Acquisitions (Tables)

6 Months Ended

Jun. 30, 2012

The acquisition date fair value of the consideration transferred of $2.6 billion consisted of the following:



Cash consideration	$	1,161
Stock consideration (30 million shares valued based on the URI acquisition date stock price)	1,396
Share-based compensation awards (1)	29
Total purchase consideration	$	2,586

(1) This relates to RSC stock options and restricted stock units which were outstanding as of the acquisition date. Each RSC stock option was converted into an adjusted URI stock option to acquire a number of shares of URI common stock, determined by multiplying the number of shares of RSC common stock subject to the RSC stock option by the option exchange ratio (rounded down, if necessary, to a whole share of URI common stock). The “option exchange ratio” means the sum of (i) 0.2783 and (ii) the quotient determined by dividing $10.80 by the volume-weighted average of the closing sale prices of shares of URI common stock as reported on the NYSE composite transactions reporting system for each of the ten consecutive trading days ending with the acquisition date. The option exchange ratio was 0.5161. The exercise price per share of URI common stock subject to the adjusted URI option is equal to the per share exercise price of such RSC stock option divided by the option exchange ratio (rounded up, if necessary, to the nearest whole cent). Each RSC restricted stock unit (other than an award held by a member of the RSC board who was not also an employee or officer of RSC at such time) was converted into an adjusted URI restricted stock unit in an amount determined by multiplying the number of shares of RSC common stock subject to the RSC restricted stock unit by the option exchange ratio. The portion of the URI replacement awards that has been included in the purchase consideration was calculated as $29 and is based on the vesting which occurred prior to the acquisition date.

Schedule of Purchase Price Allocation

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The purchase price allocations for these assets and liabilities are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period.



Accounts receivable, net of allowance for doubtful accounts (1)	$	238
Inventory	19
Deferred taxes	15
Rental equipment, net	2,011
Property and equipment, net	47
Intangibles (2)	1,239
Other assets	58
Total identifiable assets acquired	3,627
Short-term debt and current maturities of long-term debt (3)	(1,586		)
Current liabilities	(405		)
Deferred taxes	(702		)
Long-term debt (3)	(992		)
Other long-term liabilities	(13		)
Total liabilities assumed	(3,698		)
Net identifiable assets acquired	(71		)
Goodwill (4)	2,657
Net assets acquired	$	2,586

(1)The fair value of accounts receivables acquired was $238, and the gross contractual amount was $251. We estimate that $13 will be uncollectible.

(2)The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on URI's preliminary purchase accounting assessments:



	Fair value		Life (years)
Customer relationships	$	1,110	15
Trade names, associated trademarks and other	81		5
Non-compete agreements	48		5
Total	$	1,239

(3)At the closing of the merger, URNA repaid RSC's senior ABL facility, 10 percent senior notes, and 9 ¹/₂ percent senior notes. The repaid debt is reflected as short-term above as it was paid on the acquisition date. The RSC debt reflected in our condensed consolidated balance sheet as of June 30, 2012 is discussed further in note 8 to the condensed consolidated financial statements. The debt in the table above includes $1,555 of the repaid RSC debt, and the fair values of the following debt assumed by URNA:



10 ¹/₄ percent Senior Notes	$	(225	)
8 ¹/₄ percent Senior Notes	(699		)
Capital leases	(99		)
Total assumed debt	$	(1,023	)

(4) All of the goodwill was assigned to our general rentals segment. The level of goodwill expected to result from the merger is primarily reflective of RSC's going-concern value, the value of RSC's assembled workforce, new customer relationships expected to arise from the merger, and operational synergies that we expect to achieve that would not be available to other market participants. None of the goodwill is expected to be deductible for income tax purposes.

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on URI's preliminary purchase accounting assessments:



	Fair value		Life (years)
Customer relationships	$	1,110	15
Trade names, associated trademarks and other	81		5
Non-compete agreements	48		5
Total	$	1,239

Schedule of Debt Acquired as Part of Business Combination

The debt in the table above includes $1,555 of the repaid RSC debt, and the fair values of the following debt assumed by URNA:



10 ¹/₄ percent Senior Notes	$	(225	)
8 ¹/₄ percent Senior Notes	(699		)
Capital leases	(99		)
Total assumed debt	$	(1,023	)

Pro Forma Information

The table below presents pro forma consolidated income statement information as if RSC had been included in our consolidated results for the entire periods reflected. The pro forma information has been prepared using the purchase method of accounting, giving effect to the RSC acquisition as if the acquisition had been completed on January 1, 2011 (“the pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the merger been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the merger, and also does not reflect additional revenue opportunities following the merger. The pro forma information includes adjustments to record the assets and liabilities of RSC at their respective fair values based on available information and to give effect to the financing for the acquisition and related transactions. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. The purchase price allocations for the assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of operations in future periods. We expect that the values assigned to the assets acquired and liabilities assumed will be finalized during the one-year measurement period following the acquisition date.



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2012		2011			2012		2011
Revenues	$	1,132	$	996		$	2,196	$	1,846
Income (loss) from continuing operations before provision (benefit) for income taxes	61		(42		)	47		(245		)

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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