---

---

---

•	the possibility that companies that we have acquired or may acquire, including BakerCorp International Holdings, Inc. (“BakerCorp”) and Vander Holding Corporation and its subsidiaries (“BlueLine”), could have undiscovered liabilities or involve other unexpected costs, may strain our management capabilities or may be difficult to integrate;

•	the cyclical nature of our business, which is highly sensitive to North American construction and industrial activities; if construction or industrial activity decline, our revenues and, because many of our costs are fixed, our profitability may be adversely affected;

•	our significant indebtedness (which totaled $11.4 billion at December 31, 2019) requires us to use a substantial portion of our cash flow for debt service and can constrain our flexibility in responding to unanticipated or adverse business conditions;

•	inability to refinance our indebtedness on terms that are favorable to us, or at all;

•	incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness;

•	noncompliance with financial or other covenants in our debt agreements, which could result in our lenders terminating the agreements and requiring us to repay outstanding borrowings;

•	restrictive covenants and amount of borrowings permitted in our debt instruments, which can limit our financial and operational flexibility;

•	overcapacity of fleet in the equipment rental industry;

•	inability to benefit from government spending, including spending associated with infrastructure projects;

•	fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated;

•	rates we charge and time utilization we achieve being less than anticipated;

•	inability to manage credit risk adequately or to collect on contracts with a large number of customers;

•	inability to access the capital that our businesses or growth plans may require;

•	incurrence of impairment charges;

•	trends in oil and natural gas could adversely affect the demand for our services and products;

•	the fact that our holding company structure requires us to depend in part on distributions from subsidiaries and such distributions could be limited by contractual or legal restrictions;

•	increases in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves;

•	incurrence of additional expenses (including indemnification obligations) and other costs in connection with litigation, regulatory and investigatory matters;

•	the outcome or other potential consequences of regulatory matters and commercial litigation;

•	shortfalls in our insurance coverage;

•	our charter provisions as well as provisions of certain debt agreements and our significant indebtedness may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us;

•	turnover in our management team and inability to attract and retain key personnel;

•	costs we incur being more than anticipated, and the inability to realize expected savings in the amounts or time frames planned;

•	dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms;

•	inability to sell our new or used fleet in the amounts, or at the prices, we expect;

•	competition from existing and new competitors;

•	risks related to security breaches, cybersecurity attacks, failure to protect personal information, compliance with data protection laws and other significant disruptions in our information technology systems;

•	the costs of complying with environmental, safety and foreign law and regulations, as well as other risks associated with non-U.S. operations, including currency exchange risk (including as a result of Brexit), and tariffs;

•	labor disputes, work stoppages or other labor difficulties, which may impact our productivity, and potential enactment of new legislation or other changes in law affecting our labor relations or operations generally;

•	increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment;

---

•	the effect of changes in tax law; and

•	other factors discussed under Item 1A-Risk Factors, and elsewhere in this annual report.

---

---

---

(1)	Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.

(2)

Reflects the combined impact of changes in rental rates, time utilization, and mix that contribute to the variance in owned equipment rental revenue. See note 3 to the consolidated financial statements for a discussion of the different types of equipment rentals revenue. Rental rate changes are calculated based on the year-over-year variance in average contract rates, weighted by the prior period revenue mix. Time utilization is calculated by dividing the amount of time an asset is on rent by the amount of time the asset has been owned during the year. Mix includes the impact of changes in customer, fleet, geographic and segment mix.

(3)	Reflects the combined impact of changes in the other types of equipment rentals revenue (see note 3 for further detail), excluding owned equipment rental revenue.

(4)

As discussed in note 4 to the consolidated financial statements, we completed the acquisitions of BakerCorp and BlueLine in July 2018 and October 2018, respectively. Additionally, we completed the acquisition of NES Rentals Holdings II, Inc. (“NES”) and Neff Corporation ("Neff") in April 2017 and October 2017, respectively. The pro forma information includes the standalone, pre-acquisition results of NES, Neff, BakerCorp and BlueLine.

(5)	As discussed above, we completed the acquisitions of BakerCorp and BlueLine in July 2018 and October 2018, respectively. Estimated market share as of December 31, 2018 includes the standalone, pre-acquisition revenues of BakerCorp and BlueLine.

•	A consistently superior standard of service to customers, often provided through a single point of contact;

•

The further optimization of our customer mix and fleet mix, with a dual objective: to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth. We believe these efforts will lead to even better service of our target accounts, primarily large construction and industrial customers, as well as select local contractors. Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns;

•

A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement. We continue to implement Lean kaizen processes across our branch network, with the objectives of: reducing the cycle time associated with renting our equipment to customers; improving invoice accuracy and service quality; reducing the elapsed time for equipment pickup and delivery; and improving the effectiveness and efficiency of our repair and maintenance operations;

•	A continued focus on Project XL, which is a set of eight specific work streams focused on driving profitable growth through revenue opportunities and generating incremental profitability through cost savings across our business;

•

The continued expansion of our trench, power and fluid solutions footprint, as well as our tools and onsite services offerings, and the cross-selling of these services throughout our network, as exhibited by our recent acquisition of BakerCorp discussed above. We plan to open at least 25 specialty rental branches/tool hubs/onsite services locations in 2020 and continue to invest in specialty rental fleet to further position United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings; and

•	The pursuit of strategic acquisitions to continue to expand our core equipment rental business, as exhibited by our recently completed acquisitions of NES, Neff and BlueLine. Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.

---

•	Industrial and other non-construction rentals represented approximately 50 percent of our rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers and infrastructure entities;

•	Commercial construction rentals represented approximately 46 percent of our rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment and other commercial purposes; and

•	Residential rentals represented approximately four percent of our rental revenue, primarily reflecting rentals of equipment for the construction and renovation of homes.

•	Equipment Sharing Among Branches. Each branch within a region can access equipment located elsewhere in the region. This fleet sharing increases equipment utilization because equipment that is idle at one branch can be marketed and rented through other branches. Additionally, fleet sharing allows us to be more disciplined with our capital spend.

•

Customer Care Center. We have a Customer Care Center ("CCC") with locations in Tampa, Florida and Charlotte, North Carolina that handles all telephone calls to our customer service telephone line, 1-800-UR-RENTS. The CCC handles many of the 1-800-UR-RENTS telephone calls without having to route them to individual branches, and allows us to provide a more uniform quality experience to customers, manage fleet sharing more effectively and free up branch employee time.

•	Consolidation of Common Functions. We reduce costs through the consolidation of functions that are common to our branches, such as accounts payable, payroll, benefits and risk management, information technology and credit and collection.

---

•

enable branch personnel to (i) determine equipment availability, (ii) access all equipment within a geographic region and arrange for equipment to be delivered from anywhere in the region directly to the customer, (iii) monitor business activity on a real-time basis and (iv) obtain customized reports on a wide range of operating and financial data, including equipment utilization, rental rate trends, maintenance histories and customer transaction histories;

•	allow our mobile sales and service team members to support our customers efficiently while in the field;

•	permit customers to access their accounts online; and

•	allow management to obtain a wide range of operational and financial data.

•	enabling us to better serve national account customers with multiple locations;

•	helping us achieve favorable resale prices by allowing us to access used equipment resale markets across North America; and

•	reducing our dependence on any particular customer.

---

•	construction companies that use equipment for constructing and renovating commercial buildings, warehouses, industrial and manufacturing plants, office parks, airports, residential developments and other facilities;

•	industrial companies—such as manufacturers, chemical companies, paper mills, railroads, ship builders and utilities—that use equipment for plant maintenance, upgrades, expansion and construction;

---

•	municipalities that require equipment for a variety of purposes; and

•	homeowners and other individuals that use equipment for projects that range from simple repairs to major renovations.

---

•	a decrease in expected levels of infrastructure spending;

•	a lack of availability of credit;

•	an overcapacity of fleet in the equipment rental industry;

•	a decrease in the level of exploration, development, production activity and capital spending by oil and natural gas companies;

•	an increase in the cost of construction materials;

•	an increase in interest rates;

•	adverse weather conditions, which may temporarily affect a particular region;

•	a prolonged shutdown of the U.S. government; or

•	terrorism or hostilities involving the United States, Canada or Europe.

---

•	increasing our vulnerability to, and limiting our flexibility to plan for, or react to, adverse economic, industry or competitive developments;

•	making it more difficult to pay or refinance our debts as they become due during periods of adverse economic, financial market or industry conditions;

•	requiring us to devote a substantial portion of our cash flow to debt service, reducing the funds available for other purposes, including funding working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes, or otherwise constraining our financial flexibility;

•	restricting our ability to move operating cash flows to Holdings. URNA’s payment capacity is restricted under the covenants in our senior secured asset-based revolving credit facility (“ABL facility”), our senior secured term loan credit facility (“term loan facility”) and the indentures governing URNA’s outstanding indebtedness;

•	affecting our ability to obtain additional financing for working capital, acquisitions or other purposes, particularly since substantially all of our assets are subject to security interests relating to existing indebtedness;

•	decreasing our profitability or cash flow;

•	causing us to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions;

•	causing us to be disadvantaged compared to competitors with less debt and lower debt service requirements;

•	resulting in a downgrade in our credit rating or the credit ratings of any of the indebtedness of our subsidiaries, which could increase the cost of further borrowings;

•	requiring our debt to become due and payable upon a change in control; and

•	limiting our ability to borrow additional monies in the future to fund working capital, capital expenditures and other general corporate purposes.

•	reducing or delaying capital expenditures;

•	limiting our growth;

•	seeking additional capital;

•	selling assets; or

•	restructuring or refinancing our indebtedness.

---

---

•	unrecorded liabilities of acquired companies and unidentified issues that we fail to discover during our due diligence investigations or that are not subject to indemnification or reimbursement by the seller;

•	greater than expected expenses such as the need to obtain additional debt or equity financing for any transaction;

•	unfavorable accounting treatment and unexpected increases in taxes;

•	adverse effects on our ability to maintain relationships with customers, employees and suppliers;

•	inherent risk associated with entering a geographic area or line of business in which we have no or limited experience;

•	difficulty in assimilating the operations and personnel of an acquired company within our existing operations, including the consolidation of corporate and administrative functions;

•	difficulty in integrating marketing, information technology and other systems;

•	difficulty in conforming standards, controls, procedures and policies, business cultures and compensation structures;

•	difficulty in identifying and eliminating redundant and underperforming operations and assets;

•	loss of key employees of the acquired company;

•	operating inefficiencies that have a negative impact on profitability;

•	impairment of goodwill or other acquisition-related intangible assets;

•	failure to achieve anticipated synergies or receiving an inadequate return of capital; and

•	strains on management and other personnel time and resources to evaluate, negotiate and integrate acquisitions.

---

•	the seasonal rental patterns of our customers, with rental activity tending to be lower in the winter;

•	changes in the size of our rental fleet and/or in the rate at which we sell our used equipment;

•	an overcapacity of fleet in the equipment rental industry;

•	changes in private non-residential construction spending or government funding for infrastructure and other construction projects;

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

•	commodity price pressures and the resultant increase in the cost of fuel and steel to our equipment suppliers, which can result in increased equipment costs for us;

•	other cost fluctuations, such as costs for employee-related compensation and healthcare benefits;

•	labor shortages, work stoppages or other labor difficulties;

•	potential enactment of new legislation affecting our operations or labor relations;

•	completion of acquisitions, divestitures or recapitalizations;

•	increases in interest rates and related increases in our interest expense and our debt service obligations;

•

the possible need, from time to time, to record goodwill impairment charges or other write-offs or charges due to a variety of occurrences, such as the adoption of new accounting standards, the impairment of assets, rental location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurings, the refinancing of existing indebtedness or the buy-out of equipment leases; and

•	currency risks and other risks associated with international operations.

•	announcements of developments related to our business;

•	market perceptions of any proposed merger or acquisition and the likelihood of our involvement in other merger and acquisition activity;

•	variations in our revenues, gross margins, earnings or other financial results from investors’ expectations;

•	departure of key personnel;

•	purchases or sales of large blocks of our stock by institutional investors or transactions by insiders;

•	fluctuations in the results of our operations and general conditions in the economy, our market, and the markets served by our customers;

---

•	investor perceptions of the equipment rental industry in general and our Company in particular;

•	fluctuations in the prices of oil and natural gas;

•	expectations regarding our share repurchase program; and

•	the operating and stock performance of comparable companies or related industries.

---

•	the level of supply and demand for oil and natural gas;

•	governmental regulations, including the policies of governments regarding climate change and the exploration for, and production and development of, oil and natural gas reserves;

•	weather conditions and natural disasters;

•	worldwide political, military and economic conditions;

•	the level of oil production by non-OPEC countries and the available excess production capacity within OPEC;

•	oil refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas;

•	the cost of producing and delivering oil and natural gas; and

•	potential acceleration of the development of alternative fuels.

•	our insurance policies, reflecting a program structure that we believe reflects market conditions for companies our size, are often subject to significant deductibles or self-insured retentions;

•	our director and officer liability insurance policy has no deductible for individual non-indemnifiable loss, but is subject to a deductible for company reimbursement coverage;

---

•	we do not currently maintain Company-wide stand-alone coverage for environmental liability (other than legally required coverage), since we believe the cost for such coverage is high relative to the benefit it provides; and

•	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, might not be covered by our insurance.

---

---

---

•	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;

•	the supply of used equipment on the market;

•	the existence and capacities of different sales outlets;

•	the age of the equipment at the time it is sold;

•	worldwide and domestic demand for used equipment; and

•	general economic conditions.

---

Item  1B.	Unresolved Staff Comments

Item 2.	Properties

---

Item  3.	Legal Proceedings

Item  4.	(Removed and Reserved)

Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(1)	In October 2019, November 2019 and December 2019, 2,653, 3,601 and 11,556 shares, respectively, were withheld by Holdings to satisfy tax withholding obligations upon the vesting of restricted stock unit awards. These shares were not acquired pursuant to any repurchase plan or program.

(2)

On April 17, 2018, our Board authorized a $1.25 billion share repurchase program which commenced in July 2018. The program was completed in 2019, and there were no open share repurchase programs as of December 31, 2019. In January 2020, our Board authorized a new $500 million share repurchase program, which will commence in the first quarter of 2020 and which we intend to complete over twelve months.

---

Item 6.	Selected Financial Data

•	In April 2017, we completed the acquisition of NES Rentals Holdings II, Inc. (“NES”). NES had annual revenues of approximately $369;

•	In October 2017, we completed the acquisition of Neff Corporation ("Neff"). Neff had annual revenues of approximately $413;

•	In July 2018, we completed the acquisition of BakerCorp International Holdings, Inc. (“BakerCorp”). BakerCorp had annual revenues of approximately $295; and

•	In October 2018, we completed the acquisition of Vander Holding Corporation and its subsidiaries (“BlueLine”). BlueLine had annual revenues of approximately $786.

---

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data and unless otherwise indicated)

•	A consistently superior standard of service to customers, often provided through a single point of contact;

•

The further optimization of our customer mix and fleet mix, with a dual objective: to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth. We believe these efforts will lead to even better service of our target accounts, primarily large construction and industrial customers, as well as select local contractors. Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns;

•

A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement. We continue to implement Lean kaizen processes across our branch network, with the objectives of: reducing the cycle time associated with renting our equipment to customers; improving invoice accuracy and service quality; reducing the elapsed time for equipment pickup and delivery; and improving the effectiveness and efficiency of our repair and maintenance operations;

•	A continued focus on Project XL, which is a set of eight specific work streams focused on driving profitable growth through revenue opportunities and generating incremental profitability through cost savings across our business;

•

The continued expansion of our trench, power and fluid solutions footprint, as well as our tools and onsite services offerings, and the cross-selling of these services throughout our network, as exhibited by our recent acquisition of BakerCorp discussed above. We plan to open at least 25 specialty rental branches/tool hubs/onsite services locations in 2020 and continue to invest in specialty rental fleet to further position United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings; and

•	The pursuit of strategic acquisitions to continue to expand our core equipment rental business, as exhibited by our recently completed acquisitions of NES, Neff and BlueLine (which is discussed further in note 4 to the consolidated financial statements). Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.

---

•	Equipment rentals increased 14.8 percent and 4.1 percent year-over-year, on an actual and a pro forma basis, respectively;

•	Average OEC increased 17.7 percent and 4.9 percent year-over-year, on an actual and a pro forma basis, respectively;

•	Fleet productivity decreased 2.2 percent primarily due to the impact of the BakerCorp and BlueLine acquisitions. On a pro forma basis, fleet productivity increased 0.6 percent;

•	72 percent of equipment rental revenue was derived from key accounts, as compared to 71 percent in 2018. Key accounts are each managed by a single point of contact to enhance customer service; and

•	The number of rental locations in our higher margin trench, power and fluid solutions (also referred to as "specialty") segment increased by 27 year-over-year primarily due to acquisitions and cold starts.

•	Issued $750 principal amount of 5 1/4 percent Senior Notes due 2030;

•	Issued $750 principal amount of 3 7/8 percent Senior Secured Notes due 2027;

•	Redeemed all $850 principal amount of our 5 3/4 percent Senior Notes;

•	Redeemed all $1.0 billion principal amount of our 4 5/8 percent Senior Secured Notes;

•	Amended and extended our ABL facility, including an increase in the facility size from $3.0 billion to $3.75 billion; and

•	Amended and extended our accounts receivable securitization facility.

---

(1)

This reflects transaction costs associated with the NES and Neff acquisitions that were completed in 2017, and the BakerCorp and BlueLine acquisitions discussed in note 4 to the consolidated financial statements. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. For additional information, see "Results of Operations-Other costs/(income)-merger related costs" below.

(2)	This reflects the amortization of the intangible assets acquired in the RSC, National Pump, NES, Neff, BakerCorp and BlueLine acquisitions.

(3)	This reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff, BakerCorp and BlueLine acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.

(4)	This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC, NES, Neff and BlueLine acquisitions that was subsequently sold.

(5)	As discussed in note 6 to our consolidated financial statements, this primarily reflects severance costs and branch closure charges associated with our restructuring programs.

(6)	This reflects write-offs of leasehold improvements and other fixed assets.

---

(1)

This reflects transaction costs associated with the NES and Neff acquisitions that were completed in 2017, and the BakerCorp and BlueLine acquisitions discussed in note 4 to the consolidated financial statements. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. For additional information, see "Results of Operations-Other costs/(income)-merger related costs" below.

(2)	As discussed in note 6 to our consolidated financial statements, this primarily reflects severance costs and branch closure charges associated with our restructuring programs.

(3)	Represents non-cash, share-based payments associated with the granting of equity instruments.

---

(4)	This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC, NES, Neff and BlueLine acquisitions that was subsequently sold.

(1)	Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.

(2)

Reflects the combined impact of changes in rental rates, time utilization, and mix that contribute to the variance in owned equipment rental revenue. See note 3 to the consolidated financial statements for a discussion of the different types of equipment rentals revenue. Rental rate changes are calculated based on the year-over-year variance in average contract rates, weighted by the prior period revenue mix. Time utilization is calculated by dividing the amount of time an asset is on rent by the amount of time the asset has been owned during the year. Mix includes the impact of changes in customer, fleet, geographic and segment mix.

(3)	Reflects the combined impact of changes in the other types of equipment rentals revenue (see note 3 for further detail), excluding owned equipment rental revenue.

(4)	As discussed in note 4 to the consolidated financial statements, we completed the acquisitions of BakerCorp and BlueLine in July 2018 and October 2018, respectively. Additionally, we completed the acquisition of NES and Neff in April 2017

---

---

---

---

---

---

---

---

---

---

---

---

---

(1)

The payments due with respect to a period represent (i) in the case of debt and finance leases, the scheduled principal payments due in such period, and (ii) in the case of operating leases, the payments due in such period for non-cancelable operating leases with initial or remaining terms of one year or more. See note 12 to the consolidated financial statements for further debt information, and note 13 for further finance lease and operating lease information.

(2)	Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of December 31, 2019.

(3)	These primarily represent service agreements with third parties to provide wireless and network services.

(4)

As of December 31, 2019, we had outstanding purchase orders, which were negotiated in the ordinary course of business, with our equipment and inventory suppliers. These purchase commitments can generally be cancelled by us with 30 days notice and without cancellation penalties. The equipment and inventory receipts from the suppliers for these purchases and related payments to the suppliers are expected to be completed throughout 2020.

(5)

As discussed further in note 14 to the consolidated financial statements, the Tax Act, which was enacted in December 2017, included a transition tax on unremitted foreign earnings and profits, and we completed the accounting for the transition tax in 2018. We have elected to pay the transition tax amount payable of $62 over an eight-year period. The amount that we expect to pay as reflected in the table above represents the total we owe, net of an overpayment of federal taxes, which we are required to apply to the transition tax.

(6)

This information excludes $10 of unrecognized tax benefits. It is not possible to estimate the time period during which these unrecognized tax benefits may be paid to tax authorities. Additionally, we are exposed to various claims relating to our business, including those for which we retain portions of the losses through the application of deductibles and self-insured retentions, which we sometimes refer to as “self-insurance.” Our self-insurance reserves totaled $121 at December 31, 2019. Self-insurance liabilities are based on estimates and actuarial assumptions and can fluctuate in both amount and in timing of cash settlement because historical trends are not necessarily predictive of the future, and, accordingly, are not included in the table above.

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk

---

Item 8.	Financial Statements and Supplementary Data

---

---

---

---

---

---

---

---

---

United Rentals, Inc. ("Holdings") is principally a holding company and conducts its operations primarily through its wholly owned subsidiary, United Rentals (North America), Inc. (“URNA”), and subsidiaries of URNA. Holdings’ primary asset is its sole ownership of all issued and outstanding shares of common stock of URNA. URNA’s various credit agreements and debt instruments place restrictions on its ability to transfer funds to its stockholder. As used in this report, the terms the “Company,” “United Rentals,” “we,” “us,” and “our” refer to United Rentals, Inc. and its subsidiaries, unless otherwise indicated.

We rent equipment to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and others in the United States, Canada and Europe. As discussed in note 4 to the consolidated financial statements, with the recently completed acquisition of BakerCorp International Holdings, Inc. (“BakerCorp”), which added 11 European locations in France, Germany, the United Kingdom and the Netherlands to our branch network, we entered into select European markets. In addition to renting equipment, we sell new and used rental equipment, as well as related contractor supplies, parts and service.

The accompanying consolidated financial statements include our accounts and those of our controlled subsidiary companies. All significant intercompany accounts and transactions have been eliminated. We consolidate variable interest entities if we are deemed the primary beneficiary of the entity.

Cash Equivalents

We consider all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. Our cash equivalents at December 31, 2019 and 2018 consist of direct obligations of financial institutions rated A or better.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See note 3 to our consolidated financial statements for further detail.

Inventory

Inventory consists of new equipment, contractor supplies, tools, parts, fuel and related supply items. Inventory is stated at the lower of cost or market. Cost is determined, depending on the type of inventory, using either a specific identification, weighted-average or first-in, first-out method.

Rental Equipment

Rental equipment, which includes service and delivery vehicles, is recorded at cost and depreciated over the estimated useful life of the equipment using the straight-line method. The range of estimated useful lives for rental equipment is two to 20 years. Rental equipment is depreciated to a salvage value of zero to 10 percent of cost. Rental equipment is depreciated whether or not it is out on rent.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. The range of estimated useful lives for property and equipment is two to 39 years. Ordinary repair and maintenance costs are charged to expense as incurred. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the remaining life of the lease, whichever is shorter.

Acquisition Accounting

---

We have made a number of acquisitions in the past and may continue to make acquisitions in the future. The assets acquired and liabilities assumed are recorded based on their respective fair values at the date of acquisition. Long-lived assets (principally rental equipment), goodwill and other intangible assets generally represent the largest components of our acquisitions. Rental equipment is valued utilizing either a cost, market or income approach, or a combination of certain of these methods, depending on the asset being valued and the availability of market or income data. The intangible assets that we have acquired are non-compete agreements, customer relationships and trade names and associated trademarks. The estimated fair values of these intangible assets reflect various assumptions about discount rates, revenue growth rates, operating margins, terminal values, useful lives and other prospective financial information. Goodwill is calculated as the excess of the cost of the acquired entity over the net of the fair value of the assets acquired and the liabilities assumed. Non-compete agreements, customer relationships and trade names and associated trademarks are valued based on an excess earnings or income approach based on projected cash flows.

Determining the fair value of the assets and liabilities acquired is judgmental in nature and can involve the use of significant estimates and assumptions. The judgments made in determining the estimated fair value assigned to the assets acquired, as well as the estimated life of the assets, can materially impact net income in periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in the future. As discussed below, we regularly review for impairments.

When we make an acquisition, we also acquire other assets and assume liabilities. These other assets and liabilities typically include, but are not limited to, parts inventory, accounts receivable, accounts payable and other working capital items. Because of their short-term nature, the fair values of these other assets and liabilities generally approximate the book values on the acquired entities' balance sheets.

Evaluation of Goodwill Impairment

Goodwill is tested for impairment annually or more frequently if an event or circumstance indicates that an impairment loss may have been incurred. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; determination of the fair value of each reporting unit; and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction).

We estimate the fair value of our reporting units (which are our regions) using a combination of an income approach based on the present value of estimated future cash flows and a market approach based on market price data of shares of our Company and other corporations engaged in similar businesses as well as acquisition multiples paid in recent transactions within our industry (including our own acquisitions). We believe this approach, which utilizes multiple valuation techniques, yields the most appropriate evidence of fair value. We review goodwill for impairment utilizing a two-step process. The first step of the impairment test requires a comparison of the fair value of each of our reporting units' net assets to the respective carrying value of net assets. If the carrying value of a reporting unit's net assets is less than its fair value, no indication of impairment exists and a second step is not performed. If the carrying amount of a reporting unit's net assets is higher than its fair value, there is an indication that an impairment may exist and a second step must be performed. In the second step, the impairment is calculated by comparing the implied fair value of the reporting unit's goodwill (as if purchase accounting were performed on the testing date) with the carrying amount of the goodwill. If the carrying amount of the reporting unit's goodwill is greater than the implied fair value of its goodwill, an impairment loss must be recognized for the excess and charged to operations.

Financial Accounting Standards Board ("FASB") guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. As discussed below (see "New Accounting Pronouncements-Simplifying the Test for Goodwill Impairment"), in 2020, we will adopt accounting guidance that eliminates the second step from the goodwill impairment test (this guidance is not expected to have a significant impact on our financial statements).

In connection with our goodwill impairment test that was conducted as of October 1, 2018, we bypassed the qualitative assessment for each reporting unit and proceeded directly to the first step of the goodwill impairment test. Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Fluid Solutions Europe reporting unit, had estimated fair values which exceeded their respective carrying amounts by at least 52 percent. As discussed in note 4 to the consolidated financial statements, in July 2018, we completed the acquisition of BakerCorp, which added 11 European locations to our branch network. The European locations are in our Fluid Solutions Europe reporting unit. All of the assets in the Fluid Solutions Europe reporting unit were acquired in the BakerCorp acquisition. The estimated fair value of our Fluid Solutions Europe reporting unit exceeded its carrying amount by 7 percent. As all of the assets in the Fluid Solutions Europe reporting unit were recorded at fair value as of the July 2018 acquisition date, we expected the percentage by which the Fluid

---

Solutions Europe reporting unit’s fair value exceeded its carrying value to be significantly less than the equivalent percentages determined for our other reporting units.

In connection with our goodwill impairment test that was conducted as of October 1, 2019, we bypassed the qualitative assessment for each reporting unit and proceeded directly to the first step of the goodwill impairment test. Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Fluid Solutions Europe reporting unit, had estimated fair values which exceeded their respective carrying amounts by at least 32 percent. As discussed above, in July 2018, we completed the acquisition of BakerCorp. All of the assets in the Fluid Solutions Europe reporting unit were acquired in the BakerCorp acquisition. The estimated fair value of our Fluid Solutions Europe reporting unit exceeded its carrying amount by 12 percent. As all of the assets in the Fluid Solutions Europe reporting unit were recorded at fair value as of the July 2018 acquisition date, we expected the percentage by which the Fluid Solutions Europe reporting unit’s fair value exceeded its carrying value to be significantly less than the equivalent percentages determined for our other reporting units.

Restructuring Charges

Costs associated with exit or disposal activities, including lease termination costs and certain employee severance costs associated with restructuring, branch closings or other activities, are recognized at fair value when they are incurred.

Other Intangible Assets

Other intangible assets consist of non-compete agreements, customer relationships and trade names and associated trademarks. The non-compete agreements are being amortized on a straight-line basis over initial periods of approximately 5 years. The customer relationships are being amortized either using the sum of the years' digits method or on a straight-line basis over initial periods ranging from 5 to 15 years. The trade names and associated trademarks are being amortized using the sum of the years' digits method over initial periods of approximately 5 years. We believe that the amortization methods used reflect the estimated pattern in which the economic benefits will be consumed.

Long-Lived Assets

Long-lived assets are recorded at the lower of amortized cost or fair value. As part of an ongoing review of the valuation of long-lived assets, we assess the carrying value of such assets if facts and circumstances suggest they may be impaired. If this review indicates the carrying value of such an asset may not be recoverable, as determined by an undiscounted cash flow analysis over the remaining useful life, the carrying value would be reduced to its estimated fair value.

Translation of Foreign Currency

Assets and liabilities of our foreign subsidiaries that have a functional currency other than U.S. dollars are translated into U.S. dollars using exchange rates at the balance sheet date. Revenues and expenses are translated at average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive (loss) income within stockholders’ equity.

Revenue Recognition

As discussed in note 3 to our consolidated financial statements, in 2018, we adopted updated FASB revenue recognition guidance ("Topic 606"). Topic 606 replaced Topic 605, which was the revenue recognition accounting standard in effect for the year ended December 31, 2017. As discussed in note 13 to our consolidated financial statements, in 2019, we adopted updated FASB lease accounting guidance ("Topic 842"). Topic 842 replaced Topic 840, which was the lease accounting standard in effect for the years ended December 31, 2018 and 2017. As discussed in note 3, most of our revenue is accounted for under Topic 842. The discussion below addresses our primary revenue types based on the accounting standard used to determine the accounting.

Lease revenues (Topic 842)

The accounting for the significant types of revenue that are accounted for under Topic 842 is discussed below.

Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We account for such rentals as operating leases.

Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above.

---

Revenues from contracts with customers (Topic 606)

The accounting for the significant types of revenue that are accounted for under Topic 606 is discussed below.

Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed.

Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable.

Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed.

See note 3 to our consolidated financial statements for further discussion of our revenue accounting.

Delivery Expense

Equipment rentals include our revenues from fees we charge for equipment delivery. Delivery costs are charged to operations as incurred, and are included in cost of revenues on our consolidated statements of income.

Advertising Expense

We promote our business through local and national advertising in various media, including television, trade publications, branded sponsorships, yellow pages, the internet, radio and direct mail. Advertising costs are generally expensed as incurred. These costs may include the development costs for branded content and advertising campaigns. Advertising expense, net of the qualified advertising reimbursements discussed below, was immaterial for the years ended December 31, 2019, 2018 and 2017.

We receive reimbursements for advertising that promotes a vendor’s products or services. Such reimbursements that meet the applicable criteria under U.S. generally accepted accounting principles (“GAAP”) are offset against advertising costs in the period in which we recognize the incremental advertising cost. The amounts of qualified advertising reimbursements that reduced advertising expense were $49, $41 and $35 for the years ended December 31, 2019, 2018 and 2017, respectively.

Insurance

We are insured for general liability, workers’ compensation and automobile liability, subject to deductibles or self-insured retentions per occurrence. Losses within the deductible amounts are accrued based upon the aggregate liability for reported claims incurred, as well as an estimated liability for claims incurred but not yet reported. These liabilities are not discounted. The Company is also self-insured for group medical claims but purchases “stop loss” insurance to protect itself from any one significant loss.

Income Taxes

We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities and are measured using the tax rates and laws that are expected to be in effect when the differences are expected to reverse. Recognition of deferred tax assets is limited to amounts considered by management to be more likely than not to be realized in future periods. The most significant positive evidence that we consider in the recognition of deferred tax assets is the expected reversal of cumulative deferred tax liabilities resulting from book versus tax depreciation of our rental equipment fleet that is well in excess of the deferred tax assets.

We use a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return regarding uncertainties in income tax positions. The first step is recognition: we determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we presume that the position will be examined by the appropriate taxing authority with full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset or an increase in a deferred tax liability.

---

The Tax Cuts and Jobs Act (the "Tax Act"), which was enacted in December 2017, had a substantial impact on our income tax benefit for the year ended December 31, 2017. The Tax Act reduced the U.S. federal statutory tax rate from 35 percent to 21 percent and the years ended December 31, 2019 and 2018 reflect the decreased tax rate. See note 14 to the consolidated financial statements for further detail.

We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes have been provided on such earnings. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and have not changed our previous indefinite reinvestment determination following the enactment of the Tax Act. We have not repatriated funds to the U.S. to satisfy domestic liquidity needs, nor do we anticipate the need to do so. The Tax Act required a one-time transition tax for deemed repatriation of accumulated undistributed earnings of certain foreign investments. As discussed in note 14 to the consolidated financial statements, we completed our accounting for the tax effects of enactment of the Tax Act in 2018.

We regularly review our cash positions and our determination of permanent reinvestment of foreign earnings. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates impact the calculation of the allowance for doubtful accounts, depreciation and amortization, income taxes and reserves for claims. Actual results could materially differ from those estimates.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk include cash and cash equivalents and accounts receivable. We maintain cash and cash equivalents with high quality financial institutions. Concentration of credit risk with respect to receivables is limited because a large number of geographically diverse customers makes up our customer base (see note 3 to our consolidated financial statements for further detail). We manage credit risk through credit approvals, credit limits and other monitoring procedures.

Stock-Based Compensation

We measure stock-based compensation at the grant date based on the fair value of the award and recognize stock-based compensation expense over the requisite service period. Determining the fair value of stock option awards requires judgment, including estimating stock price volatility, forfeiture rates and expected option life. Restricted stock awards are valued based on the fair value of the stock on the grant date and the related compensation expense is recognized over the service period. Similarly, for time-based restricted stock awards subject to graded vesting, we recognize compensation cost on a straight-line basis over the requisite service period. For performance-based restricted stock units ("RSUs"), compensation expense is recognized if satisfaction of the performance condition is considered probable. We recognize forfeitures of stock-based compensation as they occur.

New Accounting Pronouncements

Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued guidance that will require companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2019. Different components of the guidance require modified retrospective or prospective adoption. This guidance does not apply to receivables arising from operating leases. As discussed in note 3 to the consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 78 percent of our total revenues for the year ended December 31, 2019). We will adopt this guidance when effective, and the impact of adoption on our financial statements is not material. The future impact of this guidance will be limited to our non-operating lease receivables, and will depend on future market conditions and forecast expectations.

Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued guidance intended to simplify the subsequent accounting for goodwill acquired in a business combination. Prior guidance required utilizing a two-step process to review goodwill for impairment. A second step was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of the reporting unit's goodwill (as if purchase accounting were performed on the testing date) with the carrying amount of the goodwill. The new guidance

---

eliminates the second step from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss should not exceed the total amount of goodwill allocated to the reporting unit). The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We will adopt this guidance when effective, and it is not expected to have a significant impact on our financial statements.

Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes. The guidance removes the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), 4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and 5) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2020. Different components of the guidance require retrospective, modified retrospective or prospective adoption, and early adoption is permitted. We are currently assessing whether we will early adopt this guidance, and the impact on our financial statements is not currently estimable.

Guidance Adopted in 2019

Leases. See note 13 to our consolidated financial statements for a discussion of our lease accounting following our adoption of an updated FASB lease accounting standard in 2019.

Revenue Recognition Accounting Standards

In May 2014, and in subsequent updates, the FASB issued guidance ("Topic 606") to clarify the principles for recognizing revenue. Topic 606 replaced Topic 605, which was the revenue recognition standard in effect through December 31, 2017, as reflected in the table below. We adopted Topic 606 on January 1, 2018. Topic 606 includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In March 2016, the FASB issued updated lease accounting guidance ("Topic 842"), as explained further in note 13 to the consolidated financial statements. We adopted Topic 842 on January 1, 2019. Topic 842 is an update to Topic 840, which was the lease accounting standard in place through December 31, 2018. As reflected below, most of our revenue is accounted for under Topic 842 (Topic 840 for 2018 and 2017). There were no significant changes to our revenue accounting upon adoption of Topic 842.

We recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 842. Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services.

Nature of goods and services

---

In the following table, revenue is summarized by type and by the applicable accounting standard.

	Year Ended December 31,
					2019												2018												2017
	Topic 842				Topic 606				Total				Topic 840				Topic 606				Total				Topic 840				Topic 605				Total
Revenues:
Owned equipment rentals	$	6,777			$	—			$	6,777			$	5,946			$	—			$	5,946			$	4,928			$	—			$	4,928
Re-rent revenue	155				—				155				138				—				138				106				—				106
Ancillary and other rental revenues:
Delivery and pick-up	—				564				564				—				477				477				—				389				389
Other	356				112				468				287				92				379				228				64				292
Total ancillary and other rental revenues	356				676				1,032				287				569				856				228				453				681
Total equipment rentals	7,288				676				7,964				6,371				569				6,940				5,262				453				5,715
Sales of rental equipment	—				831				831				—				664				664				—				550				550
Sales of new equipment	—				268				268				—				208				208				—				178				178
Contractor supplies sales	—				104				104				—				91				91				—				80				80
Service and other revenues	—				184				184				—				144				144				—				118				118
Total revenues	$	7,288			$	2,063			$	9,351			$	6,371			$	1,676			$	8,047			$	5,262			$	1,379			$	6,641

Revenues by reportable segment and geographical market are presented in note 5 of the consolidated financial statements using the revenue captions reflected in our consolidated statements of operations. The majority of our revenue is recognized in our general rentals segment and in the U.S. (for the year ended December 31, 2019, 80 percent and 91 percent of total revenues, respectively). We believe that the disaggregation of our revenue from contracts to customers as reflected above, coupled with the further discussion below and the reportable segment and geographical market disclosures in note 5, depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

Lease revenues (Topic 842)

The accounting for the types of revenue that are accounted for under Topic 842 is discussed below.

Owned equipment rentals represent our most significant revenue type (they accounted for 72 percent of total revenues for the year ended December 31, 2019) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments.

Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options.

We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply.

As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference

---

between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day).

We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842/840 and Topic 606) of $55 and $56 as of December 31, 2019 and 2018, respectively.

As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time (significantly less than a year). Lessees do not provide residual value guarantees on rented equipment.

We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment.

Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above.

“Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, and 3) charges for rented equipment that is damaged by our customers.

Revenues from contracts with customers (Topic 606)

The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time.

Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed.

“Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured).

Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable.

Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed.

Receivables and contract assets and liabilities

As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 78 percent of our total revenues for the year ended December 31, 2019). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address receivables arising from revenues from both Topic 606 (Topic 605 for 2017) and Topic 842 (Topic 840 for 2018 and 2017).

Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues in each of 2019, 2018, and 2017. Our customer with the largest receivable balance represented approximately one percent of total receivables at December 31, 2019 and 2018. We manage credit risk through credit approvals, credit limits and other monitoring procedures.

Our allowances for doubtful accounts reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when

---

they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. During the years ended December 31, 2019, 2018 and 2017, we recognized total additions, excluding acquisitions, to our allowances for doubtful accounts of $42, $45 and $40, respectively, primarily 1) as a reduction to equipment rental revenue (primarily for 2019 doubtful accounts associated with lease revenues) or 2) as bad debt expense within selling, general and administrative expenses in our consolidated statements of income.

We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the years ended December 31, 2019 and December 31, 2018 that was included in the contract liability balance as of the beginning of such periods.

Performance obligations

Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the years ended December 31, 2019 and December 31, 2018 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of December 31, 2019.

Payment terms

Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk.

Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities.

Contract costs

We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less.

Contract estimates and judgments

Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons:

•	The transaction price is generally fixed and stated in our contracts;

•	As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation;

•	Our revenues do not include material amounts of variable consideration, or result in significant obligations associated with returns, refunds or warranties; and

•	Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer.

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:

•Augmented our bundled solutions for fluid storage, transfer and treatment;

•Expanded our strategic account base; and

•Provided 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.

Accounts receivable, net of allowance for doubtful accounts (1)	$	74
Inventory	4
Rental equipment	268
Property and equipment	25
Intangibles (2)	171
Other assets	3
Total identifiable assets acquired	545
Current liabilities	(60		)
Deferred taxes	(13		)
Total liabilities assumed	(73		)
Net identifiable assets acquired	472
Goodwill (3)	248
Net assets acquired	$	720

(1) The fair value of accounts receivables acquired was $74, and the gross contractual amount was $81. We estimated that $7 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 years ended December 31, 2019 and 2018 include BakerCorp 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.

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 average OEC of 17.7 percent for the year ended December 31, 2019 (such increase also includes the impact of 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:

•Expanded our equipment rental capacity in many of the largest metropolitan areas in North America, including both U.S. coasts, the Gulf South and Ontario;

•Provided a well-diversified customer base with a balanced mix of commercial construction and industrial accounts;

•Added more mid-sized and local accounts to our customer base; and

•Provided a significant opportunity to increase revenue and enhance customer service by cross-selling to our broader customer base.

The aggregate consideration paid was approximately $2.069 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.

Accounts receivable, net of allowance for doubtful accounts (1)	$	117
Inventory	7
Rental equipment	1,078
Property and equipment	71
Intangibles (customer relationships) (2)	230
Other assets	47
Total identifiable assets acquired	1,550
Short-term debt and current maturities of long-term debt (3)	(12		)
Current liabilities	(140		)
Long-term debt (3)	(23		)
Other long-term liabilities	(4		)
Total liabilities assumed	(179		)
Net identifiable assets acquired	1,371
Goodwill (4)	698
Net assets acquired	$	2,069

(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 finance 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. $25 of goodwill is expected to be deductible for income tax purposes.

The years ended December 31, 2019 and 2018 include BlueLine 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 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 average OEC of 17.7 percent for the year ended December 31, 2019 (such increase also includes the impact of the acquisition of BakerCorp discussed above).

---

Pro forma financial information

The pro forma information below gives effect to the BakerCorp and BlueLine acquisitions as if they had been completed on January 1, 2018 (“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 table below presents unaudited pro forma consolidated income statement information as if BakerCorp and BlueLine had been included in our consolidated results for the year ended December 31, 2018.

	Year Ended
	December 31, 2018
	United Rentals				BakerCorp				BlueLine				Total
Historic/pro forma revenues	$	8,047			$	184			$	665			$	8,896
Historic/combined pretax income (loss)	1,476				(84		)		(169		)		1,223
Pro forma adjustments to pretax income (loss):
Impact of fair value mark-ups/useful life changes on depreciation (1)					(8		)		(5		)		(13		)
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2)					—				(13		)		(13		)
Intangible asset amortization (3)					(23		)		(64		)		(87		)
Interest expense (4)					(14		)		(92		)		(106		)
Elimination of historic interest (5)					30				106				136
Elimination of merger related costs (6)					67				166				233
Restructuring charges (7)					(6		)		(16		)		(22		)
Pro forma pretax income													$	1,351

(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 BakerCorp and BlueLine acquisitions.

(2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the BlueLine acquisition. 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 BakerCorp and BlueLine acquisitions were amortized.

(4) As discussed above, we issued debt to partially fund the BakerCorp and BlueLine acquisitions. Interest expense was adjusted to reflect these changes in our debt portfolio.

(5) Historic interest, including losses on repurchase/redemption of debt securities, on debt that is not part of the combined entity was eliminated.

(6) Merger related costs primarily comprised of financial and legal advisory fees associated with the BakerCorp and BlueLine acquisitions were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. The adjustment for BakerCorp includes $57 of merger related costs recognized by BakerCorp prior to the acquisition. The adjustment for BlueLine includes $142 of merger related costs recognized by BlueLine prior to the acquisition.

Our reportable segments are i) general rentals and ii) trench, power and fluid solutions. Our regions discussed below, which are our operating segments, are aggregated into our reportable segments. We believe that the regions that are aggregated into our reportable segments have similar economic characteristics, as each region is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our regions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit.

The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom

---

lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of 11 geographic regions—Carolinas, Gulf South, Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Mid Central, Midwest, Northeast, Pacific West, South, Southeast and Western Canada—and operates throughout the United States and Canada.  

The trench, power and fluid solutions segment includes the rental of specialty construction products such as i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment and iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment. The trench, power and fluid solutions segment is comprised of the following regions, each of which primarily rents the corresponding equipment type described above: i) the Trench Safety region, ii) the Power and HVAC region, iii) the Fluid Solutions region and iv) the Fluid Solutions Europe region. The trench, power and fluid solutions segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment operates throughout the United States and in Canada and Europe.

The following table presents the percentage of equipment rental revenue by equipment type for the years ended December 31, 2019, 2018 and 2017: 

	Year Ended December 31,
	2019			2018			2017
Primarily rented by our general rentals segment:
General construction and industrial equipment	43	%		44	%		43	%
Aerial work platforms	28	%		28	%		32	%
General tools and light equipment	8	%		8	%		7	%
Primarily rented by our trench, power and fluid solutions segment:
Power and HVAC equipment	8	%		8	%		7	%
Trench safety equipment	6	%		6	%		6	%
Fluid solutions equipment	7	%		6	%		5	%

 

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in note 2. Certain corporate costs, including those related to selling, finance, legal, risk management, human resources, corporate management and information technology systems, are deemed to be of an operating nature and are allocated to our segments based primarily on rental fleet size.

The following table sets forth financial information by segment as of and for the years ended December 31, 2019, 2018 and 2017:  

---

	General rentals				Trench, power and fluid solutions				Total
2019
Equipment rentals	$	6,202			$	1,762			$	7,964
Sales of rental equipment	768				63				831
Sales of new equipment	238				30				268
Contractor supplies sales	71				33				104
Service and other revenues	157				27				184
Total revenue	7,436				1,915				9,351
Depreciation and amortization expense	1,681				357				2,038
Equipment rentals gross profit	2,407				800				3,207
Capital expenditures	1,967				383				2,350
Total assets	$	16,036			$	2,934			$	18,970
2018
Equipment rentals	$	5,550			$	1,390			$	6,940
Sales of rental equipment	619				45				664
Sales of new equipment	186				22				208
Contractor supplies sales	68				23				91
Service and other revenues	127				17				144
Total revenue	6,550				1,497				8,047
Depreciation and amortization expense	1,410				261				1,671
Equipment rentals gross profit	2,293				670				2,963
Capital expenditures	1,980				311				2,291
Total assets	$	15,597			$	2,536			$	18,133
2017
Equipment rentals	$	4,727			$	988			$	5,715
Sales of rental equipment	509				41				550
Sales of new equipment	159				19				178
Contractor supplies sales	65				15				80
Service and other revenues	105				13				118
Total revenue	5,565				1,076				6,641
Depreciation and amortization expense	1,188				195				1,383
Equipment rentals gross profit	1,950				490				2,440
Capital expenditures	1,675				214				1,889
Total assets	$	13,351			$	1,679			$	15,030

Equipment rentals gross profit is the primary measure management reviews to make operating decisions and assess segment performance. The following is a reconciliation of equipment rentals gross profit to income before provision (benefit) for income taxes:

 

---

	Year Ended December 31,
	2019				2018				2017
Total equipment rentals gross profit	$	3,207			$	2,963			$	2,440
Gross profit from other lines of business	463				401				329
Selling, general and administrative expenses	(1,092		)		(1,038		)		(903		)
Merger related costs	(1		)		(36		)		(50		)
Restructuring charge	(18		)		(31		)		(50		)
Non-rental depreciation and amortization	(407		)		(308		)		(259		)
Interest expense, net	(648		)		(481		)		(464		)
Other income, net	10				6				5
Income before provision (benefit) for income taxes	$	1,514			$	1,476			$	1,048

 

We operate in the United States, Canada and Europe. As discussed in note 4 to the consolidated financial statements, in July 2018, we completed the acquisition of BakerCorp, which allowed for our entry into select European markets. Our presence in Europe is limited, and the foreign information in the table below primarily reflects Canada. The following table presents geographic area information for the years ended December 31, 2019, 2018 and 2017, except for balance sheet information, which is presented as of December 31, 2019 and 2018:

	Domestic				Foreign				Total
2019
Equipment rentals	$	7,283			$	681			$	7,964
Sales of rental equipment	757				74				831
Sales of new equipment	238				30				268
Contractor supplies sales	92				12				104
Service and other revenues	164				20				184
Total revenue	8,534				817				9,351
Rental equipment, net	8,995				792				9,787
Property and equipment, net	554				50				604
Goodwill and other intangible assets, net	$	5,592			$	457			$	6,049
2018
Equipment rentals	$	6,388			$	552			$	6,940
Sales of rental equipment	609				55				664
Sales of new equipment	184				24				208
Contractor supplies sales	80				11				91
Service and other revenues	126				18				144
Total revenue	7,387				660				8,047
Rental equipment, net	8,910				690				9,600
Property and equipment, net	559				55				614
Goodwill and other intangible assets, net	$	5,665			$	477			$	6,142
2017
Equipment rentals	$	5,253			$	462			$	5,715
Sales of rental equipment	494				56				550
Sales of new equipment	157				21				178
Contractor supplies sales	70				10				80
Service and other revenues	102				16				118
Total revenue	$	6,076			$	565			$	6,641

---

Restructuring charges primarily include severance costs associated with headcount reductions, as well as branch closure charges. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such program was initiated in 2008, we have completed four restructuring programs and have incurred total restructuring charges of $333.

Closed Restructuring Programs

Our closed restructuring programs were initiated either in recognition of a challenging economic environment or following the completion of certain significant acquisitions. As of December 31, 2019, the total liability associated with the closed restructuring programs was $11.  As of December 31, 2019, we have incurred total restructuring charges under the closed restructuring programs of $288, comprised of $171 of branch closure charges and $117 of severance and other costs.

BakerCorp/BlueLine Restructuring Program

In the third quarter of 2018, we initiated a restructuring program following the closing of the BakerCorp acquisition discussed in note 4 to the consolidated financial statements. The restructuring program also includes actions undertaken associated with the BlueLine acquisition discussed in note 4 to the consolidated financial statements. We completed this restructuring program in 2019.

The table below provides certain information concerning our restructuring charges under the BakerCorp/BlueLine restructuring program:

Description		Beginning Reserve Balance				Charged to Costs and Expenses (1)				Payments and Other				Ending Reserve Balance
Year ended December 31, 2018:
Branch closure charges		$	—			$	4			$	(1	)		$	3
Severance and other		—				18				(9		)		9
Total		$	—			$	22			$	(10	)		$	12
Year ended December 31, 2019:
Branch closure charges		$	3			$	16			$	(11	)		$	8
Severance and other		9				6				(14		)		1
Total		$	12			$	22			$	(25	)		$	9

________________

(1)

Reflected in our consolidated statements of income as “Restructuring charge” (such charge also includes activity under our other restructuring programs). The restructuring charges are not allocated to our segments.  As of December 31, 2019, we have incurred total restructuring charges under the BakerCorp/BlueLine restructuring program of $44, comprised of $20 of branch closure charges and $24 of severance and other costs.

2020-2021 Cost Savings Restructuring Program

In the fourth quarter of 2019, we initiated a restructuring program associated with the consolidation of certain common functions, the relocation of our shared-service facilities and certain other cost reduction measures. We expect to complete the restructuring program in the first half of 2021. The total costs expected to be incurred in connection with the program are not currently estimable, as we are still identifying the actions that will be undertaken. As of December 31, 2019, we have not recognized material costs under this program, and the liability balance associated with the program is not material.

Rental equipment consists of the following:

	December 31,
	2019				2018
Rental equipment	$	14,852			$	13,962
Less accumulated depreciation	(5,065		)		(4,362		)
Rental equipment, net	$	9,787			$	9,600

---

Property and equipment consist of the following:

	December 31,
	2019				2018
Land	$	101			$	103
Buildings	210				209
Non-rental vehicles	168				200
Machinery and equipment	157				135
Furniture and fixtures	328				278
Leasehold improvements	348				302
	1,312				1,227
Less accumulated depreciation and amortization	(708		)		(613		)
Property and equipment, net	$	604			$	614

The following table presents the changes in the carrying amount of goodwill for each of the three years in the period ended December 31, 2019:  

	General rentals				Trench, power and fluid solutions				Total
Balance at January 1, 2017 (1)	$	2,797			$	463			$	3,260
Goodwill related to acquisitions (2) (3)	797				8				805
Foreign currency translation and other adjustments	13				4				17
Balance at December 31, 2017 (1)	3,607				475				4,082
Goodwill related to acquisitions (2) (3)	752				247				999
Foreign currency translation and other adjustments	(17		)		(6		)		(23		)
Balance at December 31, 2018 (1)	4,342				716				5,058
Goodwill related to acquisitions (2)	10				73				83
Foreign currency translation and other adjustments	10				3				13
Balance at December 31, 2019 (1)	$	4,362			$	792			$	5,154

 

_________________

(1)	The total carrying amount of goodwill for all periods in the table above is reflected net of $1.557 billion of accumulated impairment charges, which were primarily recorded in our general rentals segment.

(2)	Includes goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period, which were not significant to our previously reported operating results or financial condition.

(3)	For additional detail on the acquisitions of BakerCorp and BlueLine in July 2018 and October 2018, respectively, which accounted for most of the 2018 goodwill related to acquisitions, see note 4 to our consolidated financial statements. The acquisitions of NES and Neff accounted for most of the 2017 goodwill related to acquisitions.

Other intangible assets were comprised of the following at December 31, 2019 and 2018:  

	December 31, 2019
	Weighted-Average Remaining Amortization Period		Gross Carrying Amount				Accumulated Amortization				Net Amount
Non-compete agreements	43 months		$	24			$	14			$	10
Customer relationships	7 years		$	2,246			$	1,364			$	882
Trade names and associated trademarks	4 years		$	5			$	2			$	3

---

 

	December 31, 2018
	Weighted-Average Remaining Amortization Period		Gross Carrying Amount				Accumulated Amortization				Net Amount
Non-compete agreements	31 months		$	24			$	16			$	8
Customer relationships	7 years		$	2,148			$	1,076			$	1,072
Trade names and associated trademarks	5 years		$	5			$	1			$	4

Amortization expense for other intangible assets was $290, $213 and $173 for the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, estimated amortization expense for other intangible assets for each of the next five years and thereafter was as follows:  

2020	$	250
2021	205
2022	160
2023	116
2024	75
Thereafter	89
Total	$	895

Accrued expenses and other liabilities consist of the following:  

	December 31,
	2019				2018
Self-insurance accruals	$	59			$	46
Accrued compensation and benefit costs	86				127
Property and income taxes payable	26				103
Restructuring reserves (1)	20				31
Interest payable	142				147
Deferred revenue (2)	55				56
National accounts accrual	87				69
Operating lease liability (3)	178				—
Other (4)	94				98
Accrued expenses and other liabilities	$	747			$	677

_________________

(1)	Primarily relates to branch closure charges and severance costs. See note 6 for additional detail.

(2)	Reflects amounts billed to customers in excess of recognizable revenue. See note 3 for additional detail.

(3)	As discussed in note 13, we adopted an updated lease accounting standard on January 1, 2019, which resulted in recognition of operating lease liabilities (the amount reflected above represents the current portion of the liability). We adopted the new standard using a transition method that does not require application to periods prior to adoption.

(4)	Other includes multiple items, none of which are individually significant.

Other long-term liabilities consist of the following:  

---

	December 31,
	2019				2018
Self-insurance accruals	$	62			$	60
Income taxes payable	14				14
Accrued compensation and benefit costs	15				9
Other long-term liabilities	$	91			$	83

As of December 31, 2019 and 2018, the amounts of our assets and liabilities that were accounted for at fair value were immaterial.

Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety:

Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than quoted prices in active markets for identical assets or liabilities include:

a) quoted prices for similar assets or liabilities in active markets;

b) quoted prices for identical or similar assets or liabilities in inactive markets;

c) inputs other than quoted prices that are observable for the asset or liability;

d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3—Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure.

Fair Value of Financial Instruments

The carrying amounts reported in our consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The fair values of our ABL, accounts receivable securitization and term loan facilities and finance/capital leases (the classification of such leases changed upon adoption of a new lease accounting standard, as explained further in note 13 to the consolidated financial statements) approximated their book values as of December 31, 2019 and 2018. The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of December 31, 2019 and 2018 have been calculated based upon available market information, and were as follows:  

Debt, net of unamortized original issue premiums and unamortized debt issuance costs, consists of the following:

 

---

	December 31,
	2019				2018
Accounts receivable securitization facility expiring 2020 (1)	$	929			$	850
$3.75 billion ABL facility expiring 2024 (1)	1,638				1,685
Term loan facility expiring 2025 (1)	979				988
4 5/8 percent Senior Secured Notes due 2023 (2)	—				994
5 3/4 percent Senior Notes due 2024 (3)	—				842
5 1/2 percent Senior Notes due 2025	795				794
4 5/8 percent Senior Notes due 2025	742				741
5 7/8 percent Senior Notes due 2026	999				999
6 1/2 percent Senior Notes due 2026	1,089				1,087
5 1/2 percent Senior Notes due 2027	992				991
3 7/8 percent Senior Secured Notes due 2027 (4)	741				—
4 7/8 percent Senior Notes due 2028 (5)	1,652				1,650
4 7/8 percent Senior Notes due 2028 (5)	4				4
5 1/4 percent Senior Notes due 2030 (6)	741				—
Finance leases (7)	127				—
Capital leases (7)	—				122
Total debt	11,428				11,747
Less short-term portion	(997		)		(903		)
Total long-term debt	$	10,431			$	10,844

 

(1)    The table below presents financial information associated with our variable rate indebtedness as of and for the year ended December 31, 2019. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation.

	ABL facility				Accounts receivable securitization facility				Term loan facility
Borrowing capacity, net of letters of credit	$	2,045			$	46			$	—
Letters of credit	56
Interest rate at December 31, 2019	3.1		%		2.6		%		3.5		%
Average month-end debt outstanding	1,601				915				993
Weighted-average interest rate on average debt outstanding	3.7		%		3.1		%		4.0		%
Maximum month-end debt outstanding	1,727				967				998

(2)	In November 2019, URNA redeemed all of its 4 5/8 percent Senior Secured Notes. Upon redemption, we recognized a loss of $29 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the redeemed notes.

(3)	In May 2019, URNA redeemed all of its 5 3/4 percent Senior Notes. Upon redemption, we recognized a loss of $32 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the redeemed notes.

(4)	In November 2019, URNA issued $750 aggregate principal amount of 3 7/8 percent Senior Secured Notes due 2027. The proceeds were primarily used to partially finance the redemption of 4 5/8 percent Senior Secured Notes discussed above. See below for additional detail on the issued debt.

(5)	URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, we consummated an exchange offer pursuant to which most of the 4 7/8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7/8 percent Senior Notes issued in August 2017.

(6)	In May 2019, URNA issued $750 aggregate principal amount of 5 1/4 percent Senior Notes due 2030. The proceeds were primarily used to partially finance the redemption of 5 3/4 percent Senior Notes discussed above. See below for additional detail on the issued debt.

---

(7)	As discussed in note 13 to the consolidated financial statements, we adopted an updated lease accounting standard on January 1, 2019. Upon adoption of the new standard, the leases that were previously classified as capital leases through December 31, 2018 were classified as finance leases. There were no significant changes to the accounting upon this change in classification.

Short-term debt

As of December 31, 2019, our short-term debt primarily reflects $929 of borrowings under our accounts receivable securitization facility. See the table above for financial information associated with the accounts receivable securitization facility.

Accounts receivable securitization facility. In 2019, the accounts receivable securitization facility was amended, primarily to extend the maturity date. The amended facility expires on June 26, 2020, has a facility size of $975, and may be extended on a 364-day basis by mutual agreement of the Company and the lenders under the facility. Borrowings under the facility are reflected as short-term debt on our consolidated balance sheets. Key provisions of the facility include the following:

•	borrowings are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves, exceeds the outstanding loans by a specified amount. As of December 31, 2019, there were $1.046 billion of receivables, net of applicable reserves, in the collateral pool;

•	the receivables in the collateral pool are the lenders’ only source of repayment;

•	upon early termination of the facility, no new amounts will be advanced under the facility and collections on the receivables securing the facility will be used to repay the outstanding borrowings; and

•	standard termination events including, without limitation, a change of control of Holdings, URNA or certain of its subsidiaries, a failure to make payments, a failure to comply with standard default, delinquency, dilution and days sales outstanding covenants, or breach of the fixed charge coverage ratio covenant under the ABL facility (if applicable).

Long-term debt

ABL facility. In June 2008, Holdings, URNA, and certain of our subsidiaries entered into a credit agreement providing for a five-year $1.25 billion ABL facility, a portion of which is available for borrowing in Canadian dollars. The ABL facility was subsequently upsized and extended, and a portion of the facility is also now available for borrowing in British Pounds and Euros by certain subsidiaries of URNA in Europe. The size of the ABL facility was $3.75 billion as of December 31, 2019. See the table above for financial information associated with the ABL facility.

The ABL facility is subject to, among other things, the terms of a borrowing base derived from the value of eligible rental equipment and eligible inventory. The borrowing base is subject to certain reserves and caps customary for financings of this type. All amounts borrowed under the credit agreement must be repaid on or before February 2024. Loans under the credit agreement bear interest, at URNA’s option: (i) in the case of loans in U.S. dollars, at a rate equal to the London interbank offered rate or an alternate base rate, in each case plus a spread, (ii) in the case of loans in Canadian dollars, at a rate equal to the Canadian prime rate or an alternate rate (Bankers' Acceptance Rate), in each case plus a spread, (iii) in the case of loans in Euros, at a rate equal to the London interbank offered rate or an alternate base rate, in each case plus a spread, or (iv) in the case of loans in British pounds, at a rate equal to the London interbank offered rate or an alternate base rate, in each case plus a spread. The interest rates under the credit agreement are subject to change based on the availability in the facility. A commitment fee accrues on any unused portion of the commitments under the credit agreement at a fixed rate per annum. Ongoing extensions of credit under the credit agreement are subject to customary conditions, including sufficient availability under the borrowing base. As discussed below (see “Loan Covenants and Compliance”), the only financial covenant that currently exists in the ABL facility is the fixed charge coverage ratio. As of December 31, 2019, availability under the ABL facility has exceeded the required threshold and, as a result, this financial covenant was inapplicable. In addition, the credit agreement contains customary negative covenants applicable to Holdings, URNA and our subsidiaries, including negative covenants that restrict the ability of such entities to, among other things, (i) incur additional indebtedness or engage in certain other types of financing transactions, (ii) allow certain liens to attach to assets, (iii) repurchase, or pay dividends or make certain other restricted payments on, capital stock and certain other securities, (iv) prepay certain indebtedness and (v) make acquisitions and investments. The U.S. dollar borrowings under the credit agreement are secured by substantially all of our assets and substantially all of the assets of certain of our U.S. subsidiaries (other than real property and certain accounts receivable). The U.S. dollar borrowings under the credit agreement are guaranteed by Holdings and by URNA and, subject to certain exceptions, our domestic subsidiaries. Borrowings under the credit agreement by URNA’s Canadian subsidiaries are also secured by substantially all the assets of URNA’s Canadian subsidiaries and supported by guarantees from the Canadian subsidiaries and from Holdings and URNA, and, subject to certain exceptions, our domestic subsidiaries. Borrowings under the credit agreement by URNA’s subsidiaries in Europe and Puerto Rico are guaranteed by Holdings, URNA, URNA’s Canadian

---

subsidiaries and, subject to certain exceptions, our domestic subsidiaries and secured by substantially all the assets of our U.S. subsidiaries (other than real property and certain accounts receivable) and substantially all the assets of URNA’s Canadian subsidiaries. Under the ABL facility, a change of control (as defined in the credit agreement) constitutes an event of default, entitling our lenders, among other things, to terminate our ABL facility and to require us to repay outstanding borrowings.

Term loan facility. In October 2018, Holdings, URNA, and certain of our subsidiaries entered into a $1 billion senior secured term loan facility. See the table above for financial information associated with the term loan facility. The term loan facility is guaranteed by Holdings and the same domestic subsidiaries that guarantee the U.S. dollar borrowings under the ABL facility. In addition, the obligations under the term loan facility are secured by first priority security interests in the same collateral that secures the U.S. dollar borrowings under the ABL facility, on a pari passu basis with the ABL facility.

The principal obligations under the term loan facility are to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the term loan facility. The term loan facility matures on October 31, 2025. Amounts drawn under the term loan facility bear annual interest, at URNA’s option, at either the London interbank offered rate plus a margin of 1.75 percent or at an alternative base rate plus a margin of 0.75 percent.

The term loan facility contains customary negative covenants applicable to URNA and its subsidiaries, including negative covenants that restrict the ability of such entities to, among other things, (i) incur additional indebtedness; (ii) incur additional liens; (iii) make dividends and other restricted payments; and (iv) engage in mergers, acquisitions and dispositions. The term loan facility does not include any financial covenants. Under the term loan facility, a change of control (as defined in the credit agreement) constitutes an event of default, entitling our lenders to, among other things, terminate the term loan facility and require us to repay outstanding loans.

5 ¹/₂ percent Senior Notes due 2025. In March 2015, URNA issued $800 aggregate principal amount of 5 ¹/₂ percent Senior Notes which are due July 15, 2025 (the “2025 5 ¹/₂ percent Notes”). The net proceeds from the issuance were approximately $792 (after deducting offering expenses). The 2025 5 ¹/₂ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 2025 5 ¹/₂ percent Notes may be redeemed on or after July 15, 2020, at specified redemption prices that range from 102.75 percent in 2020, to 100 percent in 2023 and thereafter, plus accrued and unpaid interest, if any. The indenture governing the 2025 5 ¹/₂ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) additional indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) restrictions affecting subsidiaries; (viii) transactions with affiliates and (ix) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 2025 5 ¹/₂ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

4 ⁵/₈ percent Senior Notes due 2025. In September 2017, URNA issued $750 principal amount of 4 ⁵/₈ percent Senior Notes (the “4 ⁵/₈ percent Notes”) which are due October 15, 2025. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 4 ⁵/₈ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 4 ⁵/₈ percent Notes may be redeemed on or after October 15, 2020, at specified redemption prices that range from 102.313 percent in 2020, to 100 percent in 2022 and thereafter, in each case, plus accrued and unpaid interest, if any. The indenture governing the 4 ⁵/₈ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) mergers and consolidations; (iii) sales, transfers and other dispositions of assets; (iv) dividends and other distributions, stock repurchases and redemptions and other restricted payments; and (v) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the 4 ⁵/₈ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 4 ⁵/₈ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

5 ⁷/₈ percent Senior Notes due 2026. In May 2016, URNA issued $750 aggregate principal amount of 5 ⁷/₈ percent Senior Notes (the “5 ⁷/₈ percent Notes”) which are due September 15, 2026. In February 2017, URNA issued $250 aggregate principal

---

amount of 5 ⁷/₈ percent Notes as an add-on to the existing 5 ⁷/₈ percent Notes, after which the aggregate principal amount of outstanding 5 ⁷/₈ percent Notes was $1.0 billion. The notes issued in February 2017 have identical terms, and are fungible, with the existing 5 ⁷/₈ percent Notes. The net proceeds from the issuances were approximately $999 (including the original issue premium and after deducting offering expenses). The 5 ⁷/₈ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 5 ⁷/₈ percent Notes may be redeemed on or after September 15, 2021, at specified redemption prices that range from 102.938 percent in 2021, to 100 percent in 2024 and thereafter, plus accrued and unpaid interest, if any. The indenture governing the 5 ⁷/₈ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) additional indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) restrictions affecting subsidiaries; (viii) transactions with affiliates; and (ix) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 5 ⁷/₈ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon. The carrying value of the 5 ⁷/₈ percent Notes includes the $9 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2026. The effective interest rate on the 5 ⁷/₈ percent Notes is 5.7 percent.

6 ¹/₂ percent Senior Notes due 2026. In October 2018, URNA issued $1.1 billion aggregate principal amount of 6 ¹/₂ percent Senior Notes (the “6 ¹/₂ percent Notes”) which are due December 15, 2026. The net proceeds from the issuance were approximately $1.089 billion (after deducting offering expenses). The 6 ¹/₂ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 6 ¹/₂ percent Notes may be redeemed on or after December 15, 2021, at specified redemption prices that range from 103.250 percent in 2021, to 100 percent in 2024 and thereafter, in each case, plus accrued and unpaid interest, if any. The indenture governing the 6 ¹/₂ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) mergers and consolidations; (iii) sales, transfers and other dispositions of assets; (iv) dividends and other distributions, stock repurchases and redemptions and other restricted payments; and (v) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the 6 ¹/₂ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 6 ¹/₂ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

5 ¹/₂ percent Senior Notes due 2027. In November 2016, URNA issued $750 aggregate principal amount of 5 ¹/₂ percent Senior Notes which are due May 15, 2027 (the “2027 5 ¹/₂ percent Notes”). In February 2017, URNA issued $250 aggregate principal amount of 2027 5 ¹/₂ percent Notes as an add-on to the existing 2027 5 ¹/₂ percent Notes, after which the aggregate principal amount of outstanding 2027 5 ¹/₂ percent Notes was $1.0 billion. The notes issued in February 2017 have identical terms, and are fungible, with the existing 2027 5 ¹/₂ percent Notes. The net proceeds from the issuances were approximately $991 (including the original issue premium and after deducting offering expenses). The 2027 5 ¹/₂ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 2027 5 ¹/₂ percent Notes may be redeemed on or after May 15, 2022, at specified redemption prices that range from 102.75 percent in 2022, to 100 percent in 2025 and thereafter, plus accrued and unpaid interest, if any. The indenture governing the 2027 5 ¹/₂ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) additional indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) restrictions affecting subsidiaries; (viii) transactions with affiliates; and (ix) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 2027 5 ¹/₂ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon. The carrying value of the 2027 5 ¹/₂ percent Notes includes the $3 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2027. The effective interest rate on the 2027 5 ¹/₂ percent Notes is 5.5 percent.

---

3 ⁷/₈ percent Senior Secured Notes due 2027. In November 2019, URNA issued $750 aggregate principal amount of 3 ⁷/₈ percent Senior Secured Notes (the “3 ⁷/₈ percent Notes”) which are due November 15, 2027. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 3 ⁷/₈ percent Notes are guaranteed by Holdings and certain domestic subsidiaries of URNA and are secured on a second-priority basis by liens on substantially all of URNA’s and the guarantors’ assets that secure the ABL facility and the term loan facility, subject to certain exceptions. The 3 ⁷/₈ percent Notes may be redeemed on or after November 15, 2022, at specified redemption prices that range from 101.938 percent in 2022, to 100 percent in 2025 and thereafter, in each case, plus accrued and unpaid interest, if any. In addition, at any time on or prior to November 15, 2022, up to 40 percent of the aggregate principal amount of the 3 ⁷/₈ percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 103.875 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 3 ⁷/₈ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens and (ii) mergers and consolidations, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the requirements to provide subsidiary guarantees, to give further assurances and to make an offer to repurchase the notes upon the occurrence of a change of control  will not apply to URNA and its restricted subsidiaries during any period when the 3 ⁷/₈ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 3 ⁷/₈ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

4 ⁷/₈ percent Senior Notes due 2028. In August 2017, URNA issued $925 principal amount of 4 ⁷/₈ percent Senior Notes (the “Initial 4 ⁷/₈ percent Notes”) which are due January 15, 2028. The net proceeds from the issuance were approximately $913 (after deducting offering expenses). The Initial 4 ⁷/₈ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The Initial 4 ⁷/₈ percent Notes may be redeemed on or after January 15, 2023, at specified redemption prices that range from 102.438 percent in 2023, to 100 percent in 2026 and thereafter, in each case, plus accrued and unpaid interest, if any. The indenture governing the Initial 4 ⁷/₈ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) mergers and consolidations; (iii) sales, transfers and other dispositions of assets; (iv) dividends and other distributions, stock repurchases and redemptions and other restricted payments; and (v) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the Initial 4 ⁷/₈ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding Initial 4 ⁷/₈ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

In September 2017, URNA issued $750 principal amount of 4 ⁷/₈ percent Senior Notes (the “Subsequent 4 ⁷/₈ percent Notes”) which are due January 15, 2028. The net proceeds from the issuance were approximately $743 (including the original issue premium and after deducting offering expenses). The Subsequent 4 ⁷/₈ percent Notes represent a separate a distinct series of notes from the Initial 4 ⁷/₈ percent Notes. The Subsequent 4 ⁷/₈ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The Subsequent 4 ⁷/₈ percent Notes may be redeemed on or after January 15, 2023, at specified redemption prices that range from 102.438 percent in 2023, to 100 percent in 2026 and thereafter, in each case, plus accrued and unpaid interest, if any. The indenture governing the Subsequent 4 ⁷/₈ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) mergers and consolidations; (iii) sales, transfers and other dispositions of assets; (iv) dividends and other distributions, stock repurchases and redemptions and other restricted payments; and (v) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the Subsequent 4 ⁷/₈ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding Subsequent 4 ⁷/₈ percent Notes tendered at a purchase price in cash equal to 101 percent of

---

the principal amount thereof, plus accrued and unpaid interest, if any, thereon. The effective interest rate on the Subsequent 4 ⁷/₈ percent Notes is 4.84 percent.

In December 2017, we consummated an exchange offer pursuant to which approximately $744 principal amount of Subsequent 4 ⁷/₈ percent Notes were exchanged for additional Initial 4 ⁷/₈ percent Notes issued under the indenture governing the Initial 4 ⁷/₈ percent Notes and fungible with the Initial 4 ⁷/₈ percent Notes. As of December 31, 2019, the principal amounts outstanding were $1.669 billion for the Initial 4 ⁷/₈ percent Notes and $4 for the Subsequent 4 ⁷/₈ percent Notes. The carrying value of the Initial 4 ⁷/₈ percent Notes includes $1 of the unamortized original issue premium, which is being amortized through the maturity date in 2028. The effective interest rate on the Initial 4 ⁷/₈ percent Notes is 4.86 percent.

5 ¹/₄ percent Senior Notes due 2030. In May 2019, URNA issued $750 aggregate principal amount of 5 ¹/₄ percent Senior Notes (the “5 ¹/₄ percent Notes”) which are due January 15, 2030. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 5 ¹/₄ percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 5 ¹/₄ percent Notes may be redeemed on or after January 15, 2025, at specified redemption prices that range from 102.625 percent in 2025, to 100 percent in 2028 and thereafter, in each case, plus accrued and unpaid interest, if any. In addition, at any time on or prior to January 15, 2023, up to 40 percent of the aggregate principal amount of the 5 ¹/₄ percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 105.250 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 5 ¹/₄ percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) mergers and consolidations; and (iii) dividends and other distributions, stock repurchases and redemptions and other restricted payments, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the 5 ¹/₄ percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 5 ¹/₄ percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.

Loan Covenants and Compliance

As of December 31, 2019, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization and term loan facilities and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.

The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of December 31, 2019, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility.

Maturities

Debt maturities (exclusive of any unamortized original issue premiums and unamortized debt issuance costs) for each of the next five years and thereafter at December 31, 2019 are as follows:  

---

2020	$	997
2021	40
2022	32
2023	21
2024	1,661
Thereafter	8,765
Total	$	11,516

Adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases”

In March 2016, the FASB issued guidance ("Topic 842") to increase transparency and comparability among organizations by requiring (1) recognition of lease assets and lease liabilities on the balance sheet and (2) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: (1) the lessor accounting guidance with certain changes made to the lessee accounting guidance and (2) key aspects of the lessor accounting model with revenue recognition guidance. We adopted Topic 842 at the required adoption date of January 1, 2019, using the transition method that allowed us to initially apply Topic 842 as of January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We used the package of practical expedients permitted under the transition guidance that allowed us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We additionally used, for our real estate operating leases, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. We did not recognize a material adjustment to the opening balance of retained earnings upon adoption. Because of the transition method we used to adopt Topic 842, Topic 842 was not applied to periods prior to adoption and the adoption of Topic 842 had no impact on our previously reported results.

As discussed in note 3 to the consolidated financial statements, most of our equipment rental revenues, which accounted for 85 percent of total revenues for the year ended December 31, 2019, were accounted for under the previous lease accounting standard through December 31, 2018 and are accounted for under Topic 842 following adoption. There were no significant changes to our revenue accounting upon adoption of Topic 842. See note 3 for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842).

The adoption of Topic 842 had a material impact on our consolidated balance sheet due to the recognition of right-of-use (“ROU”) assets and lease liabilities, as discussed further below. The adoption of Topic 842 did not have a material impact on our consolidated income statement (as noted above, although a significant portion of our revenue is accounted for under Topic 842 following adoption, there were no significant changes to our revenue accounting upon adoption) or our consolidated cash flow statement.

Lease Accounting

We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases.

Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options, at our sole discretion, to extend or terminate the lease that we are reasonably certain to exercise. The amount of payments associated with such options reflected in the “Maturity of lease liabilities” table below is not material. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term. The primary leases we enter into with initial terms of 12 months or less are for equipment that we rent from vendors and then rent to our customers. We generate sublease revenue from such leases

---

that we refer to as "re-rent revenue" as discussed in note 3 to the consolidated financial statements. Apart from the re-rent revenue discussed in note 3, we do not generate material sublease income.

We have lease agreements with lease and non-lease components, and, for our real estate operating leases, we account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The tables below present financial information associated with our leases. This information is only presented as of, and for the year ended, December 31, 2019 because, as noted above, we adopted Topic 842 using a transition method that does not require application to periods prior to adoption.

	Classification	December 31, 2019
Assets
Operating lease assets	Operating lease right-of-use assets	$	669
Finance lease assets	Rental equipment	286
	Less accumulated depreciation	(89		)
	Rental equipment, net	197
	Property and equipment, net:
	Non-rental vehicles	8
	Buildings	18
	Less accumulated depreciation and amortization	(15		)
	Property and equipment, net	11
Total leased assets		877
Liabilities
Current
Operating	Accrued expenses and other liabilities	178
Finance	Short-term debt and current maturities of long-term debt	58
Long-term
Operating	Operating lease liabilities	533
Finance	Long-term debt	69
Total lease liabilities		$	838

Lease cost	Classification	Year Ended December 31, 2019
Operating lease cost (1)	Cost of equipment rentals, excluding depreciation (1)	$	370
	Selling, general and administrative expenses	10
	Restructuring charge	16
Finance lease cost
Amortization of leased assets	Depreciation of rental equipment	28
	Non-rental depreciation and amortization	2
Interest on lease liabilities	Interest expense, net	6
Sublease income (2)		(157		)
Net lease cost		$	275

_________________

(1)    Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation for the year ended December 31, 2019 includes $142 of short-term lease costs associated with equipment that we rent from vendors and then rent to our customers, as discussed further above. Apart from these costs, short-term lease costs are immaterial.

(2)    Primarily reflects re-rent revenue as discussed further above.

---

Maturity of lease liabilities (as of December 31, 2019)	Operating leases (1)				Finance leases (2)
2020	$	206			$	60
2021	180				33
2022	141				24
2023	107				12
2024	73				1
Thereafter	91				6
Total	798				136
Less amount representing interest	(87		)		(9		)
Present value of lease liabilities	$	711			$	127

_________________

(1)    Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2)    The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

Lease term and discount rate	December 31, 2019
Weighted-average remaining lease term (years)
Operating leases	4.8
Finance leases	3.2
Weighted-average discount rate
Operating leases	4.7	%
Finance leases	4.0	%

Other information	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	202
Operating cash flows from finance leases	6
Financing cash flows from finance leases	47
Leased assets obtained in exchange for new operating lease liabilities	201
Leased assets obtained in exchange for new finance lease liabilities	$	55

As discussed above, we adopted Topic 842 on January 1, 2019. Topic 842 is an update to Topic 840, which was the lease accounting standard in place through December 31, 2018. Upon adoption of Topic 842, the leases that were previously classified as capital leases through December 31, 2018 were classified as finance leases. There were no significant changes to the accounting upon this change in classification. The following table presents historic financial statement information for our leases (accounted for under Topic 840) for the years ended December 31, 2018 and 2017, except for balance sheet information, which is presented as of December 31, 2018:

---

	2018				2017
Capital leases
Depreciation of rental equipment	$	22			$	21
Non-rental depreciation and amortization	1				2
Rental equipment	257
Less accumulated depreciation	(86		)
Rental equipment, net	171
Property and equipment, net:
Non-rental vehicles	6
Buildings	16
Less accumulated depreciation and amortization	(12		)
Property and equipment, net	10
Capital lease obligations	122
Operating leases
Rent expense on non-cancelable leases (1)	$	179			$	160

_________________

(1)    Rent expense on non-cancelable operating leases does not include short-term lease costs associated with equipment that we rent from vendors and then rent to our customers (which is a component of the 2019 operating lease costs under Topic 842 as reflected in the table above). Under Topic 840, rental payments under leases with terms of a month or less that were not renewed are not included in rent expense, and we excluded such expenses because of the short-term duration of the arrangements under which we rented equipment from vendors and then rented such equipment to our customers. The amount of such rentals was $121 and $94 for the years ended December 31, 2018 and 2017, respectively.

The Tax Act was enacted in December 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35 percent to 21 percent, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign earnings. We completed our accounting for the tax effects of enactment of the Tax Act in 2018. During the year ended December 31, 2017, we recognized the reasonably estimated (i) effects on our existing deferred tax balances and (ii) one-time transition tax. During the year ended December 31, 2018, we finalized the accounting for the enactment of the Tax Act. The following table presents the impact of the accounting for the enactment of the Tax Act on our provision (benefit) for income taxes for the years ended December 31, 2018 and 2017:

	Year ended December 31,
	2018				2017
Revaluation of deferred tax balances (1)	$	1			$	(746	)
One-time transition tax (2)	5				57
Total provision (benefit) for income taxes impact	$	6			$	(689	)

_________________

(1)	Reflects the revaluation of our net deferred tax liability based on a U.S. federal tax rate of 21 percent.

(2)	Reflects a one-time transition tax on our unremitted foreign earnings and profits. See below for further discussion addressing our unremitted foreign earnings and profits.

The substantial 2017 impact of the enactment of the Tax Act discussed above is reflected in the tables below. The components of the provision (benefit) for income taxes for each of the three years in the period ended December 31, 2019 are

---

as follows:

	Year ended December 31,
	2019				2018				2017
Current
Federal	$	97			$	47			$	190
Foreign	(6		)		18				15
State and local	45				58				30
	136				123				235
Deferred
Federal	185				243				(580		)
Foreign	14				3				(2		)
State and local	5				11				49
	204				257				(533		)
Total	$	340			$	380			$	(298	)

A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rates (21 percent for the years ended December 31, 2019 and 2018 and 35 percent for the year ended December 31, 2017) to the income before provision (benefit) for income taxes for each of the three years in the period ended December 31, 2019 is as follows:

	Year ended December 31,
	2019				2018				2017
Computed tax at statutory tax rate	$	318			$	310			$	367
State income taxes, net of federal tax benefit	43				54				34
Other permanent items	(20		)		6				(3		)
Enactment of the Tax Act	—				6				(689		)
Foreign tax rate differential	(1		)		4				(7		)
Total	$	340			$	380			$	(298	)

 

The components of deferred income tax assets (liabilities) are as follows:

	December 31, 2019				December 31, 2018
Reserves and allowances	$	111			$	126
Debt cancellation and other	8				11
Net operating loss and credit carryforwards	371				435
Operating lease assets (1)	182				—
Total deferred tax assets	672				572
Less: valuation allowance (2)	(43		)		(46		)
Total net deferred tax assets	629				526
Property and equipment	(2,135		)		(1,976		)
Operating lease liabilities (1)	(182		)		—
Intangibles	(199		)		(237		)
Total deferred tax liability	(2,516		)		(2,213		)
Total net deferred tax liability	$	(1,887	)		$	(1,687	)

_________________

(1)    As discussed in note 13 to the consolidated financial statements, in 2019, we adopted an updated lease accounting standard that resulted in the recognition of operating lease right-of-use assets and lease liabilities. We adopted this standard using a transition method that does not require application to periods prior to adoption.

---

(2)    Relates to foreign tax credits, state net operating loss carryforwards, and state tax credits that may not be realized.

We file income tax returns in the U.S., Canada and Europe. Without exception, we have completed our domestic and international income tax examinations, or the statute of limitations has expired in the respective jurisdictions, for years prior to 2010.

For financial reporting purposes, income before provision for income taxes for our foreign subsidiaries was $62, $71 and $48 for the years ended December 31, 2019, 2018 and 2017, respectively.

We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes have been provided on such earnings. We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and have not changed our previous indefinite reinvestment determination following the enactment of the Tax Act. We have not repatriated funds to the U.S. to satisfy domestic liquidity needs, nor do we anticipate the need to do so. The Tax Act required a one-time transition tax for deemed repatriation of accumulated undistributed earnings of certain foreign investments, and, as discussed above, we completed the accounting for the transition tax in 2018. If we determine that all or a portion of our foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. At December 31, 2019, unremitted earnings of foreign subsidiaries were $726. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.

We are subject to a number of claims and proceedings that generally arise in the ordinary conduct of our business. These matters include, but are not limited to, general liability claims (including personal injury, product liability, and property and automobile claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations and contract and real estate matters. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals included in our consolidated balance sheets for matters where we have established them, we currently believe that any liabilities ultimately resulting from these ordinary course claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Indemnification

The Company indemnifies its officers and directors pursuant to indemnification agreements and may in addition indemnify these individuals as permitted by Delaware law.

Employee Benefit Plans

We currently sponsor two defined contribution 401(k) retirement plans, which are subject to the provisions of the Employee Retirement Income Security Act of 1974. We also sponsor a deferred profit sharing plan and a registered retirement savings plan for the benefit of the full-time employees of our Canadian subsidiaries. Under these plans, we match a percentage of the participants’ contributions up to a specified amount. Company contributions to the plans were $37, $31 and $26 in the years ended December 31, 2019, 2018 and 2017, respectively.

Environmental Matters

We have 500 million authorized shares of common stock, $0.01 par value. At December 31, 2019 and 2018, there were 0.0 million and 0.5 million shares of common stock reserved for issuance pursuant to options granted under our stock option plans, respectively.

---

As of December 31, 2019, there were an aggregate of 0.9 million outstanding time and performance-based RSUs and 2.5 million shares available for grants of stock and options under our 2019 Long Term Incentive Plan.

A summary of the transactions within the Company’s stock option plans follows (shares in thousands):  

	Shares			Weighted-Average Exercise Price
Outstanding at December 31, 2018	463			27.47
Granted	—			—
Exercised	(425	)		25.51
Canceled	(1	)		22.25
Outstanding at December 31, 2019	37			50.40
Exercisable at December 31, 2019	31			$	44.85

The following table presents information associated with stock options as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017:

	2019				2018				2017
Intrinsic value of options outstanding as of December 31	$	4			$	35
Intrinsic value of options exercisable as of December 31	4				33
Intrinsic value of options exercised	45				13				6
Weighted-average grant date fair value per option	$	—			$	—			$	84.60

In addition to stock options, the Company issues time-based and performance-based RSUs to certain officers and key executives under various equity incentive plans. The RSUs automatically convert to shares of common stock on a one-for-one basis as the awards vest. The time-based RSUs typically vest over a three year vesting period beginning 12 months from the grant date and thereafter annually on the anniversary of the grant date. The performance-based RSUs vest based on the achievement of the performance conditions during the applicable performance periods (currently the calendar year). There were 493 thousand shares of common stock issued upon vesting of RSUs during 2019, net of 304 thousand shares surrendered to satisfy tax obligations. The Company measures the value of RSUs at fair value based on the closing price of the underlying common stock on the grant date. The Company amortizes the fair value of outstanding RSUs as stock-based compensation expense over the requisite service period on a straight-line basis, or sooner if the employee effectively vests upon termination of employment under certain circumstances. For performance-based RSUs, compensation expense is recognized to the extent that the satisfaction of the performance condition is considered probable.

A summary of RSUs granted follows (RSUs in thousands):

	Year Ended December 31,
	2019				2018				2017
RSUs granted	456				566				809
Weighted-average grant date price per unit	$	124.37			$	175.79			$	130.96

As of December 31, 2019, the total pretax compensation cost not yet recognized by the Company with regard to unvested RSUs was $38. The weighted-average period over which this compensation cost is expected to be recognized is 1.8 years.

A summary of RSU activity for the year ended December 31, 2019 follows (RSUs in thousands):  

	Stock Units			Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2018	649			$	116.26
Granted	456			124.37
Vested	(611	)		129.50
Forfeited	(33	)		147.91
Nonvested as of December 31, 2019	461			$	104.40

---

The total fair value of RSUs vested during the fiscal years ended December 31, 2019, 2018 and 2017 was $80, $114, and $101, respectively.

Dividend Policy. Holdings has not paid dividends on its common stock since inception. The payment of any future dividends or the authorization of stock repurchases or other recapitalizations will be determined by our Board of Directors in light of conditions then existing, including earnings, financial condition and capital requirements, financing agreements, business conditions, stock price and other factors. The terms of certain agreements governing our outstanding indebtedness contain certain limitations on our ability to move operating cash flows to Holdings and/or to pay dividends on, or effect repurchases of, our common stock. In addition, under Delaware law, dividends may only be paid out of surplus or current or prior year’s net profits.

Stockholders’ Rights Plan. Our stockholders' rights plan expired in accordance with its terms on September 27, 2011. Our Board of Directors elected not to renew or extend the plan.

 

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Full Year
For the year ended December 31, 2019 (1):
Total revenues	$	2,117			$	2,290			$	2,488			$	2,456			$	9,351
Gross profit	761				911				1,033				965				3,670
Operating income	368				529				656				599				2,152
Net income (1)	175				270				391				338				1,174
Earnings per share—basic	2.21				3.45				5.10				4.51				15.18
Earnings per share—diluted (3)	2.19				3.44				5.08				4.49				15.11
For the year ended December 31, 2018 (2):
Total revenues	$	1,734			$	1,891			$	2,116			$	2,306			$	8,047
Gross profit	646				782				938				998				3,364
Operating income	340				470				578				563				1,951
Net income (2)	183				270				333				310				1,096
Earnings per share—basic	2.18				3.22				4.05				3.84				13.26
Earnings per share—diluted (3)	2.15				3.20				4.01				3.80				13.12

 

(1)

As discussed in note 12 to our consolidated financial statements, in the fourth quarter of 2019, we issued $750 aggregate principal amount of 3 7/8 percent Senior Secured Notes due 2027 and redeemed all of our 4 5/8 percent Senior Secured Notes. Upon redemption, we recognized a loss of $29 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the redeemed notes.

(2)	The fourth quarter of 2018 included $22 of merger related costs and $16 of restructuring charges primarily associated with the BakerCorp and BlueLine acquisitions discussed in note 4 to our consolidated financial statements.

(3)	Diluted earnings per share includes the after-tax impacts of the following:

---

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Full Year
For the year ended December 31, 2019:
Merger related costs (4)	$	(0.01	)		$	—			$	—			$	—			$	(0.01	)
Merger related intangible asset amortization (5)	(0.64		)		(0.64		)		(0.63		)		(0.60		)		(2.48		)
Impact on depreciation related to acquired fleet and property and equipment (6)	(0.14		)		(0.12		)		(0.07		)		(0.05		)		(0.39		)
Impact of the fair value mark-up of acquired fleet (7)	(0.25		)		(0.15		)		(0.14		)		(0.16		)		(0.72		)
Restructuring charge (8)	(0.07		)		(0.06		)		(0.02		)		(0.03		)		(0.18		)
Asset impairment charge (9)	(0.01		)		(0.03		)		(0.02		)		0.01				(0.05		)
Loss on extinguishment of debt securities and amendment of ABL facility	—				(0.30		)		—				(0.28		)		(0.58		)
For the year ended December 31, 2018:
Merger related costs (4)	$	(0.01	)		$	(0.02	)		$	(0.09	)		$	(0.21	)		$	(0.32	)
Merger related intangible asset amortization (5)	(0.39		)		(0.37		)		(0.42		)		(0.58		)		(1.76		)
Impact on depreciation related to acquired fleet and property and equipment (6)	(0.09		)		(0.08		)		(0.02		)		—				(0.19		)
Impact of the fair value mark-up of acquired fleet (7)	(0.21		)		(0.15		)		(0.11		)		(0.11		)		(0.59		)
Restructuring charge (8)	(0.02		)		(0.03		)		(0.09		)		(0.15		)		(0.28		)

 

(4)	This reflects transaction costs associated with the NES and Neff acquisitions that were completed in 2017, and the BakerCorp and BlueLine acquisitions discussed in note 4 to our consolidated financial statements.

(5)	This reflects the amortization of the intangible assets acquired in the RSC, National Pump, NES, Neff, BakerCorp and BlueLine acquisitions.

(6)	This reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff, BakerCorp and BlueLine acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.

(7)	This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC, NES, Neff and BlueLine acquisitions and subsequently sold.

(8)	As discussed in note 6 to our consolidated financial statements, this primarily reflects severance costs and branch closure charges associated with our restructuring programs.

(9)	This reflects write-offs of leasehold improvements and other fixed assets.

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. Net income and earnings per share for 2017 include the significant impact of the enactment of the Tax Act discussed further in note 14 to the consolidated financial statements. Net income and earnings per share for 2019 and 2018 reflect a reduction in the U.S. federal statutory tax rate from 35 percent to 21 percent following enactment of the Tax Act. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands): 

---

	Year Ended December 31,
	2019				2018				2017
Numerator:
Net income available to common stockholders	$	1,174			$	1,096			$	1,346
Denominator:
Denominator for basic earnings per share—weighted-average common shares	77,341				82,652				84,599
Effect of dilutive securities:
Employee stock options	114				379				403
Restricted stock units	255				499				560
Denominator for diluted earnings per share—adjusted weighted-average common shares	77,710				83,530				85,562
Basic earnings per share	$	15.18			$	13.26			$	15.91
Diluted earnings per share	$	15.11			$	13.12			$	15.73

---

URNA is 100 percent owned by Holdings (“Parent”) and has certain outstanding indebtedness that is guaranteed by both Parent and, with the exception of its U.S. special purpose vehicle which holds receivable assets relating to the Company’s accounts receivable securitization facility (the “SPV”), all of URNA’s U.S. subsidiaries (the “guarantor subsidiaries”). Other than the guarantee by certain Canadian subsidiaries of URNA's indebtedness under the ABL facility, none of URNA’s indebtedness is guaranteed by URNA's foreign subsidiaries or the SPV (together, the “non-guarantor subsidiaries”). The receivable assets owned by the SPV have been sold or contributed by URNA to the SPV and are not available to satisfy the obligations of URNA or Parent’s other subsidiaries. The guarantor subsidiaries are all 100 percent-owned and the guarantees are made on a joint and several basis. The guarantees are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met, designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants or the notes being rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA. The guarantees are also subject to subordination provisions (to the same extent that the obligations of the issuer under the relevant notes are subordinated to other debt of the issuer) and to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws. Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that the guarantees of the guarantor subsidiaries comply with the conditions set forth in Rule 3-10 and therefore continue to utilize Rule 3-10 to present condensed consolidating financial information for Holdings, URNA, the guarantor subsidiaries and the non-guarantor subsidiaries. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information is presented.

Covenants in the ABL facility, accounts receivable securitization and term loan facilities, and the other agreements governing our debt, impose operating and financial restrictions on URNA, Parent and the guarantor subsidiaries, including limitations on the ability to make share repurchases and dividend payments. As of December 31, 2019, the amount available for distribution under the most restrictive of these covenants was $674. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of December 31, 2019, our total available capacity for making share repurchases and dividend payments, which includes URNA’s capacity to make restricted payments and the intercompany receivable balance of Parent, was $2.929 billion.

The condensed consolidating financial information of Parent and its subsidiaries is as follows:

---

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2019

 

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
ASSETS
Cash and cash equivalents	$	—			$	28			$	—			$	24			$	—			$	—			$	52
Accounts receivable, net	—				—				—				171				1,359				—				1,530
Intercompany receivable (payable)	2,255				(2,130		)		(112		)		(14		)		1				—				—
Inventory	—				108				—				12				—				—				120
Prepaid expenses and other assets	—				124				—				16				—				—				140
Total current assets	2,255				(1,870		)		(112		)		209				1,360				—				1,842
Rental equipment, net	—				8,995				—				792				—				—				9,787
Property and equipment, net	76				400				78				50				—				—				604
Investments in subsidiaries	1,509				1,636				1,069				—				—				(4,214		)		—
Goodwill	—				4,759				—				395				—				—				5,154
Other intangible assets, net	—				833				—				62				—				—				895
Operating lease right-of-use assets	—				194				403				72				—				—				669
Other long-term assets	12				7				—				—				—				—				19
Total assets	$	3,852			$	14,954			$	1,438			$	1,580			$	1,360			$	(4,214	)		$	18,970
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	—			$	66			$	—			$	2			$	929			$	—			$	997
Accounts payable	—				395				—				59				—				—				454
Accrued expenses and other liabilities	—				572				118				55				2				—				747
Total current liabilities	—				1,033				118				116				931				—				2,198
Long-term debt	—				10,402				7				22				—				—				10,431
Deferred taxes	22				1,768				—				97				—				—				1,887
Operating lease liabilities	—				151				323				59				—				—				533
Other long-term liabilities	—				91				—				—				—				—				91
Total liabilities	22				13,445				448				294				931				—				15,140
Total stockholders’ equity (deficit)	3,830				1,509				990				1,286				429				(4,214		)		3,830
Total liabilities and stockholders’ equity (deficit)	$	3,852			$	14,954			$	1,438			$	1,580			$	1,360			$	(4,214	)		$	18,970

 

---

CONDENSED CONSOLIDATING BALANCE SHEETS

December 31, 2018

 

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
ASSETS
Cash and cash equivalents	$	—			$	1			$	—			$	42			$	—			$	—			$	43
Accounts receivable, net	—				—				—				159				1,386				—				1,545
Intercompany receivable (payable)	1,534				(1,423		)		(96		)		(15		)		—				—				—
Inventory	—				96				—				13				—				—				109
Prepaid expenses and other assets	—				60				—				4				—				—				64
Total current assets	1,534				(1,266		)		(96		)		203				1,386				—				1,761
Rental equipment, net	—				8,910				—				690				—				—				9,600
Property and equipment, net	57				462				40				55				—				—				614
Investments in subsidiaries	1,826				1,646				980				—				—				(4,452		)		—
Goodwill	—				4,661				—				397				—				—				5,058
Other intangible assets, net	—				1,004				—				80				—				—				1,084
Other long-term assets	9				7				—				—				—				—				16
Total assets	$	3,426			$	15,424			$	924			$	1,425			$	1,386			$	(4,452	)		$	18,133
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1			$	50			$	—			$	2			$	850			$	—			$	903
Accounts payable	—				481				—				55				—				—				536
Accrued expenses and other liabilities	—				619				14				42				2				—				677
Total current liabilities	1				1,150				14				99				852				—				2,116
Long-term debt	—				10,778				9				57				—				—				10,844
Deferred taxes	22				1,587				—				78				—				—				1,687
Other long-term liabilities	—				83				—				—				—				—				83
Total liabilities	23				13,598				23				234				852				—				14,730
Total stockholders’ equity (deficit)	3,403				1,826				901				1,191				534				(4,452		)		3,403
Total liabilities and stockholders’ equity (deficit)	$	3,426			$	15,424			$	924			$	1,425			$	1,386			$	(4,452	)		$	18,133

 

---

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

For the Year Ended December 31, 2019

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Revenues:
Equipment rentals	$	—			$	7,282			$	—			$	681			$	1			$	—			$	7,964
Sales of rental equipment	—				757				—				74				—				—				831
Sales of new equipment	—				238				—				30				—				—				268
Contractor supplies sales	—				92				—				12				—				—				104
Service and other revenues	—				164				—				20				—				—				184
Total revenues	—				8,533				—				817				1				—				9,351
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—				2,807				—				319				—				—				3,126
Depreciation of rental equipment	—				1,490				—				141				—				—				1,631
Cost of rental equipment sales	—				477				—				41				—				—				518
Cost of new equipment sales	—				205				—				26				—				—				231
Cost of contractor supplies sales	—				65				—				8				—				—				73
Cost of service and other revenues	—				92				—				10				—				—				102
Total cost of revenues	—				5,136				—				545				—				—				5,681
Gross profit	—				3,397				—				272				1				—				3,670
Selling, general and administrative expenses	92				840				—				116				44				—				1,092
Merger related costs	—				1				—				—				—				—				1
Restructuring charge	—				19				—				(1		)		—				—				18
Non-rental depreciation and amortization	19				354				—				34				—				—				407
Operating (loss) income	(111		)		2,183				—				123				(43		)		—				2,152
Interest (income) expense, net	(68		)		686				—				—				30				—				648
Other (income) expense, net	(763		)		866				—				61				(174		)		—				(10		)
Income before provision for income taxes	720				631				—				62				101				—				1,514
Provision for income taxes	167				139				—				9				25				—				340
Income before equity in net earnings (loss) of subsidiaries	553				492				—				53				76				—				1,174
Equity in net earnings (loss) of subsidiaries	621				129				38				—				—				(788		)		—
Net income (loss)	1,174				621				38				53				76				(788		)		1,174
Other comprehensive income (loss)	51				51				50				48				—				(149		)		51
Comprehensive income (loss)	$	1,225			$	672			$	88			$	101			$	76			$	(937	)		$	1,225

 

---

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

For the Year Ended December 31, 2018  

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Revenues:
Equipment rentals	$	—			$	6,388			$	—			$	552			$	—			$	—			$	6,940
Sales of rental equipment	—				609				—				55				—				—				664
Sales of new equipment	—				184				—				24				—				—				208
Contractor supplies sales	—				80				—				11				—				—				91
Service and other revenues	—				126				—				18				—				—				144
Total revenues	—				7,387				—				660				—				—				8,047
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—				2,370				—				244				—				—				2,614
Depreciation of rental equipment	—				1,258				—				105				—				—				1,363
Cost of rental equipment sales	—				358				—				28				—				—				386
Cost of new equipment sales	—				159				—				20				—				—				179
Cost of contractor supplies sales	—				52				—				8				—				—				60
Cost of service and other revenues	—				71				—				10				—				—				81
Total cost of revenues	—				4,268				—				415				—				—				4,683
Gross profit	—				3,119				—				245				—				—				3,364
Selling, general and administrative expenses	25				860				—				96				57				—				1,038
Merger related costs	—				36				—				—				—				—				36
Restructuring charge	—				29				—				2				—				—				31
Non-rental depreciation and amortization	17				266				—				25				—				—				308
Operating (loss) income	(42		)		1,928				—				122				(57		)		—				1,951
Interest (income) expense, net	(39		)		497				—				—				24				(1		)		481
Other (income) expense, net	(657		)		742				—				51				(142		)		—				(6		)
Income before provision for income taxes	654				689				—				71				61				1				1,476
Provision for income taxes	164				181				—				20				15				—				380
Income before equity in net earnings (loss) of subsidiaries	490				508				—				51				46				1				1,096
Equity in net earnings (loss) of subsidiaries	606				98				47				—				—				(751		)		—
Net income (loss)	1,096				606				47				51				46				(750		)		1,096
Other comprehensive (loss) income	(86		)		(86		)		(82		)		(105		)		—				273				(86		)
Comprehensive income (loss)	$	1,010			$	520			$	(35	)		$	(54	)		$	46			$	(477	)		$	1,010

 

---

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

For the Year Ended December 31, 2017

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Revenues:
Equipment rentals	$	—			$	5,253			$	—			$	462			$	—			$	—			$	5,715
Sales of rental equipment	—				494				—				56				—				—				550
Sales of new equipment	—				157				—				21				—				—				178
Contractor supplies sales	—				70				—				10				—				—				80
Service and other revenues	—				102				—				16				—				—				118
Total revenues	—				6,076				—				565				—				—				6,641
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—				1,933				—				218				—				—				2,151
Depreciation of rental equipment	—				1,033				—				91				—				—				1,124
Cost of rental equipment sales	—				302				—				28				—				—				330
Cost of new equipment sales	—				134				—				18				—				—				152
Cost of contractor supplies sales	—				49				—				7				—				—				56
Cost of service and other revenues	—				51				—				8				—				—				59
Total cost of revenues	—				3,502				—				370				—				—				3,872
Gross profit	—				2,574				—				195				—				—				2,769
Selling, general and administrative expenses	103				682				—				80				38				—				903
Merger related costs	—				50				—				—				—				—				50
Restructuring charge	—				49				—				1				—				—				50
Non-rental depreciation and amortization	15				223				—				21				—				—				259
Operating (loss) income	(118		)		1,570				—				93				(38		)		—				1,507
Interest (income) expense, net	(15		)		469				3				—				12				(5		)		464
Other (income) expense, net	(543		)		596				—				45				(103		)		—				(5		)
Income (loss) before provision (benefit) for income taxes	440				505				(3		)		48				53				5				1,048
Provision (benefit) for income taxes	144				(469		)		—				12				15				—				(298		)
Income (loss) before equity in net earnings (loss) of subsidiaries	296				974				(3		)		36				38				5				1,346
Equity in net earnings (loss) of subsidiaries	1,050				76				36				—				—				(1,162		)		—
Net income (loss)	1,346				1,050				33				36				38				(1,157		)		1,346
Other comprehensive income (loss)	67				67				67				55				—				(189		)		67
Comprehensive income (loss)	$	1,413			$	1,117			$	100			$	91			$	38			$	(1,346	)		$	1,413

---

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Year Ended December 31, 2019

 

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Net cash provided by operating activities	$	34			$	2,720			$	—			$	167			$	103			$	—			$	3,024
Net cash used in investing activities	(34		)		(1,529		)		—				(147		)		—				—				(1,710		)
Net cash used in financing activities	—				(1,164		)		—				(38		)		(103		)		—				(1,305		)
Effect of foreign exchange rates	—				—				—				—				—				—				—
Net increase (decrease) in cash and cash equivalents	—				27				—				(18		)		—				—				9
Cash and cash equivalents at beginning of period	—				1				—				42				—				—				43
Cash and cash equivalents at end of period	$	—			$	28			$	—			$	24			$	—			$	—			$	52

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Year Ended December 31, 2018

 

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Net cash provided by (used in) operating activities	$	36			$	3,116			$	(1	)		$	(16	)		$	(282	)		$	—			$	2,853
Net cash used in investing activities	(36		)		(4,308		)		—				(207		)		—				—				(4,551		)
Net cash provided by (used in) financing activities	—				1,170				1				(56		)		282				—				1,397
Effect of foreign exchange rates	—				—				—				(8		)		—				—				(8		)
Net decrease in cash and cash equivalents	—				(22		)		—				(287		)		—				—				(309		)
Cash and cash equivalents at beginning of period	—				23				—				329				—				—				352
Cash and cash equivalents at end of period	$	—			$	1			$	—			$	42			$	—			$	—			$	43

---

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Year Ended December 31, 2017

 

													Non-Guarantor Subsidiaries
	Parent				URNA				Guarantor Subsidiaries				Foreign				SPV				Eliminations				Total
Net cash provided by (used in) operating activities	$	21			$	2,291			$	(3	)		$	132			$	(232	)		$	—			$	2,209
Net cash used in investing activities	(21		)		(3,554		)		—				(109		)		—				—				(3,684		)
Net cash provided by (used in) financing activities	—				1,265				3				(3		)		232				—				1,497
Effect of foreign exchange rate	—				—				—				18				—				—				18
Net increase in cash and cash equivalents	—				2				—				38				—				—				40
Cash and cash equivalents at beginning of period	—				21				—				291				—				—				312
Cash and cash equivalents at end of period	$	—			$	23			$	—			$	329			$	—			$	—			$	352

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

UNITED RENTALS, INC.

(In millions)

Description		Balance at Beginning of Period				Acquired				Charged to Costs and Expenses				Charged to Revenue				Deductions				Balance at End of Period
Year ended December 31, 2019:
Allowance for doubtful accounts		$	93			$	2			$	8		(a)	$	34		(a)	$	34		(b)	$	103
Reserve for obsolescence and shrinkage		5				4				40				—				39			(c)	10
Self-insurance reserve		106				—				180				—				165			(d)	121
Year ended December 31, 2018:
Allowance for doubtful accounts		$	68			$	14			$	45			$	—			$	34		(b)	$	93
Reserve for obsolescence and shrinkage		7				1				26				—				29			(c)	5
Self-insurance reserve		100				5				144				—				143			(d)	106
Year ended December 31, 2017:
Allowance for doubtful accounts		$	54			$	6			$	40			$	—			$	32		(b)	$	68
Reserve for obsolescence and shrinkage		3				2				20				—				18			(c)	7
Self-insurance reserve		94				6				122				—				122			(d)	100

 

The above information reflects the continuing operations of the Company for the periods presented. Additionally, because the Company has retained certain self-insurance liabilities associated with the discontinued traffic control business, those amounts have been included as well.

(a)

Amounts charged to cost and expenses reflect bad debt expenses recognized within selling, general and administrative expenses. The amounts charged to revenue primarily reflect doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue. In 2019, we adopted an updated lease accounting standard (see note 13 to the consolidated financial statements for further detail) that requires that we recognize doubtful accounts associated with lease revenues as a reduction to equipment rentals revenue. We adopted the updated lease accounting standard using a transition method that does not require application to periods prior to adoption.

(b)	Represents write-offs of accounts, net of recoveries.

(c)	Represents write-offs.

(d)	Represents payments.

---

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item  9A.	Controls and Procedures

---

---

Item  9B.	Other Information

---

Item  10.	Directors, Executive Officers and Corporate Governance

Item  11.	Executive Compensation

Item  12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item  13.	Certain Relationships and Related Transactions, and Director Independence

Item  14.	Principal Accountant Fees and Services

---

Item  15.	Exhibits and Financial Statement Schedules

---

---

---

---

---

---

---

*	Filed herewith.

**	Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act.

‡	This document is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 15(a) of this report.

---