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Acquisitions
 12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Acquisitions Acquisitions
NES Acquisition
In April 2017, we completed the acquisition of NES Rentals Holdings II, Inc. (“NES”). NES was a provider of rental equipment with 73 branches located throughout the eastern half of the U.S., and had approximately 1,100 employees and approximately $900 of rental assets at original equipment cost as of December 31, 2016. NES had annual revenues of approximately $369. The acquisition:
•Increased our density in strategically important markets, including the East Coast, Gulf States and the Midwest;
•Strengthened our relationships with local and strategic accounts in the construction and industrial sectors, which we expect will enhance cross-selling opportunities and drive revenue synergies; and
•Created meaningful opportunities for cost synergies in areas such as corporate overhead, operational efficiencies and purchasing.
The aggregate consideration paid to holders of NES common stock and options was approximately $960. The acquisition and related fees and expenses were funded through drawings on our senior secured asset-based revolving credit facility (“ABL facility”) and new debt issuances.
The following table summarizes the fair values of the assets acquired and liabilities assumed.
 Accounts receivable, net of allowance for doubtful accounts (1)
$
49

 Inventory
4

 Rental equipment
571

 Property and equipment
48

 Intangibles (2)
139

 Other assets
7

 Total identifiable assets acquired
818

 Short-term debt and current maturities of long-term debt (3)
(3
)
 Current liabilities
(33
)
 Deferred taxes
(15
)
 Long-term debt (3)
(11
)
 Other long-term liabilities
(5
)
 Total liabilities assumed
(67
)
 Net identifiable assets acquired
751

 Goodwill (4)
209

 Net assets acquired
$
960

(1) The fair value of accounts receivables acquired was $49, and the gross contractual amount was $53. We estimated that $4 would be uncollectible.
(2) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
 
Fair value
 Life (years)
 Customer relationships
$
138

10
 Non-compete agreements
1

1
 Total
$
139

 

(3) The acquired debt reflects capital lease obligations.
(4) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of NES's going-concern value, the value of NES's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that are not associated with the identifiable assets. $1 of goodwill is expected to be deductible for income tax purposes.
The years ended December 31, 2018 and 2017 include NES acquisition-related costs which are included in “Merger related costs” in our consolidated statements of income. The merger related costs are comprised of financial and legal advisory fees. In addition to the acquisition-related costs reflected in our consolidated statements of income, the debt issuance costs and the original issue premiums associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets.
Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired NES locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of NES since the acquisition date. The impact of the NES acquisition on our equipment rentals revenue is primarily reflected in the increase in the volume of OEC on rent of 18.8 percent for the year ended December 31, 2018 (such increase also includes the impact of the acquisitions of Neff Corporation ("Neff"), BakerCorp and Vander Holding Corporation and its subsidiaries (“BlueLine”) discussed below).
Neff Acquisition
In October 2017, we completed the acquisition of Neff. Neff was a provider of earthmoving, material handling, aerial and other equipment, and had 69 branches located in 14 states, with a concentration in southern geographies. Neff had approximately 1,100 employees and approximately $860 of rental assets at original equipment cost as of September 30, 2017. Neff had annual revenues of approximately $413. The acquisition augmented our earthmoving capabilities and efficiencies of scale in key market areas, particularly fast-growing southern geographies, and created opportunities for revenue synergies through the cross-selling of our broader fleet.
The aggregate consideration paid to holders of Neff common stock and options was approximately $1.316 billion (including $7 of stock consideration associated with Neff stock options and restricted stock units which were converted into United Rentals stock options). The acquisition and related fees and expenses were primarily funded through new debt issuances. 
The following table summarizes the fair values of the assets acquired and liabilities assumed.
 Accounts receivable, net of allowance for doubtful accounts (1)
$
72

 Inventory
5

 Rental equipment
550

 Property and equipment
45

 Intangibles (customer relationships) (2)
153

 Other assets
5

 Total identifiable assets acquired
830

 Current liabilities
(62
)
 Deferred taxes
(36
)
 Other long-term liabilities
(3
)
 Total liabilities assumed
(101
)
 Net identifiable assets acquired
729

 Goodwill (3)
587

 Net assets acquired
$
1,316

(1) The fair value of accounts receivables acquired was $72, and the gross contractual amount was $74. We estimated that $2 would be uncollectible.
(2) The customer relationships are being amortized over a 10 year life.
(3) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of Neff's going-concern value, the value of Neff's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that are not associated with the identifiable assets. $320 of goodwill is expected to be deductible for income tax purposes.
The years ended December 31, 2018 and 2017 include Neff acquisition-related costs which are included in “Merger related costs” in our consolidated statements of income. The merger related costs are primarily comprised of financial and legal advisory fees, and also include a termination fee we paid associated with a merger agreement Neff entered into with a prior bidder. In addition to the acquisition-related costs reflected in our consolidated statements of income, the debt issuance costs and the original issue premiums associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets.
Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired Neff locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of Neff since the acquisition date. The impact of the Neff acquisition on our equipment rentals revenue is primarily reflected in the increase in the volume of OEC on rent of 18.8 percent for the year ended December 31, 2018 (such increase also includes the impact of the acquisition of NES discussed above and the acquisitions of BakerCorp and BlueLine discussed below).
BakerCorp Acquisition
In July 2018, we completed the acquisition of BakerCorp. BakerCorp was a leading multinational provider of tank, pump, filtration and trench shoring rental solutions for a broad range of industrial and construction applications. BakerCorp had approximately 950 employees, and its operations were primarily concentrated in the United States and Canada, where it had 46 locations. BakerCorp also had 11 locations in France, Germany, the United Kingdom and the Netherlands. BakerCorp had annual revenues of approximately $295. The acquisition is expected to:
•Augment our bundled solutions for fluid storage, transfer and treatment;
•Expand our strategic account base; and
•Provide a significant opportunity to increase revenue and enhance customer service by cross-selling to our broader customer base.
The aggregate consideration paid was approximately $720. The acquisition and related fees and expenses were funded through drawings on our ABL facility.
The following table summarizes the fair values of the assets acquired and liabilities assumed. 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)
$
74

 Inventory
5

 Rental equipment
268

 Property and equipment
25

 Intangibles (2)
171

 Other assets
4

 Total identifiable assets acquired
547

 Current liabilities
(61
)
 Deferred taxes
(13
)
 Total liabilities assumed
(74
)
 Net identifiable assets acquired
473

 Goodwill (3)
247

 Net assets acquired
$
720

(1) The fair value of accounts receivables acquired was $74, and the gross contractual amount was $80. 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
$
166

8
 Trade names and associated trademarks
5

5
 Total
$
171

 

(3) All of the goodwill was assigned to our trench, power and fluid solutions segment. The level of goodwill that resulted from the acquisition is primarily reflective of BakerCorp's going-concern value, the value of BakerCorp's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that are not associated with the identifiable assets. $6 of goodwill is expected to be deductible for income tax purposes.
The year ended December 31, 2018 includes BakerCorp acquisition-related costs which are included in “Merger related costs” in our condensed consolidated statements of income. The merger related costs are comprised of financial and legal advisory fees.
Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired BakerCorp locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of BakerCorp since the acquisition date. The impact of the BakerCorp acquisition on our equipment rentals revenue is primarily reflected in the increase in the volume of OEC on rent of 18.8 percent for the year ended December 31, 2018 (such increase also includes the impact of the acquisition of NES and Neff discussed above and the acquisition of BlueLine discussed below).
BlueLine Acquisition
In October 2018, we completed the acquisition of BlueLine. BlueLine was one of the ten largest equipment rental companies in North America and served customers in the construction and industrial sectors with a focus on mid-sized and local accounts. BlueLine had 114 locations and over 1,700 employees based in 25 U.S. states, Canada and Puerto Rico. BlueLine had annual revenues of approximately $786. The acquisition is expected to:
•Expand our equipment rental capacity in many of the largest metropolitan areas in North America, including both U.S. coasts, the Gulf South and Ontario;
•Provide a well-diversified customer base with a balanced mix of commercial construction and industrial accounts;
•Add more mid-sized and local accounts to our customer base; and
•Provide a significant opportunity to increase revenue and enhance customer service by cross-selling to our
broader customer base.
The aggregate consideration paid was approximately $2.068 billion. The acquisition and related fees and expenses were funded through borrowings under a new $1 billion senior secured term loan credit facility (the “term loan facility”) and the issuance of $1.1 billion principal amount of 6 1/2 percent Senior Notes due 2026.
The following table summarizes the fair values of the assets acquired and liabilities assumed. 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)
$
117

 Inventory
8

 Rental equipment
1,081

 Property and equipment
72

 Intangibles (customer relationships) (2)
230

 Other assets
39

 Total identifiable assets acquired
1,547

 Short-term debt and current maturities of long-term debt (3)
(12
)
 Current liabilities
(124
)
 Deferred taxes
(4
)
 Long-term debt (3)
(25
)
 Other long-term liabilities
(4
)
 Total liabilities assumed
(169
)
 Net identifiable assets acquired
1,378

 Goodwill (4)
690

 Net assets acquired
$
2,068

(1) The fair value of accounts receivables acquired was $117, and the gross contractual amount was $125. We estimated that $8 would be uncollectible.
(2) The customer relationships are being amortized over a 5 year life.
(3) The acquired debt reflects capital lease obligations.
(4) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of BlueLine's going-concern value, the value of BlueLine's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that are not associated with the identifiable assets. $17 of goodwill is expected to be deductible for income tax purposes.
The year ended December 31, 2018 includes BlueLine acquisition-related costs which are included in “Merger related costs” in our condensed consolidated statements of income. The merger related costs are comprised of financial and legal advisory fees. In addition to the acquisition-related costs reflected in our consolidated statements of income, the debt issuance costs associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets.
Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired BlueLine locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of BlueLine since the acquisition date. The impact of the BlueLine acquisition on our equipment rentals revenue is primarily reflected in the increase in the volume of OEC on rent of 18.8 percent for the year ended December 31, 2018 (such increase also includes the impact of the acquisitions of NES, Neff and BakerCorp discussed above).
Pro forma financial information
The pro forma information below gives effect to the NES, Neff, BakerCorp and BlueLine acquisitions as if they had been completed on January 1, 2017 (“the pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisitions 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 acquisitions, and also does not reflect additional revenue opportunities following the acquisitions. The pro forma information includes adjustments to record the assets and liabilities of NES, Neff, BakerCorp and BlueLine at their respective fair values based on available information and to give effect to the financing for the acquisitions and related transactions. The pro forma
adjustments reflected in the table below are subject to change as additional analysis is performed. The acquisition measurement periods for NES and Neff have ended and the values assigned to the NES and Neff assets acquired and liabilities assumed are final. The opening balance sheet values assigned to the BakerCorp and BlueLine assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement periods. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. The table below presents unaudited pro forma consolidated income statement information as if NES, Neff, BakerCorp and BlueLine had been included in our consolidated results for the entire periods reflected. NES and Neff are excluded from the 2018 presentation because they were included in our results for the entire year ended December 31, 2018.
 
Year Ended
 
Year Ended
 
 
December 31, 2018
 
December 31, 2017
 
 
United Rentals
 
BakerCorp
 
BlueLine
 
Total
 
United Rentals
 
NES
 
Neff
 
BakerCorp
 
BlueLine
 
Total
 
Historic/pro forma revenues
$
8,047

 
$
184

 
$
665

 
$
8,896

 
$
6,641

 
$
81

 
$
312

 
$
276

 
$
727

 
$
8,037

 
Historic/combined pretax income (loss)
1,476

 
(84
)
 
(169
)
 
1,223

 
1,048

 
(12
)
 
38

 
(69
)
 
(132
)
 
873

 
Pro forma adjustments to pretax income (loss):
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

 
Impact of fair value mark-ups/useful life changes on depreciation (1)
 
 
(8
)
 
(60
)
 
(68
)
 
 
 
(9
)
 
(8
)
 
(13
)
 
(72
)
 
(102
)
 
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2)
 
 
—

 
(19
)
 
(19
)
 
 
 
(1
)
 
(1
)
 
—

 
(25
)
 
(27
)
 
Intangible asset amortization (3)
 
 
(18
)
 
(49
)
 
(67
)
 
 
 
(6
)
 
(21
)
 
(41
)
 
(77
)
 
(145
)
 
Goodwill impairment (4)
 
 
—

 
—

 
—

 
 
 
—

 
—

 
32

 
—

 
32

 
Interest expense (5)
 
 
(14
)
 
(92
)
 
(106
)
 
 
 
(9
)
 
(51
)
 
(19
)
 
(103
)
 
(182
)
 
Elimination of historic interest (6)
 
 
30

 
106

 
136

 
 
 
12

 
34

 
41

 
154

 
241

 
Elimination of merger related costs (7)
 
 
67

 
166

 
233

 
 
 
17

 
33

 
—

 
—

 
50

 
Restructuring charges (8)
 
 
9

 
13

 
22

 
 
 
(3
)
 
(6
)
 
(9
)
 
(13
)
 
(31
)
 
Pro forma pretax income
 
 
 
 
 
 
$
1,354

 
 
 
 
 
 
 
 
 
 
 
$
709

 
(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 NES, Neff, BakerCorp and BlueLine acquisitions.
(2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the NES, Neff and BlueLine acquisitions. BakerCorp did not historically recognize a material amount of rental equipment sales, and accordingly no adjustment was required for BakerCorp.
(3) The intangible assets acquired in the NES, Neff, BakerCorp and BlueLine acquisitions were amortized.
(4) The goodwill impairment charge that BakerCorp recognized during the year ended December 31, 2017 was eliminated. If the acquisition had occurred as of the pro forma acquisition date, this impairment charge would not have been recognized (instead, we would have tested for goodwill impairment based on the post-acquisition reporting unit structure).
(5) As discussed above, we issued debt to partially fund the NES, Neff, BakerCorp and BlueLine acquisitions. Interest expense was adjusted to reflect these changes in our debt portfolio.
(6) Historic interest, including losses on repurchase/redemption of debt securities, on debt that is not part of the combined entity was eliminated.
(7) Merger related costs primarily comprised of financial and legal advisory fees associated with the NES, Neff, BakerCorp and BlueLine were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. The merger related costs also include a termination fee we paid associated with a merger agreement Neff entered into with a prior bidder. The adjustment for BakerCorp for the year ended December 31, 2018 includes $57 of merger related costs recognized by BakerCorp prior to the acquisition. The adjustment for BlueLine for the year ended December 31, 2018 includes $142 of merger related costs recognized by BlueLine prior to the acquisition.
(8) We expect to recognize restructuring charges primarily comprised of severance costs and branch closure charges associated with the acquisitions over a period of approximately one year following the acquisition dates, which, for the pro forma presentation, was January 1, 2017. The adjustments above reflect the timing of the actual restructuring charges following the acquisitions (the pro forma restructuring charges above for the year ended December 31, 2017 reflect the actual restructuring charges recognized during year following the acquisitions). The restructuring charges reflected in our consolidated statements of income also include non acquisition-related restructuring charges, as discussed in note 6 to the consolidated financial statements. We do not expect to recognize significant additional restructuring charges associated with the NES and Neff acquisitions. We expect to recognize additional restructuring charges associated with the BakerCorp and BlueLine acquisition, however the total costs expected to be incurred are not currently estimable, as we are still identifying the actions that will be undertaken.