Acquisitions (Tables)

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

The following table summarizes the net book values of the assets acquired and liabilities assumed as of the acquisition date. The initial accounting for the acquisition is incomplete, principally related to finalizing 1) the measurement of the acquired net working capital, 2) the valuation of the acquired equipment (inclusive of the completion of our usual and customary procedures to validate the existence of the acquired rental fleet) and intangible assets, 3) the impact of lease accounting, 4) the valuation of the contingent consideration noted above and 5) the associated income tax considerations. All amounts below could change, potentially materially, as there is significant additional information that we must obtain to finalize the valuations of the assets acquired and liabilities assumed. During the three months ended June 30, 2024, we recognized measurement period adjustments primarily to establish preliminary values for intangibles assets, which also resulted in a reduction in goodwill from the previously reported preliminary amount.

Accounts receivable (1)	$	99
Inventory	8
Rental equipment	143
Property and equipment	32
Intangible assets (customer relationships) (2)	150
Operating lease right-of-use assets	6
Other assets	17
Total identifiable assets acquired	455
Accounts payable, accrued expenses and other liabilities	(103)
Operating lease liabilities	(6)
Total liabilities assumed	(109)
Net identifiable assets acquired	346
Goodwill (3)	810
Net assets acquired	$	1,156

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(1)The estimated fair value of accounts receivables acquired was $99, and the gross contractual amount was $102. We estimated that $3 would be uncollectible.

(2)The customer relationships are being amortized over a 6 year life.

(3)All of the goodwill was assigned to our specialty segment. As noted above, we have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed. As such, we expect that goodwill will change from the amount noted above. Once finalized, we expect that the goodwill that results from the acquisition will be

primarily reflective of Yak's going-concern value, the value of Yak's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes (because the acquired Yak entities were sold as disregarded entities, the acquisition was treated as an asset purchase for income tax purposes, which resulted in the goodwill that is deductible for income tax purposes equaling the total acquired goodwill).

Summary of Business Acquisition, Pro Forma Information

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

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2023		2024		2023
United Rentals historic revenue (1)	$	3,554	$	7,258	$	6,839
Yak historic revenue (2)	93		97		184
Pro forma revenue (1)	3,647		7,355		7,023
United Rentals historic pretax income	772		1,530		1,366
Yak historic pretax (loss) income	(9)		10		77
Combined pretax income	763		1,540		1,443
Pro forma adjustments to combined pretax income:
Impact of fair value mark-ups/useful life changes on depreciation (3)	(2)		(1)		(4)
Intangible asset amortization (4)	(4)		(2)		(9)
Interest expense (5)	(17)		(14)		(34)
Elimination of historic interest (6)	16		11		39
Elimination of refinancing transactions (7)	1		(40)		(101)
Transaction bonuses and other (8)	1		22		2
Pro forma pretax income	$	758	$	1,516	$	1,336

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(1)United Rentals historic revenue for the six months ended June 30, 2024 includes the post-acquisition revenue attributable to the acquired Yak locations of $102 that is discussed above. Pro forma revenue for the six months ended June 30, 2024 includes $199 of pre/post-acquisition revenue from the acquired Yak locations, comprised of $97 of historic Yak revenue and $102 of post-acquisition revenue attributable to the acquired Yak locations.

(2)Yak revenue reflects only the historical results of the entities being acquired, and includes an estimate of revenue from mat rentals to a commonly controlled entity that were eliminated in consolidation by Yak.

(3)Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups of the equipment acquired in the Yak acquisition. There were no material changes to the useful lives and salvage values of the acquired equipment.

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

(5)As discussed above, the acquisition and related fees and expenses were funded through the issuance of senior notes and drawings on our ABL facility. Interest expense was adjusted to reflect interest on the debt used to finance the acquisition.

(6)Historic interest on debt that is not part of the combined entity was eliminated.

(7)Reflects gains on the extinguishment of debt, net of refinancing transaction expenses.

(8)Primarily reflects bonuses paid in connection with the acquisition.