Acquisitions (Tables)

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of assets acquired and liabilities assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed.

Cash and cash equivalents	$	13
Accounts receivable (1)	44
Inventory	36
Rental equipment	682
Property and equipment	42
Intangibles (2)	123
Operating lease right-of-use assets	59
Other assets	23
Total identifiable assets acquired	1,022
Current liabilities	(92)
Deferred taxes	(118)
Operating lease liabilities	(44)
Total liabilities assumed	(254)
Net identifiable assets acquired	768
Goodwill (3)	264
Net assets acquired	$	1,032

(1)The fair value of accounts receivables acquired was $44, and the gross contractual amount was $50. We estimated that $6 would be uncollectible.

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

	Fair value		Life (years)
Customer relationships	$	116	7
Trade names and associated trademarks	7		5
Total	$	123

(3)All of the goodwill was assigned to our specialty segment. The level of goodwill that resulted from the acquisition is primarily reflective of General Finance's going-concern value, the value of General Finance's assembled

workforce and new customer relationships expected to arise from the acquisition. $28 of goodwill is expected to be deductible for income tax purposes.

Finite-lived and indefinite-lived intangible assets acquired as part of business combination

The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:

	Fair value		Life (years)
Customer relationships	$	116	7
Trade names and associated trademarks	7		5
Total	$	123

Summary of business acquisition, pro forma information

The table below presents unaudited pro forma consolidated income statement information as if General Finance had been included in our consolidated results for the entire period reflected:

	Three Months Ended			Six Months Ended
	June 30,			June 30,
		2021		2021
United Rentals historic revenues		$	2,287	$	4,344
General Finance historic revenues		55		144
Pro forma revenues		2,342		4,488
United Rentals historic pretax income		377		652
General Finance historic pretax (loss) income		(6)		9
Combined pretax income		371		661
Pro forma adjustments to combined pretax income:
Impact of fair value mark-ups/useful life changes on depreciation (1)		(4)		(11)
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2)		(2)		(6)
Intangible asset amortization (3)		(6)		(12)
Interest expense (4)		(3)		(6)
Elimination of historic interest (5)		18		23
Elimination of merger related costs (6)		12		12
Elimination of changes in the valuation of bifurcated derivatives in convertible notes (7)		(12)		(16)
Pro forma pretax income		$	374	$	645

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(1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the General Finance acquisition.

(2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the General Finance acquisition.

(3) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets.

(4) As discussed above, we funded the General Finance acquisition using drawings on our ABL facility. Interest expense was adjusted to reflect interest on the ABL facility borrowings.

(5) Historic interest on debt that is not part of the combined entity was eliminated. The adjustment for the three and six months ended June 30, 2021 includes a debt redemption loss of $12.

(6) Merger related costs primarily comprised of financial and legal advisory fees associated with the General Finance acquisition were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. The adjustments for the three and six months ended June 30, 2021 include $9 of merger related costs recognized by General Finance prior to the acquisition.(7) General Finance historically recognized changes in the valuation of bifurcated derivatives in convertible notes in its statements of operations. These historic changes were eliminated because the bifurcated derivatives are not part of the combined entity.