performance; our ability to maintain profitability during adverse economic cycles and unfavorable external events; our business strategies; future acquisitions and dispositions; litigation; potential and contingent liabilities; management’s plans; taxes; and refinancing of existing debt.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations are set forth below and disclosed under “Risk Factors” and elsewhere in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this prospectus. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the following cautionary statements:


	•	the effect of an economic downturn or other factors resulting in a decline in non-residential construction and capital investment;

	•	increased competition from other companies in our industry and our inability to increase or maintain our prices;

	•	our ability to obtain equipment at competitive prices;

	•	changes in the attitude of our customers toward renting, as compared with purchasing, equipment;

	•	our ability to generate cash and/or incur additional indebtedness to finance equipment purchases;

	•	heavy reliance on centralized information systems;

	•	exposure to claims for personal injury, death and property damage resulting from the use of equipment rented or sold by us;

	•	the ability and willingness of ACAB and ACF to continue to meet and/or perform their obligations under the Recapitalization Agreement to indemnify for and defend us against various matters, including, but not limited to, litigation relating to alleged exposure to silica and asbestos;

	•	the effect of changes in laws and regulations, including those relating to the environment and customer privacy, among others;

	•	risks related to our substantial amount of indebtedness;

	•	fluctuations in fuel or supply costs;

	•	claims that the software products and information systems on which we rely infringe on the intellectual property rights of others; and

	•	the other factors described under the caption “Risk Factors.”

In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this prospectus might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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MARKET AND INDUSTRY DATA

Information in this prospectus about the equipment rental industry, including our general expectations concerning the industry and our market position and market share, is based on estimates prepared using data from various sources and on assumptions made by us. We believe data regarding the equipment rental industry and our market position and market share within this industry is inherently imprecise, but generally indicate our size and position and market share within this industry. In particular, we made certain determinations of market size and market share within our industry based on information from American Rental Association, Daniel Kaplan Associates, Global Insight, Manfredi & Associates and Rental Equipment Register, and our determinations of certain economic conditions in the markets we service are based on information from Maximus Advisors. Unless indicated otherwise, statements regarding our size, our market share and the size of our markets are based on rental revenues. Although we believe that the information provided by third parties is generally accurate, we have not independently verified any of that information. Third party industry publications and forecasts generally state that the information contained therein has been obtained from sources generally believed to be reliable. While we are not aware of any misstatements regarding any industry data presented in this prospectus, our estimates, in particular as they relate to our general expectations concerning the equipment rental industry, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the caption “Risk Factors.”

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RECENT TRANSACTIONS

The Recapitalization

Pursuant to the Recapitalization Agreement, on the Recapitalization Closing Date, the Sponsors acquired and currently own approximately 85% of RSC Holdings’ common stock. In connection with the Recapitalization, certain of our subsidiaries issued and sold the Notes as well as entered into the Senior ABL Facilities, comprised of a $250 million term facility and a $1,450 million revolving facility, and a $1,130 million Senior Term Facility. For a more detailed description of these facilities and our outstanding indebtedness thereunder, see “Description of Certain Indebtedness — Senior Credit Facilities.”

Recapitalization Agreement

The Recapitalization Agreement contains customary representations, warranties and covenants. The Recapitalization Agreement also provides that ACAB and ACF will indemnify RSC Holdings and its affiliates, including Ripplewood and Oak Hill, and their respective officers, directors, stockholders, employees, agents and representatives with respect to breaches of representations, warranties, covenants and certain other matters, in each case, subject to certain time limitations and dollar amounts, and that RSC Holdings will indemnify ACAB, ACF and their respective affiliates and their respective officers, directors, stockholders, employees, agents and representatives with respect to breaches of representations, warranties, covenants and certain other matters, in each case, subject to certain time limitations and dollar amounts. See “Business—Legal Proceedings.”

On the Recapitalization Closing Date, since RSC Holdings’ closing capital, as determined pursuant to a modified net worth formula set forth in the Recapitalization Agreement, was estimated to be more than the agreed-upon benchmark, the Recapitalization Purchase Price was increased by the amount of such excess over the benchmark, which was $34.4 million. This $34.4 million purchase price adjustment was paid to ACF on the Recapitalization Closing Date. The Recapitalization Agreement also provides for a post-closing adjustment to the Recapitalization Purchase Price based on a preliminary closing statement prepared by RSC Holdings and revised by ACAB. Since the calculation of the final adjustments showed that ACAB’s estimate of the net amount of adjustments to the Recapitalization Purchase Price was lower than the actual net amount of such adjustments by $18.0 million, on March 9, 2007, RSC paid such amount to ACAB. RSC Holdings, RSC, ACAB and ACF entered into a final closing statement agreement, dated March 9, 2007, in which (i) ACF acknowledged receipt of the $18.0 million payment, (ii) the parties thereto agreed that the preliminary closing statement, prepared by RSC Holdings and modified as a result of ACAB’s review, is the final closing statement and (iii) ACAB and ACF released RSC Holdings, RSC and their affiliates from any further liability under the purchase price adjustment mechanism contained in the Recapitalization Agreement. RSC obtained the funds necessary to make the purchase price adjustment payments by drawing on available borrowings under the Senior ABL Facilities.

Contingent Earn-Out Notes

RSC Holdings may be required to issue contingent earn-out notes pursuant to the Recapitalization Agreement if RSC achieves cumulative adjusted EBITDA (as defined in the Recapitalization Agreement) targets described below. If RSC’s cumulative adjusted EBITDA for the fiscal years ended December 31, 2006 and December 31, 2007 (the “2006-2007 EBITDA”) is at least $1.54 billion, then on April 1, 2008, RSC Holdings will issue to ACF a contingent earn-out note, in a principal amount equal to:

(i) $150 million if the 2006-2007 EBITDA is $1.662 billion or greater;

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(ii) If the 2006-2007 EBITDA is between $1.54 billion and $1.662 billion, an amount equal to (x) $150 million multiplied by (y) a fraction (A) the numerator of which is an amount equal to the 2006-2007 EBITDA minus $1.54 billion and (B) the denominator of which is $122 million; and

(iii) An additional amount, computed like interest (compounded semiannually) at the lesser of 11.5% per annum and the applicable federal rate plus 4.99% per annum from April 1, 2008 until the contingent earn-out note is issued, on the amount described in clause (i) or clause (ii) above, as applicable.

If RSC’s cumulative adjusted EBITDA for the fiscal year ended December 31, 2008 (the “2008 EBITDA”) is at least $880 million, then on April 1, 2009, RSC Holdings will issue to ACF a second contingent earn-out note, in a principal amount equal to:

(i) $250 million if the 2008 EBITDA is $1.015 billion or greater;

(ii) If the 2008 EBITDA is between $880 million and $1.015 billion, an amount equal to (x) $250 million multiplied by (y) a fraction (A) the numerator of which is an amount equal to the 2008 EBITDA minus $880 million and (B) the denominator of which is $135 million; and

(iii) An additional amount, computed like interest (compounded semiannually) at the lesser of 11.5% per annum and the applicable federal rate plus 4.99% per annum from April 1, 2009 until the contingent earn-out note is issued, on the amount described in clause (i) or clause (ii) above, as applicable.

Each contingent earn-out note will mature on the earlier of the date that is 11 years from issuance and the date that is six months after the final maturity date of the longest dated debt of RSC Holdings or any of its subsidiaries with a principal amount in excess of $100 million outstanding on the date of issuance of such contingent earn-out note. Interest will be added to principal semi-annually and will be payable at maturity. The interest rate will be compounded semiannually and equal to the lesser of 11.5% per annum and the applicable federal rate plus 4.99% per annum.

If, after an underwritten initial public offering of RSC Holdings’s common equity, certain persons associated with the Sponsors cease to control 40% in the aggregate of the number of shares of common equity owned by such persons immediately after the closing of the Recapitalization (a “Loss of Control”), RSC Holdings must make semi-annual payments of current period interest on the contingent earn-out notes (x) first, on the longest-dated contingent earn-out notes then outstanding (pro rata among all such notes) if and to the extent 50% of available cash (as defined in the Recapitalization Agreement) on the date of such payments is sufficient to make such payments, and (y) second, on the other contingent earn-out notes then outstanding (pro rata among all such notes) if and to the extent the payments made pursuant to the foregoing clause (x) are less than 50% of available cash on such dates. Any amount of such current period interest that is not so paid on any such date shall be added to the principal. In addition, RSC Holdings will cause its subsidiaries to refrain from taking certain actions that will impair RSC Holdings’s ability to pay current interest on the contingent earn-out notes. Furthermore, following a Loss of Control, additional interest under the notes shall accrue at the semiannual interest rate that, with semiannual compounding, produces an incremental annual yield to maturity of 1.50%. The offering and sale of our common stock pursuant to this prospectus will not result in a Loss of Control.

Generally, if RSC Holdings receives after the Recapitalization Closing Date proceeds of certain dividends, redemptions or other distributions (“Qualifying Proceeds”) in excess of $150,000,000, we are required to use 50% of such excess Qualifying Proceeds, less the aggregate amount of all optional prepayments made under all of our contingent earn-out notes (the “Aggregate Optional Prepayment”), to prepay any outstanding contingent earn-out

32

notes. However, if, after the Recapitalization Closing Date but prior to the date on which a contingent earn-out note is first issued (the “Issue Date”), we have received Qualifying Proceeds (“Pre-Issue Proceeds”) in excess of $150,000,000, we are required to use 100% of any Qualifying Proceeds received after the Issue Date (“Post-Issue Proceeds”) to prepay any outstanding notes until we have prepaid an amount equal to (x) the amount by which the Pre-Issue Proceeds exceed $150,000,000 minus (y) the Aggregate Optional Prepayment. Thereafter, we are required to use 50% of all Post-Issue Proceeds, less the Aggregate Optional Prepayments, to prepay the notes.

Recent Sale of Unregistered Securities

On or around November 17, 2006, RSC Holdings offered certain of its officers and employees, or trusts of which its officers or employees were beneficiaries, the opportunity to purchase up to 987,022 shares of RSC Holdings common stock for an aggregate offering price of up to approximately $6,440,000. The officers, employees and trusts purchased all 987,022 shares that were offered for a total purchase price of approximately $6,440,000. The purchases of the shares closed as of December 4, 2006 and December 19, 2006. All of the participating officers, employees and trusts have granted the Sponsors an irrevocable proxy to vote or act by unanimous written consent with respect to their purchased shares. Accordingly, the Sponsors have the sole authority to vote the shares held by the officers, employees and trusts.

As of the closings of their respective purchases, the officers and employees were granted stock options to purchase up to, in the aggregate, 4,395,921 additional shares of RSC Holdings common stock in the future. The stock options are subject to vesting as follows: one third of the options will vest over a five-year time period, subject to the officer’s or employee’s continued employment with RSC Holdings or its subsidiaries, and two thirds of the options will vest, or fail to vest, based on RSC Holdings’ financial performance. All stock options have an exercise price of $6.52.

33

USE OF PROCEEDS

We estimate that our net proceeds from the sale of 12,500,000 shares of our common stock being offered by us pursuant to this prospectus at an assumed initial public offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and estimated offering expenses, will be approximately $278.8 million. A $1.00 increase (decrease) in the assumed initial public offering price of $24.00 per share would increase (decrease) the net proceeds to us from this offering by $11.8 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us. We will not receive any proceeds from the sale of 8,333,333 shares of our common stock being offered by the selling stockholders pursuant to this prospectus or the additional shares that would be sold by the selling stockholders if the underwriters exercised their overallotment option.

We intend to use the net proceeds to us from the sale by us of our common stock to (i) repay $253.7 million of the Senior Term Facility, (ii) pay a $5.1 million prepayment penalty related to our $253.7 million repayment under the Senior Term Facility and (iii) pay a termination fee of $20.0 million related to the termination of the monitoring agreement with the remainder of the proceeds, if any, to be used for general corporate purposes. For additional information regarding the monitoring agreement, see “Certain Relationships and Related Party Transactions — Monitoring, Transaction and Indemnification Agreement.”

The Senior Term Facility was entered into in connection with the Recapitalization and consists of a term loan facility in an aggregate principal amount of up to $1,130 million that matures on November 27, 2013. On the Recapitalization Closing Date, we borrowed $1,130 million under the Senior Term Facility. At our election, the interest rates under the Senior Term Facility are based on a fluctuating interest rate measured by reference to either (1) an adjusted London inter-bank offered rate, or LIBOR, plus a borrowing margin or (2) an alternate base rate plus a borrowing margin. Borrowings under the Senior Term Facility, in addition to borrowings under the Senior ABL Facilities and the Indenture and the equity investment by the Sponsors, were used by us to pay ACF the cash consideration for the Recapitalization and to pay certain related transaction fees and expenses. For additional information regarding the Senior Term Facility, see “Description of Certain Indebtedness — Senior Term Facility.” As of March 31, 2007, borrowings under the Senior Term Facility bore interest at 8.85%.

34

DIVIDEND POLICY

We do not expect to pay dividends on our common stock for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used for the operation and growth of our business. Our ability to pay dividends to holders of our common stock is limited as a practical matter by the Senior Credit Facilities and the indenture governing the Notes, insofar as we may seek to pay dividends out of funds made available to us, because our subsidiaries’ debt facilities directly or indirectly restrict our subsidiaries’ ability to pay dividends or make loans to us. In addition, if our contingent earn-out notes are issued, our ability to pay dividends will be restricted by our obligation to make certain mandatory prepayments to the holders of such notes. See “Recent Transactions—Recapitalization Agreement—Contingent Earn-Out Notes.” Any future determination to pay dividends on our common stock is subject to the discretion of our Board and will depend upon various factors, including our results of operations, financial condition, liquidity requirements, restrictions that may be imposed by applicable law and our contracts, and other factors deemed relevant by our Board.

35

CAPITALIZATION

The following table sets forth as of March 31, 2007, on a consolidated basis:


	•	Our actual capitalization; and

	•	Our pro forma as adjusted capitalization that gives effect to the sale of 12,500,000 shares of our common stock in this offering at an assumed initial public offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom.

You should read the following table in conjunction with the information in this prospectus under the captions “Unaudited Pro Forma Condensed Consolidated Financial Statements,” “Selected Historical Consolidated Financial Data,” “Description of Certain Indebtedness” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and with the unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus. For a description of the debt facilities and instruments referred to below, see “Recent Transactions—The Recapitalization,” “Description of Certain Indebtedness” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”


	As of March 31, 2007
				Pro Forma
	Actual			as adjusted for this Offering
	(in millions)

Cash	$	1.5		$	1.5

Debt(1)	$	3,008.8		$	2,755.1
Stockholders’ equity (deficit) Preferred Stock, no par value, 500,000 shares authorized; no shares issued and outstanding		—			—
Common Stock, no par value, 300,000,000 shares authorized; (i) Actual—90,647,591 shares issued and outstanding and (ii) Pro forma—103,147,591 shares issued and outstanding		561.9			840.7
Accumulated deficit		(979.6	)		(998.3	)
Accumulated other comprehensive income		9.5			9.5

Total stockholders’ equity (deficit)		(408.2	)		(148.1	)

Total capitalization	$	2,600.6		$	2,607.0


(1)		Debt consists of the Notes; borrowings under our Senior Term Facility; borrowings under our Senior ABL Facilities; and capital lease obligations. For a description of these facilities, see “Description of Certain Indebtedness” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness Following the Recapitalization.”

36

DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price of the shares of our common stock and the net tangible book value per share after this offering.

Net tangible book value (deficit) per share represents the amount of total book value of tangible assets less total liabilities, divided by the number of shares of common stock then outstanding. Our net tangible book deficit as of March 31, 2007 was $1,333.9 million, or $14.71 per share, based on the 90,647,591 shares of common stock outstanding as of such date. After giving effect to our sale of 12,500,000 shares in this offering at an assumed initial public offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and estimated offering expenses, our pro forma net tangible book deficit as of March 31, 2007 would have been $1,073.7 million, or $10.41 per share. This represents an immediate increase in the pro forma net tangible book value of $4.30 per share to existing stockholders and an immediate and substantial dilution of $34.41 per share to new investors purchasing shares in this offering. If the initial offering price is higher or lower, the dilution to new investors purchasing our common stock will be greater or less, respectively. The following table illustrates this dilution:


			Per Share

Assumed initial public offering price			$	24.00
Net tangible book value (deficit) as of March 31, 2007	(14.71	)
Increase attributable to this offering	4.30

Pro forma net tangible book value (deficit) after this offering				(10.41	)

Dilution in net tangible book value to new investors			$	34.41

The following table summarizes as of March 31, 2007 the total number of shares of common stock purchased from us, the total consideration paid to us, and the weighted average price per share paid by existing stockholders and by new investors purchasing shares from us in this offering at our assumed initial public offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and before deducting underwriting discounts and estimated offering expenses payable by us.


						Total
	Shares Acquired					Consideration					Weighted
	(in thousands)					(in thousands)					Average Price
	Number		Percent			Amount		Percent			Per Share

Existing stockholders		95,044		88	%	$	620,125		67	%	$	6.52
New investors		12,500		12			300,000		33			24.00

Total		107,544		100	%	$	920,125		100	%		8.56

The number of shares held by the existing stockholders, which includes shares being sold by the selling stockholders, will be further reduced to the extent the underwriters exercise their overallotment option to purchase additional shares from such selling stockholders. If the underwriters fully exercise their overallotment option, the existing stockholders will own a total of 83,585,178 shares, or approximately 78% of our total outstanding shares.

The foregoing discussion and tables give effect to the issuance of common stock upon exercise of all outstanding stock options held by directors and officers as of March 31, 2007. As of March 31, 2007, there were stock options outstanding to purchase a total of 4,395,921 shares of our common stock at a weighted average exercise price of $6.52 per share.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

37

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements have been derived from our historical audited consolidated financial statements and our historical unaudited condensed consolidated financial statements included elsewhere in this prospectus.

The unaudited pro forma as adjusted consolidated statement of income below for the year ended December 31, 2006 gives effect to (i) the Recapitalization and the use of the net proceeds therefrom and (ii) the sale of 12,500,000 shares of common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of net proceeds therefrom, as if such transactions had occurred on January 1, 2006. The unaudited pro forma as adjusted consolidated balance sheet below as of December 31, 2006 reflects adjustments to our historical financial data to give effect to the sale of common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net sale proceeds therefrom, as if such transaction had occurred on December 31, 2006. The unaudited pro forma as adjusted consolidated statement of income below for the three months ended March 31, 2007 gives effect to the sale of 12,500,000 shares of common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom, as if such transaction had occurred on January 1, 2007. The unaudited pro forma as adjusted consolidated balance sheet below as of March 31, 2007 reflects adjustments to our historical financial data to give effect to the sale of common stock offered by this prospectus at an assumed initial offering price of $24.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and the use of the net proceeds therefrom, as if such transaction had occurred on March 31, 2007.

The unaudited pro forma condensed consolidated financial statements include adjustments directly attributable to the Recapitalization and the use of the net proceeds therefrom and the sale of common stock offered by this prospectus and the use of the net sale proceeds therefrom that are expected to have a continuing impact on us. The pro forma adjustments are described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. The unaudited pro forma condensed consolidated financial statements do not purport to represent our results of operations or financial condition had the Recapitalization and the use of the net proceeds therefrom and the sale of common stock offered by this prospectus and the use of the net sale proceeds therefrom actually occurred as of such dates or of the results that we would have achieved after the Recapitalization and the use of the net proceeds therefrom and the sale of common stock offered by this prospectus and the use of the net sale proceeds therefrom.

The Recapitalization has been accounted for as a leveraged recapitalization whereby our assets and liabilities remain at historical values and are not revalued and recorded at their fair value at the time of the Recapitalization.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the information included in this prospectus under the captions “Use of Proceeds,” “Capitalization,” “Selected Historical Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with our historical consolidated financial statements and the related notes thereto.

38

Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of December 31, 2006
(in thousands, except per share data)


				Pro Forma
				Adjustments
				for the
				Offering and			Pro
				Use of			Forma
	Historical(1)			Proceeds			as Adjusted

Balance sheet
Assets
Cash and cash equivalents	$	46,188		$	—		$	46,188
Accounts receivable, net		268,383			—			268,383
Inventory		18,489			—			18,489
Rental equipment, net		1,738,670			—			1,738,670
Property and equipment, net		170,192			—			170,192
Goodwill		925,621			—			925,621
Deferred financing costs		67,915			(5,451	)(2)		62,464
Other assets		90,498			—			90,498

Total assets	$	3,325,956		$	(5,451	)	$	3,320,505

Liabilities
Accounts payable	$	296,086						296,086
Accrued expenses and other liabilities		163,996			(11,905	)(3)		152,091
Debt		3,006,426			(253,725	)(4)		2,752,701
Deferred income taxes		294,081			—			294,081

Total liabilities		3,760,589			(265,630	)		3,494,959

Stockholders’ equity (deficit)
Preferred stock, no par value, 500,000 shares authorized; no shares issued and outstanding		—			—			—
Common stock, no par value, 300,000,000 shares authorized; (i) Actual—90,647,591 shares issued and outstanding and (ii) Pro forma—103,147,591 shares issued and outstanding		556,482			278,800			835,282
Accumulated deficit		(999,899	)		(12,200	)(5)		(1,018,520	)
					(3,096	)(6)
					(3,325	)(7)
Accumulated other comprehensive income		8,784			—			8,784

Total stockholders’ equity (deficit)		(434,633	)		260,179			(174,454	)

Total liabilities and stockholders’ equity (deficit)	$	3,325,956		$	(5,451	)	$	3,320,505

See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

39

Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Year Ended December 31, 2006
(in thousands, except per share data)


				Pro Forma
				Adjustments						Adjustments
				for the						for the			Pro
				Recapitalization						Offering			Forma
				and Use of			Pro Forma			and Use of			as
	Historical			Proceeds(1)			Subtotal			Proceeds			Adjusted

Statement of income
Revenues:
Equipment rental revenue	$	1,368,712		$	—		$	1,368,712		$	—		$	1,368,712
Sale of merchandise		92,524			—			92,524			—			92,524
Sale of used rental equipment		191,652			—			191,652			—			191,652

Total revenues		1,652,888			—			1,652,888			—			1,652,888

Cost of revenues:
Cost of equipment rentals, excluding depreciation		591,340			—			591,340			—			591,340
Depreciation—rental equipment		253,379			—			253,379			—			253,379
Cost of sales of merchandise		57,636			—			57,636			—			57,636
Cost of rental equipment sales		145,425			—			145,425			—			145,425

Total cost of revenues		1,047,780			—			1,047,780			—			1,047,780

Gross profit		605,108			—			605,108			—			605,108
Operating expenses:
Selling, general, and administrative		135,526			5,441	(8)		140,967			(6,000	)(8)		134,967
Depreciation and amortization—non-rental		38,783			—			38,783			—			38,783
Recapitalization expenses		10,277			(10,277	)(9)		—			—			—

Total operating expenses		184,586			(4,836	)		179,750			(6,000	)		173,750

Operating income		420,522			4,836			425,358			6,000			431,358
Interest expense		116,370			137,907	(10)		254,277			(22,894	)(10)		231,383
Other income, net		(311	)		—			(311	)		—			(311	)

Income before provision for income taxes		304,463			(133,071	)		171,392			28,894			200,286
Provision for income taxes		117,941			(51,548	)(11)		66,393			11,193	(11)		77,586

Net income	$	186,522		$	(81,523	)	$	104,999		$	17,701		$	122,700

Preferred dividends		(7,997	)		7,997			—			—			—

Net income available for common stockholders	$	178,525		$	(73,526	)	$	104,999		$	17,701		$	122,700

Weighted average shares outstanding used in computing net income per common share:
Basic and diluted(12)(13)		307,845						89,733						100,305	(14)

Net income per common share:
Basic and diluted(12)(13)	$	0.58					$	1.17					$	1.22	(14)

See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

40

Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2007
(in thousands, except per share data)


				Pro Forma
				Adjustments
				for the
				Offering and			Pro
				Use of			Forma
	Historical(1)			Proceeds			as Adjusted

Balance sheet
Assets
Cash and cash equivalents	$	1,481		$	—		$	1,481
Accounts receivable, net		259,275			—			259,275
Inventory		18,130			—			18,130
Rental equipment, net		1,742,852			—			1,742,852
Property and equipment, net		181,570			—			181,570
Goodwill		925,621			—			925,621
Deferred financing costs		65,864			(5,451	)(2)		60,413
Other assets		85,771			—			85,771

Total assets	$	3,280,564		$	(5,451	)	$	3,275,113

Liabilities
Accounts payable	$	192,411						192,411
Accrued expenses and other liabilities		189,192			(11,905	)(3)		177,287
Debt		3,008,828			(253,725	)(4)		2,755,103
Deferred income taxes		298,374			—			298,374

Total liabilities		3,688,805			(265,630	)		3,423,175

Stockholders’ equity (deficit)
Preferred stock, no par value, 500,000 shares authorized; no shares issued and outstanding		—			—			—
Common stock, no par value, 300,000,000 shares authorized; (i) Actual—90,647,591 shares issued and outstanding and (ii) Pro forma—103,147,591 shares issued and outstanding		561,918			278,800			840,718
Accumulated deficit		(979,656	)		(12,200	)(5)		(998,277	)
					(3,096	)(6)
					(3,325	)(7)
Accumulated other comprehensive income		9,497			—			9,497

Total stockholders’ equity (deficit)		(408,241	)		260,179			(148,062	)

Total liabilities and stockholders’ equity (deficit)	$	3,280,564		$	(5,451	)	$	3,275,113

See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

41

Unaudited Pro Forma Condensed Consolidated Statements of Income
For the Three Months Ended March 31, 2007
(in thousands, except per share data)


			Pro Forma
			Adjustments
			for the			Pro
			Offering			Forma
			and Use of			as
	Historical		Proceeds			Adjusted

Statement of income
Revenues:
Equipment rental revenue	$	347,975	$	—		$	347,975
Sale of merchandise		20,598		—			20,598
Sale of used rental equipment		37,774		—			37,774

Total revenues		406,347		—			406,347

Cost of revenues:
Cost of equipment rentals, excluding depreciation		156,009		—			156,009
Depreciation—rental equipment		68,551		—			68,551
Cost of sales of merchandise		12,352		—			12,352
Cost of rental equipment sales		26,943		—			26,943

Total cost of revenues		263,855		—			263,855

Gross profit		142,492		—			142,492
Operating expenses:
Selling, general, and administrative		34,089		(1,500	)(8)		32,589
Depreciation and amortization—non-rental		10,856		—			10,856

Total operating expenses		44,945		(1,500	)		43,445

Operating income		97,547		1,500			99,047
Interest expense		64,200		(5,723	)(10)		58,477
Other income, net		89		—			89

Income before provision for income taxes		33,258		7,223			40,481
Provision for income taxes		13,015		2,817	(11)		15,832

Net income	$	20,243	$	4,406		$	24,649

Weighted average shares outstanding used in computing net income per common share:
Basic(12)(13)		90,648					101,219	(14)

Diluted(12)(13)		92,188					102,760	(14)

Net income per common share:
Basic and diluted(12)(13)	$	0.22				$	0.24	(14)

See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

42

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(1) The Recapitalization was consummated on November 27, 2006. The Recapitalization was accomplished through (a) the repurchase by RSC Holdings of a portion of its issued and outstanding common stock from ACF for (i) $3,345 million, as adjusted on the Recapitalization Closing Date and on March 9, 2007 and (ii) the right to receive up to $400 million aggregate principal amount of contingent earn-out notes by ACF and (b) the issuance of a portion of the repurchased shares in return for a $500 million cash equity investment in RSC Holdings by the Sponsors for shares of common stock. As a result of the Recapitalization, Ripplewood and Oak Hill each owned 42.735% of RSC Holdings’ issued and outstanding capital stock and ACF owned 14.53% of RSC Holdings’ issued and outstanding capital stock. Historical balance sheet data reflects the impact of the Recapitalization and the use of proceeds therefrom.

(2) The pro forma adjustment represents the reduction in deferred financing cost resulting from repayment of debt.

(3) The pro forma adjustment represents the change in the tax payable for non-recurring charges directly attributable to the offering (see notes (5), (6) and (7) below) at an effective tax rate of 39%.

(4) The pro forma adjustment represents the repayment of $253.7 million under the Senior Term Facility.

(5) The pro forma adjustment reflects the payment of $20 million in connection with the termination of the monitoring agreement, net of taxes.

(6) The pro forma adjustment reflects a 2% prepayment penalty of $5.1 million related to our $253.7 million repayment under the Senior Term Facility, net of taxes.

(7) The pro forma adjustment reflects the corresponding expense associated with the reduction in deferred financing cost resulting from repayment of debt, net of taxes.

(8) The pro forma adjustment for the year ended December 31, 2006 reflects annual management fees of $6 million net of $0.6 million actually paid in the year ended December 31, 2006. The pro forma adjustment for the three months ended March 31, 2007 reflects management fees of $1.5 million. The management fee is removed from the pro forma as adjusted amounts as the management fee will be terminated.

(9) The pro forma adjustment reflects the elimination of one-time fees and expenses related to the consummation of the Recapitalization and not otherwise amortized or applied to stockholders’ equity.

(10) The pro forma adjustments to interest expense reflect the repayment of existing debt and the issuance of $620 million of Senior Notes, $1,124 million of indebtedness under the Senior ABL Facilities and $1,130 million of indebtedness under the Senior Term Facility as well as the repayment by us of $253.7 million under the Senior Term Facility. The adjustments also reflect payment of the commitment fee related to the unfunded portion of the Senior ABL Facilities and amortization of debt financing costs. Our outstanding capital lease obligations remained unchanged as a result of the Recapitalization. The following table sets forth debt we incurred in connection with the Recapitalization, the interest associated with the relief of intercompany debt with affiliates of ACAB, as well as the additional amortization of deferred financing fees incurred in connection therewith.

43


											Pro Forma
	Loan			Indexed		Supplemental		Total			Adjustments to
	Value			Rate(a)		Rate		Rate			Interest
	(dollars in thousands)
Recapitalization debt
Senior ABL Facilities	$	1,124,000			5.36%		1.75%		7.11%		$	71,955
Senior ABL Revolving Credit Facility (unused portion)		576,000							0.25%			1,440
Senior Term Facility		1,130,000			5.36%		3.50%		8.86%			90,286
Senior Notes		620,000							9.50%			53,174
Interest associated with the relief of intercompany debt		(1,190,947	)(b)						7.91%	(b)		(86,354	)
Additional amortization of deferred financing fees												7,406

Total adjustment to pro forma financial statements											$	137,907

Extinguishment of debt from net proceeds of offering	$	(253,725	)		5.36%		3.50%		8.86%		$	(22,481	)
Adjustment to amortization of deferred financing costs												(413	)

Total annual adjustment for offering											$	(22,894	)

Total quarterly adjustment for offering											$	(5,723	)


(a)	Variable rates are assumed to be December 31, 2006 three-month LIBOR for the pro forma periods. The March 31, 2007 three-month LIBOR did not differ materially from the December 31, 2006 three-month LIBOR.


(b)	Intercompany indebtedness functioned as a revolving credit facility, and the interest rate applicable to all intercompany indebtedness was set at the Prime Rate in effect when such indebtedness was incurred. As such, the loan value and the total rate value included in the table above reflect the average loan value and the average total rate, respectively, for the period presented.

A 0.25% change in the variable interest rate on our indebtedness would have caused a $5.0 million and $1.25 million increase or decrease in pro forma interest expense for the year ended December 31, 2006 and the three months ended March 31, 2007, respectively.

(11) Adjustment to tax provision based on pro forma income.

(12) Share amounts reflect a 100 for 1 stock split effected on November 27, 2006 and a 37.435 for 1 stock split to be effected in connection with this offering.

(13) Basic net income per common share has been computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share has been computed using the weighted average number of shares of common stock outstanding during the period, increased to give effect to the offering of any shares of common stock. Additionally, for purposes of calculating basic and diluted net income per common share, net income has been adjusted for preferred stock dividends. As of December 31, 2006, there were stock options to purchase 4,395,921 additional shares that were excluded from the calculations of diluted income per common share and pro forma net income per common share as those stock options were anti-dilutive. However, these stock options were included in the calculations of diluted income per common share and pro forma net income per common share for the three months ended March 31, 2007 as they were dilutive.

(14) Includes 10,571,875 shares of common stock offered by us, the proceeds of which will be used to repay a portion of the Senior Term Facility. Additionally, there are 1,928,125 shares of common stock offered by us that are not included in the pro forma earnings per share calculation as their proceeds will be used by us to pay offering related expenses. Pro forma basic and diluted earnings per share is computed by dividing pro forma earnings by the pro forma weighted average number of shares outstanding for the period.

44

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table presents selected consolidated financial information and other operational data for our business. The selected consolidated statements of income data presented below for the years ended December 31, 2004, 2005 and 2006 and the balance sheet data as of December 31, 2005 and 2006, have been derived from our audited financial statements included in this prospectus. The selected consolidated statement of income data for the year ended December 31, 2003 and the balance sheet data as of December 31, 2004 have been derived from our audited financial statements not included in this prospectus. The consolidated balance sheet data at December 31, 2003 have been derived from our unaudited consolidated balance sheet for that period. The selected consolidated statements of income data for the three months ended March 31, 2006 and 2007 and the selected consolidated balance sheet data as of March 31, 2007 have been derived from our unaudited condensed consolidated financial statements and the related notes thereto included in this prospectus.

Our financial statements for the year ended December 31, 2001 were audited by Arthur Andersen LLP. Our current auditors, KPMG LLP, have been unable to obtain access to Arthur Andersen LLP’s work papers for this period. In addition, KPMG LLP was not able to audit our financial statements for the year ended December 31, 2002 because an opening audited balance sheet could not be verified and relied on, due to Arthur Andersen LLP having conducted the 2001 audit of our financial statements. As such, producing audited financial statements for the year ended December 31, 2002 would be unduly burdensome and expensive. Consequently, we have not included selected financial data below for that period.

You should read the following information in conjunction with the section of this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our unaudited and audited consolidated financial statements and related notes beginning on page F-1 of this prospectus.

45


	Historical
									Three Months Ended
	Year Ended December 31,								March 31,
	2003		2004		2005		2006		2006		2007
	(in thousands, except per share data)
Statements of income data:
Revenues:
Equipment rental revenue	$	899,203	$	984,517	$	1,140,329	$	1,368,712	$	302,124	$	347,975
Sale of merchandise		178,374		162,720		102,894		92,524		24,651		20,598
Sale of used rental equipment		140,424		181,486		217,534		191,652		59,116		37,774

Total revenues		1,218,001		1,328,723		1,460,757		1,652,888		385,891		406,347

Cost of revenues:
Cost of equipment rentals, excluding depreciation		494,056		492,323		527,208		591,340		140,456		156,009
Depreciation—rental equipment		187,859		192,323		212,325		253,379		56,599		68,551
Cost of sales of merchandise		138,056		122,873		69,914		57,636		15,505		12,352
Cost of rental equipment sales		110,458		147,131		173,276		145,425		45,022		26,943

Total cost of revenues		930,429		954,650		982,723		1,047,780		257,582		263,855

Gross profit		287,572		374,073		478,034		605,108		128,309		142,492
Other operating expenses:
Selling, general, and administrative		128,044		118,130		122,281		135,526		31,846		34,089
Depreciation and amortization—non-rental		32,320

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Delaware	7359	22-1669012
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)
	6929 E. Greenway Parkway Scottsdale, AZ 85254 (480) 905-3300


	Per Share	Total

Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to RSC Holdings	$	$
Proceeds, before expenses, to the selling stockholders	$	$


Matthew E. Kaplan, Esq. Jeffrey J. Rosen, Esq. Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 (212) 909-6000		William B. Gannett, Esq. Cahill Gordon & Reindel LLP Eighty Pine Street New York, New York 10005 (212) 701-3000


Deutsche Bank Securities		Morgan Stanley		Lehman Brothers

RSC Holdings Inc · S-1/A · On 5/10/07

Filed On 5/10/07 9:31pm ET · SEC File 333-140644 · Accession Number 950123-7-7239

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