4 unchanged sentences
We have audited the accompanying consolidated balance sheets of United Rentals, Inc.
−Removed: (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
+Added: (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
20 unchanged sentences
As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level.
−Removed: Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the significant estimations required to determine the fair value of the reporting units.
−Removed: In particular, the fair value estimates were sensitive to significant assumptions, including the discount rates, revenue growth rates, and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin, all of which are affected by expectations about future operational, rental industry market or economic conditions.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s development and review of the significant assumptions described above and review of the reasonableness of the data utilized in the Company’s valuation analysis.
−Removed: To test the fair value of the Company’s reporting units, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
+Added: Also as described in Note 2, the Company determined that the fair value of its Mobile Storage reporting unit exceeded its carrying value by eight percent.
+Added: Auditing management’s annual goodwill impairment test for the Mobile Storage reporting unit was complex and judgmental due to the significant estimations required to determine the fair value of the reporting unit.
+Added: In particular, the fair value estimates were sensitive to significant assumptions, including the discount rate and revenue growth rates, which are affected by expectations about future operational, rental industry market or economic conditions.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process for the Mobile Storage reporting unit, including controls over management’s development and review of the significant assumptions described above and review of the reasonableness of the data utilized in the Company’s valuation analysis.
+Added: To test the fair value of the Company’s Mobile Storage reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
We compared the significant assumptions used by management to current industry and economic trends, including key performance indicators, and evaluated whether changes in the company’s business would affect the significant assumptions.
−Removed: We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.
+Added: We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the Mobile Storage reporting unit that would result from changes in the assumptions.
In performing our testing, we utilized internal valuation specialists to assist us in evaluating the Company’s valuation model and related significant assumptions.
−Removed: In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.
+Added: In addition, we tested management’s reconciliation of the fair value of the reporting unit to the market capitalization of the Company.
/s/ Ernst & Young LLP
78 unchanged sentences
Fixed price diesel swaps ( 1 ) — 1
−Removed: Other comprehensive (loss) income (1) ( 93 ) ( 25 ) 40
+Added: Other comprehensive income (loss) (1) 36 ( 93 ) ( 25 )
Comprehensive income $ 2,460 $ 2,012 $ 1,361
15 unchanged sentences
Foreign currency translation adjustments ( 26 )
+Added: Fixed price diesel swaps 1
Stock compensation expense, net — 119
−Removed: Exercise of common stock options — 1
Tax withholding for share based compensation ( 34 )
−Removed: Repurchase of common stock ( 3 ) 3 ( 257 )
Balance at December 31, 2021 72 $ 1 $ 2,567 $ 7,551 42 $ ( 3,957 ) $ ( 171 )
1 unchanged sentence
Foreign currency translation adjustments ( 93 )
−Removed: Fixed price diesel swaps 1
Stock compensation expense, net — 127
Tax withholding for share based compensation ( 68 )
+Added: Repurchase of common stock ( 3 ) 3 ( 1,000 )
Balance at December 31, 2022 69 $ 1 $ 2,626 $ 9,656 45 $ ( 4,957 ) $ ( 264 )
Net income 2,424
+Added: Dividends declared (3) ( 408 )
Foreign currency translation adjustments 37
+Added: Fixed price diesel swaps ( 1 )
Stock compensation expense, net — 94
2 unchanged sentences
Balance at December 31, 2023 67 $ 1 $ 2,650 $ 11,672 48 $ ( 5,965 ) $ ( 228 )
+Added: (1) Amounts may not foot due to rounding.
(2) As of December 31, 2023, 2022 and 2021, the Accumulated Other Comprehensive Loss balance primarily reflects foreign currency translation adjustments.
+Added: (3) I n January 2023, our Board of Directors approved our first-ever quarterly dividend program (accordingly, there were no dividends declared during 2022 or 2021).
+Added: We declared dividends of $ 5.92 per share during the year ended December 31, 2023.
See accompanying notes.
19 unchanged sentences
Loss on repurchase/redemption of debt securities — 17 30
−Removed: Increase (decrease) in deferred taxes 537 268 ( 121 )
+Added: Increase in deferred taxes 35 537 268
Changes in operating assets and liabilities, net of amounts acquired:
−Removed: (Increase) decrease in accounts receivable ( 329 ) ( 300 ) 218
−Removed: (Increase) decrease in inventory ( 25 ) 9 ( 5 )
−Removed: (Increase) decrease in prepaid expenses and other assets ( 164 ) 248 ( 228 )
−Removed: Increase in accounts payable 304 307 10
+Added: Increase in accounts receivable ( 167 ) ( 329 ) ( 300 )
+Added: Decrease (increase) in inventory 19 ( 25 ) 9
+Added: Decrease (increase) in prepaid expenses and other assets 281 ( 164 ) 248
+Added: (Decrease) increase in accounts payable ( 45 ) 304 307
Increase in accrued expenses and other liabilities 85 238 87
2 unchanged sentences
Cash Flows From Investing Activities:
−Removed: Purchases of rental equipment
−Removed: ( 3,436 ) ( 2,998 ) ( 961 )
−Removed: Purchases of non-rental equipment and intangible assets ( 254 ) ( 200 ) ( 197 )
+Added: Payments for purchases of rental equipment ( 3,714 ) ( 3,436 ) ( 2,998 )
+Added: Payments for purchases of non-rental equipment and intangible assets ( 356 ) ( 254 ) ( 200 )
Proceeds from sales of rental equipment
+Added: 1,574 965 968
Proceeds from sales of non-rental equipment
13 unchanged sentences
— ( 24 ) ( 8 )
−Removed: Proceeds from the exercise of common stock options
+Added: Dividends paid ( 406 ) — —
Common stock repurchased, including tax withholdings for share based compensation ( 1,070 ) ( 1,068 ) ( 34 )
−Removed: Net cash provided by (used in) financing activities 552 ( 140 ) ( 2,293 )
+Added: Net cash (used in) provided by financing activities ( 1,474 ) 552 ( 140 )
Effect of foreign exchange rates
−Removed: Net (decrease) increase in cash and cash equivalents ( 38 ) ( 58 ) 150
+Added: Net increase (decrease) in cash and cash equivalents 257 ( 38 ) ( 58 )
Cash and cash equivalents at beginning of year
23 unchanged sentences
We consolidate variable interest entities if we are deemed the primary beneficiary of the entity.
−Removed: Global Economic Conditions and COVID-19
−Removed: Our operations are impacted by global economic conditions, including inflation, increased interest rates and supply chain constraints, and we take actions to modify our plans to address such economic conditions.
−Removed: In 2022, for example, we intentionally held back on sales of rental equipment to ensure we had sufficient capacity for our customers.
−Removed: In 2022, revenue from sales of rental equipment was largely flat year-over-year, however the number of units sold decreased approximately 17 percent year-over-year, as we held on to fleet to serve strong customer demand and to ensure greater fleet availability in the event industry supply chain challenges persist or worsen.
−Removed: While the volume of sales of rental equipment decreased year-over-year, gross margin from sales of rental equipment increased 14.2 percentage points, which primarily reflected strong pricing and improved channel mix.
−Removed: To date, our supply chain disruptions have been limited, but we may experience more severe supply chain disruptions in the future.
−Removed: Interest rates on our debt instruments have increased recently.
−Removed: For example, in November 2022, URNA issued $ 1.5 billion aggregate principal amount of senior secured notes at a 6 percent interest rate, while URNA's immediately prior issuance in August 2021 of $ 750 aggregate principal amount of senior unsecured notes was at a 3 ¾ percent interest rate.
−Removed: Additionally, the weighted average interest rates on our variable debt instruments were 3.3 percent in 2022 and 1.4 percent in 2021.
−Removed: We have experienced and are continuing to experience inflationary pressures.
−Removed: A portion of inflationary cost increases is passed on to customers.
−Removed: The most significant cost increases that are passed on to customers are for fuel and delivery, and there are other costs for which the pass through to customers is less direct, such as repairs and maintenance, and labor.
−Removed: The impact of inflation and increased interest rates may be significant in the future.
−Removed: COVID-19 was first identified in people in late 2019.
−Removed: COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization characterized COVID-19 as a pandemic.
−Removed: The COVID-19 pandemic has significantly disrupted supply chains and businesses around the world.
−Removed: Uncertainty remains regarding the potential impact of existing and emerging variant strains of COVID-19 on the operations and financial position of United Rentals, and on the global economy, which will be driven by, among other things, any resurgences in cases, the effectiveness of vaccines against COVID-19 (including against emerging variant strains), and the measures that may in the future be implemented to protect public health.
−Removed: In March 2020, we first experienced rental volume declines associated with COVID-19, and the COVID-19 impact was most pronounced in 2020.
−Removed: In 2021 and 2022, we saw evidence of a continuing recovery of activity across our end-markets.
−Removed: The health and safety of our employees and customers has been, and remains, our top priority, and we also implemented a detailed COVID-19 response plan, which we believe helped mitigate the impact of COVID-19 on our results.
−Removed: Our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Reports on Form 10-Q filed in 2021 and 2020 include detailed disclosures addressing the COVID-19 impact.
−Removed: We continue to assess the economic environment in which we operate and any developments relating to the COVID-19 pandemic, and take appropriate actions to address the economic and other challenges we face.
Summary of Significant Accounting Policies
11 unchanged sentences
Inventory is stated at the lower of cost or market.
−Removed: Cost is determined, depending on the type of inventory, using either a specific identification, weighted-average or first-in, first-out method.
+Added: Cost is determined, depending on the type of inventory, using either a specific identification or weighted-average method.
Rental Equipment
4 unchanged sentences
Rental equipment is depreciated whether or not it is out on rent.
+Added: Accounts payable as of December 31, 2023 includes $ 74 of amounts due but unpaid for purchases of rental equipment.
+Added: The net impact of accrued purchases of rental equipment was no t material for the years ended December 31, 2022 and 2021.
Property and Equipment
24 unchanged sentences
assignment of goodwill to reporting units;
−Removed: determination
−Removed: of the fair value of each reporting unit;
+Added: 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).
7 unchanged sentences
Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Mobile Storage reporting unit, had estimated fair values which exceeded their respective carrying amounts by at least 54 percent.
−Removed: As discussed in note 4 to the consolidated financial statements, in May 2021, we completed the acquisition of General Finance.
−Removed: All of the assets in the Mobile Storage reporting unit were acquired in the General Finance acquisition.
−Removed: The estimated fair value of our Mobile Storage reporting unit exceeded its carrying amounts by eight percent.
+Added: We completed the acquisition of General Finance in May 2021, and all of the assets in the Mobile Storage reporting unit were acquired in the General Finance acquisition.
+Added: The estimated fair value of our Mobile Storage reporting unit exceeded its carrying amount by eight percent.
As all of the assets in the Mobile Storage reporting unit were recorded at fair value as of the May 2021 acquisition date, we expected the percentage by which the fair value for this reporting unit exceeded the 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, 2022, we bypassed the optional qualitative assessment for each reporting unit and quantitatively compared the fair values of our reporting units with their carrying amounts.
−Removed: Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Mobile Storage and Mobile Storage International reporting units, had estimated fair values which exceeded their respective carrying amounts by at least 59 percent.
−Removed: As discussed in note 4 to the consolidated financial statements, in May 2021, we completed the acquisition of General Finance.
−Removed: All of the assets in the Mobile Storage and Mobile Storage International reporting units were acquired in the General Finance acquisition.
−Removed: The estimated fair values of our Mobile Storage and Mobile Storage International reporting units exceeded their carrying amounts by 10 percent and 17 percent, respectively.
−Removed: As all of the assets in the Mobile Storage and Mobile Storage International reporting units were recorded at fair value as of the May 2021 acquisition date, we expected the percentages by which the fair values for these reporting units exceeded the carrying values to be significantly less than the equivalent percentages determined for our other reporting units.
+Added: Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Mobile Storage reporting unit, had estimated fair values which exceeded their respective carrying amounts by at least 37 percent.
+Added: We completed the acquisition of General Finance in May 2021, and all of the assets in the Mobile Storage reporting unit were acquired in the General Finance acquisition.
+Added: The estimated fair value of our Mobile Storage reporting unit exceeded its carrying
+Added: amount by eight percent.
+Added: As all of the assets in the Mobile Storage reporting unit were recorded at fair value as of the May 2021 acquisition date, we expected the percentages by which the fair values for this reporting unit exceeded the carrying value to be significantly less than the equivalent percentages determined for our other reporting units.
Other Intangible Assets
Other intangible assets consist of non-compete agreements, customer relationships and trade names and associated trademarks.
−Removed: The non-compete agreements are being amortized on a straight-line basis over initial periods of approximately 5 years.
−Removed: The customer relationships are being amortized either using the sum of the years' digits method or on a straight-line basis over initial periods generally ranging from 5 to 15 years.
−Removed: The trade names and associated trademarks are being amortized using the sum of the years' digits method over initial periods of approximately 5 years.
+Added: The non-compete agreements are being amortized on a straight-line basis over initial periods of approximately five years.
+Added: The customer relationships are being amortized either using the sum of the years' digits method or on a straight-line basis over initial periods generally ranging from eight to 15 years.
+Added: The trade names and associated trademarks are being amortized using the sum of the years' digits method over initial periods of approximately five years.
We believe that the amortization methods used reflect the estimated pattern in which the economic benefits will be consumed.
38 unchanged sentences
These costs may include the development costs for branded content and advertising campaigns.
−Removed: Advertising expense, net of the qualified advertising reimbursements discussed below, was immaterial for the years ended December 31, 2022, 2021 and 2020.
+Added: Advertising expense, net of the qualified advertising reimbursements discussed below, was not material for the years ended December 31, 2023, 2022 and 2021.
We receive reimbursements for advertising that promotes a vendor’s products or services.
20 unchanged sentences
We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of 2020.
−Removed: In the fourth quarter of 2020, we identified cash in our foreign operations in excess of near-term working capital needs, and determined that such cash could no longer be considered indefinitely reinvested.
−Removed: As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed.
−Removed: In the fourth quarter of 2021, we identified additional cash in our foreign operations in excess of near-term working capital needs, and remitted $ 203 of cash from foreign operations (such amount represents the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs).
−Removed: The taxes recorded associated with the remitted cash were immaterial in both 2020 and 2021.
+Added: In 2021, we remitted the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs.
+Added: The taxes recorded associated with the remitted cash were immaterial.
We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested.
17 unchanged sentences
We recognize forfeitures of stock-based compensation as they occur.
+Added: New Accounting Pronouncements
+Added: Improvements to Reportable Segment Disclosures.
+Added: In November 2023, the FASB issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
+Added: Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024.
+Added: Retrospective application is required, and early adoption is permitted.
+Added: These requirements are not expected to have an impact on our financial statements, but will result in significantly expanded reportable segment disclosures.
+Added: Improvements to Income Tax Disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.
+Added: ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption.
+Added: These requirements are not expected to have an impact on our financial statements, but will impact our income tax disclosures.
+Added: Accounting Guidance Adopted in 2023
+Added: Reference Rate Reform .
+Added: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.
+Added: This guidance generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, without triggering certain accounting impacts that could be required associated with an extinguishment of the contract.
+Added: In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):
+Added: Scope, to expand the scope of this guidance to include derivatives.
+Added: In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):
+Added: Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022, to December 31, 2024.
+Added: In April 2023, our term loan facility was amended to transition to an interest rate based on the Secured Overnight Financing Rate ("SOFR").
+Added: Prior to the amendment, interest on the term loan facility reflected LIBOR plus a margin (or an alternative base rate plus a margin).
+Added: We applied the above guidance when accounting for the term loan facility amendment, and adoption of this guidance did not have a material impact on our financial statements.
+Added: As of December 31, 2023, we have no debt instruments that use LIBOR as a reference rate, and this guidance is not expected to have a material impact on our financial statements in the future.
Revenue Recognition
2 unchanged sentences
1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue).
−Removed: 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
−Removed: incentives and amounts collected on behalf of third parties.
+Added: 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.
36 unchanged sentences
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.
−Removed: The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days.
+Added: The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term
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.
32 unchanged sentences
Our largest customer accounted for less than one percent of total revenues in each of 2023, 2022, and 2021.
−Removed: Our customer with the largest receivable balance represented approximately one percent of total
−Removed: receivables at December 31, 2022 and 2021.
+Added: Our customer with the largest receivable balance represented approximately one percent of total receivables at December 31, 2023 and 2022.
We manage credit risk through credit approvals, credit limits and other monitoring procedures.
36 unchanged sentences
Our contracts do not generally include a significant financing component.
−Removed: For certain products or services and
−Removed: customer types, we require payment before the products or services are delivered to the customer.
+Added: 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.
13 unchanged sentences
We monitor and review our estimated standalone selling prices on a regular basis.
−Removed: General Finance Acquisition
−Removed: On May 25, 2021, we completed the acquisition of General Finance.
−Removed: General Finance previously operated as Pac-Van and Container King in the U.S.
−Removed: and Canada, and as Royal Wolf in Australia and New Zealand, and was a leading provider of mobile storage equipment and modular office space.
−Removed: Its network served diverse end-markets, including construction, commercial, industrial, retail, transportation, petrochemical, consumer, natural resources, governmental and education.
+Added: On December 7, 2022, we completed the acquisition of assets of Ahern Rentals, Inc.
+Added: ("Ahern Rentals"), which was accounted for as a business combination.
+Added: Ahern Rentals was the eighth largest equipment rental company in North America and served customers primarily in the construction and industrial sectors across 30 states.
The acquisition:
−Removed: • Complemented our leading positions in general construction and industrial rentals and specialty rentals, which further differentiated us through our ability to deliver value as a one-stop-shop for customers;
−Removed: • Created immediate cross-sell opportunities, and allowed us to introduce mobile storage and modular office solutions in service areas that previously were not served by General Finance;
−Removed: • Provided entry into Australia and New Zealand, with an established platform run by a seasoned management team, and with a strong growth strategy already in place.
−Removed: The aggregate consideration paid to acquire General Finance was $ 1.032 billion.
−Removed: The acquisition and related fees and expenses were funded through available cash and drawings on our senior secured asset-based revolving credit facility (“ABL facility”).
+Added: • Increased capacity in key geographies, with concentrations on both U.S.
+Added: coasts and in the Gulf region;
+Added: • Increased availability of high-demand aerial and material handling equipment for our customers;
+Added: • Created immediate cross-sell opportunities to an expanded customer base.
+Added: The aggregate consideration paid to acquire Ahern Rentals was $ 1.988 billion.
+Added: The acquisition and related fees and expenses were funded through the issuance of $ 1.5 billion principal amount of 6 percent Senior Secured Notes and drawings on our senior secured asset-based revolving credit facility (“ABL facility”).
+Added: During the year ended December 31, 2023, we recognized measurement period adjustments primarily to establish the fair values for intangible assets and lease assets and liabilities.
+Added: These adjustments resulted in a substantial reduction to goodwill versus the previously reported amount (see note 9 to the consolidated financial statements for further discussion of goodwill changes).
+Added: Non-rental depreciation and amortization for the year ended December 31, 2023 includes $ 7 of intangible asset amortization that would have been recognized in 2022 if the intangible asset values had been established as of December 31, 2022.
The following table summarizes the fair values of the assets acquired and liabilities assumed.
−Removed: Cash and cash equivalents $ 13
−Removed: Accounts receivable (1) 44
+Added: Inventory $ 20
Rental equipment 1,232
Property and equipment 186
−Removed: Intangibles (2) 123
+Added: Intangible assets (1) 428
Operating lease right-of-use assets 211
1 unchanged sentence
Total identifiable assets acquired 2,087
−Removed: Current liabilities ( 92 )
−Removed: Deferred taxes ( 118 )
+Added: Accounts payable, accrued expenses and other liabilities ( 24 )
Operating lease liabilities ( 199 )
+Added: Debt (finance leases) ( 38 )
Total liabilities assumed ( 261 )
2 unchanged sentences
Net assets acquired $ 1,988
−Removed: (1) The fair value of accounts receivables acquired was $ 44 , and the gross contractual amount was $ 50 .
−Removed: We estimated that $ 6 would be uncollectible.
(1) The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
1 unchanged sentence
Customer relationships $ 330 9
−Removed: Trade names and associated trademarks 7 5
−Removed: (3) All of the goodwill was assigned to our specialty segment.
−Removed: The level of goodwill that resulted from the acquisition is primarily reflective of General Finance's going-concern value, the value of General Finance's assembled workforce and new customer relationships expected to arise from the acquisition.
−Removed: $ 28 of goodwill is expected to be deductible for income tax purposes.
−Removed: The year ended December 31, 2021 includes General Finance acquisition-related costs which are reflected as “Merger related costs” in our consolidated statements of income.
−Removed: It is not practicable to reasonably estimate the amounts of revenue and earnings of General Finance since the acquisition date, primarily due to the movement of fleet between URI locations and the acquired General Finance locations, as well as our corporate structure and the allocation of corporate costs.
−Removed: Ahern Rentals Acquisition
−Removed: On December 7, 2022, we completed the acquisition of assets of Ahern Rentals, which was accounted for as a business combination.
−Removed: Ahern Rentals was the eighth largest equipment rental company in North America and served customers primarily in the construction and industrial sectors across 30 states.
−Removed: The acquisition is expected to:
−Removed: • Increase capacity in key geographies, with concentrations on both U.S.
−Removed: coasts and in the Gulf region;
−Removed: • Increase availability of high-demand aerial and material handling equipment for our customers;
−Removed: • Create immediate cross-sell opportunities to an expanded customer base.
−Removed: The aggregate consideration paid to acquire Ahern Rentals was $ 2.012 billion.
−Removed: The acquisition and related fees and expenses were funded through the issuance of $ 1.5 billion principal amount of 6 percent Senior Secured Notes (see note 12 to the consolidated financial statements for further information) and drawings on our ABL facility.
−Removed: The following table summarizes the net book values of the assets acquired and liabilities assumed as of the acquisition date.
−Removed: The initial accounting for the acquisition is incomplete, principally related to finalizing 1) the measurement of the acquired net working capital, 2) the valuation of the acquired rental equipment (inclusive of the completion of our usual and customary procedures to validate the existence of the acquired rental fleet) and intangible assets, 3) the impact of lease
−Removed: accounting and 4) the associated income tax considerations.
−Removed: All amounts below could change, potentially materially, as there is significant additional information that we must obtain to finalize the valuations of the assets acquired and liabilities assumed, and to establish the value of the potential intangible assets, primarily because of the proximity of the acquisition date to the balance sheet date of December 31, 2022.
−Removed: Inventory $ 44
−Removed: Rental equipment 1,352
−Removed: Property and equipment 171
−Removed: Other assets 8
−Removed: Total identifiable assets acquired 1,575
−Removed: Current liabilities ( 33 )
−Removed: Total liabilities assumed ( 33 )
−Removed: Net identifiable assets acquired 1,542
−Removed: Goodwill (1) 470
−Removed: Net assets acquired $ 2,012
−Removed: (1) Goodwill was primarily assigned to our general rentals segment.
−Removed: As noted above, we have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, primarily because of the proximity of the acquisition date to the balance sheet date of December 31, 2022.
−Removed: As such, we expect that goodwill will change materially from the amount noted above.
−Removed: Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of Ahern Rentals' going-concern value, the value of Ahern Rentals' assembled workforce and new customer relationships expected to arise from the acquisition.
−Removed: All of the goodwill is expected to be deductible for income tax purposes (because this is a purchase of assets, the goodwill that is deductible for income tax purposes equals the total acquired goodwill.
−Removed: As noted above, we expect that goodwill will change materially from the amount above).
−Removed: 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.
+Added: Non-compete agreements 98 5
+Added: (2) All of the goodwill was assigned to our general rentals segment.
+Added: The level of goodwill that resulted from the acquisition is primarily reflective of Ahern Rentals' going-concern value, the value of Ahern Rentals' assembled workforce and new customer relationships expected to arise from the acquisition.
+Added: All of the goodwill is expected to be deductible for income tax purposes (because the acquisition is a purchase of assets, the goodwill that is deductible for income tax purposes equals the total acquired goodwill).
+Added: The debt issuance costs associated with the issuance of debt to partially fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets.
+Added: Additionally, in the first quarter of 2023, we initiated a restructuring program following the closing of the Ahern Rentals acquisition, and the costs under this program are included in “Restructuring charge” in our consolidated statements of income.
+Added: The restructuring charges generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition.
It is not practicable to reasonably estimate the amounts of revenue and earnings of Ahern Rentals since the acquisition date, primarily due to the movement of fleet between URI locations and the acquired Ahern Rentals locations, as well as our corporate structure and the allocation of corporate costs.
Pro forma financial information
−Removed: The pro forma information below gives effect to 1) the General Finance acquisition as if it had been completed on January 1, 2020 and 2) the Ahern Rentals acquisition as if it had been completed on January 1, 2021.
−Removed: The tables below present unaudited pro forma consolidated income statement information as if the General Finance and Ahern Rentals acquisitions had been included in our consolidated results for the entire periods reflected.
−Removed: The pro forma information is not necessarily indicative of our revenue results had the acquisitions been completed on the above dates, nor is it necessarily indicative of our future results.
−Removed: The pro forma revenue information reflects the historic revenues of General Finance and Ahern Rentals presented in accordance with our revenue mapping, and does not include any additional revenue opportunities following the acquisitions.
−Removed: Ahern Rentals’ historic revenue only includes revenue associated with the purchased assets.
−Removed: For Ahern Rentals, pro forma revenue information is presented below but pro forma income information is not presented, as we expect that there will be material adjustments to the values of the assets acquired, including establishing the value of the potential intangible assets, and liabilities assumed, and, as such, we cannot presently provide meaningful pro forma income information.
−Removed: The acquisition measurement period for General Finance has ended and the values assigned to the General Finance assets acquired and liabilities assumed are final.
−Removed: The opening balance sheet values assigned to the Ahern Rentals assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period.
−Removed: We expect that such valuation changes could be material, primarily because of the proximity of the acquisition date to December 31, 2022.
−Removed: Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods.
−Removed: In future periods, we expect to provide pro forma revenue and income information for Ahern Rentals.
−Removed: General Finance is excluded from the 2022 presentation below because it was included in our results for the entire year ended December 31, 2022.
+Added: The pro forma information below gives effect to the Ahern Rentals acquisition as if it had been completed on January 1, 2021.
+Added: The pro forma information is not necessarily indicative of our results had the acquisition been completed on the above date, nor is it necessarily indicative of our future results.
+Added: The pro forma information reflects Ahern Rentals’ historic revenue presented in accordance with our revenue mapping, does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, and also does not reflect additional revenue opportunities following the acquisition.
+Added: The table below presents unaudited pro forma consolidated income statement information as if Ahern Rentals had been included in our consolidated results for the entire period reflected:
United Rentals historic revenues $ 11,642
−Removed: General Finance historic revenues — 144
Ahern Rentals historic revenues 827
1 unchanged sentence
United Rentals historic pretax income $ 2,802
−Removed: General Finance historic pretax income 9
+Added: Ahern Rentals historic pretax income 2
Combined pretax income 2,804
5 unchanged sentences
Elimination of historic interest (5) 53
−Removed: Elimination of merger related costs (6) 12
−Removed: Elimination of changes in the valuation of bifurcated derivatives in convertible notes (7)
+Added: Elimination of historic legal and financing costs (6) 11
Pro forma pretax income $ 2,572
________________
−Removed: (1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the General Finance acquisition.
−Removed: (2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the General Finance acquisition.
+Added: (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 Ahern Rentals acquisition.
+Added: (2) Cost of rental equipment sales was adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of rental equipment acquired in the Ahern Rentals acquisition.
(3) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets.
−Removed: (4) As discussed above, we funded the General Finance acquisition using drawings on our ABL facility.
−Removed: Interest expense was adjusted to reflect interest on the ABL facility borrowings.
+Added: (4) As discussed above, the acquisition and related fees and expenses were funded through the issuance of senior notes and drawings on our ABL facility.
+Added: Interest expense was adjusted to reflect interest on the debt used to finance the acquisition.
(5) Historic interest on debt that is not part of the combined entity was eliminated.
−Removed: The adjustment includes a debt redemption loss of $ 12 .
−Removed: (6) Merger related costs primarily comprised of financial and legal advisory fees associated with the General Finance acquisition were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date.
−Removed: The adjustment includes $ 9 of merger related costs recognized by General Finance prior to the acquisition.
−Removed: (7) General Finance historically recognized changes in the valuation of bifurcated derivatives in convertible notes in its statements of operations.
−Removed: These historic changes were eliminated because the bifurcated derivatives are not part of the combined entity.
−Removed: In addition to the General Finance and Ahern Rentals acquisitions discussed above, during 2022 and 2021, we completed a series of acquisitions which were not significant individually or in the aggregate.
−Removed: See the consolidated statements of cash flows for the total cash outflow for purchases of other companies, net of cash acquired, which includes General Finance, Ahern Rentals and the other completed acquisitions, and see note 9 to our consolidated financial statements for rollforwards showing the goodwill acquired associated with these acquisitions.
+Added: (6) Reflects legal and financing costs incurred by Ahern Rentals that do not relate to the combined entity (specifically, legal costs related to a particular lawsuit and costs related to an attempted financing).
+Added: In addition to the Ahern Rentals acquisition, during 2023 and 2022, we completed a series of acquisitions which were not significant individually or in the aggregate.
+Added: See the consolidated statements of cash flows for the total cash outflow for purchases of other companies, net of cash acquired, which includes Ahern Rentals and the other completed acquisitions, and see note 9 to our consolidated financial statements for rollforwards showing the goodwill acquired associated with these acquisitions.
Segment Information
1 unchanged sentence
In the fourth quarter of 2021, following a realignment of certain of our divisions and regions, and changes in leadership roles and responsibilities, we updated our analysis of operating segments and concluded that our divisions represent our operating segments.
−Removed: Prior to the fourth quarter of 2021, our regions
−Removed: were our operating segments.
+Added: Prior to the fourth quarter of 2021, our regions were our operating segments.
While this update reflects a change in operating segments, it did not result in any changes to the rental locations in each reportable segment, and, as a result, there were no changes to the historically reported segment financial information.
+Added: Our determination of the operating segments is primarily based on geography, but also includes consideration of the offered products and services.
As noted below, we evaluate segment performance primarily based on segment equipment rentals gross profit.
9 unchanged sentences
The general rentals segment reflects the aggregation of four geographic divisions—Central, Northeast, Southeast and West—and operates throughout the United States and Canada.
−Removed: The specialty segment, which, as noted above, is a single division that is both an operating segment and a reportable 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, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and iv) mobile storage equipment and modular office space.
+Added: The specialty segment, which, as noted above, is a single division that is both an operating segment and a reportable segment, rents products (and provides setup and other services on such rented equipment) including 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, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and iv) mobile storage equipment and modular office space.
The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies.
11 unchanged sentences
Power and HVAC equipment
+Added: 10 % 10 % 9 %
Trench safety equipment
1 unchanged sentence
Mobile storage equipment and modular office space
−Removed: ________________
−Removed: (1) As discussed in note 4 to the consolidated financial statements, in May 2021, we completed the acquisition of General Finance, which was a leading provider of mobile storage equipment and modular office space.
−Removed: Prior to the General Finance acquisition, we did not rent material amounts of such equipment.
The accounting policies for our segments are the same as those described in the summary of significant accounting policies in note 2.
50 unchanged sentences
___________________
−Removed: (1) Reflects transaction costs associated with the General Finance acquisition discussed in note 4 to the consolidated financial statements.
+Added: (1) Reflects transaction costs associated with the General Finance acquisition that was completed in May 2021.
Merger related costs only include costs associated with major acquisitions that significantly impact our operations.
−Removed: (2) Primarily relates to branch closure charges and severance costs associated with our closed restructuring programs.
+Added: (2) Primarily relates to branch closure charges and severance costs associated with our restructuring programs.
As of December 31, 2023, there were no open restructuring programs.
36 unchanged sentences
_________________
−Removed: (1) Reflects refundable deposits on expected purchases, primarily of rental equipment, pursuant to advanced purchase agreements.
+Added: (1) Reflects refundable deposits on expected purchases, primarily of rental equipment, pursuant to advance purchase agreements.
Such deposits are presented as a component of cash flows from operations when paid.
1 unchanged sentence
See note 2 ("Advertising Expense") for further detail.
−Removed: (3) The year-over-year increase in the income tax assets primarily relates to tax depreciation benefits associated with the Ahern Rentals acquisition discussed in note 4 to the consolidated financial statements.
+Added: (3) Primarily relates to tax depreciation benefits associated with the Ahern Rentals acquisition discussed in note 4 to the consolidated financial statements.
The tax depreciation deductions generated by the Ahern Rentals acquisition resulted in an income tax receivable associated with U.S.
−Removed: federal and state tax payments made prior to the acquisition (we expect that this receivable will reduce the cash paid for income taxes in 2023).
+Added: federal and state tax payments made prior to the acquisition.
+Added: The decrease reflected above from December 31, 2022 to December 31, 2023 reflects the use of a portion of the receivable to reduce cash paid for income taxes.
(4) Includes multiple items, none of which are individually significant.
6 unchanged sentences
Rental equipment, net $ 14,001 $ 13,277
−Removed: _________________
−Removed: (1) Disciplined management of capital expenditures and fleet capacity is a component of our COVID-19 response plan.
−Removed: In 2020, when we significantly reduced capital expenditures largely due to COVID-19, net rental equipment declined $ 1.082 billion.
−Removed: Capital expenditures in 2022 and 2021 have exceeded historic (pre-COVID-19) levels.
−Removed: The increase in net rental equipment in 2022 primarily reflects net rental capital expenditures (purchases of rental equipment less proceeds from sales of rental equipment) that exceeded historic levels, as well as the impact of the Ahern Rentals acquisition discussed in note 4 to the consolidated financial statements.
−Removed: Net rental capital expenditures were $ 2.471 billion, $ 2.030 billion and $ 103 in 2022, 2021 and 2020, respectively.
Property and Equipment
23 unchanged sentences
(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.
−Removed: (3) For additional detail on the May 2021 acquisition of General Finance, which was assigned to our specialty segment and accounted for most of the goodwill related to acquisitions in 2021, and on the December 2022 acquisition of Ahern Rentals, which was primarily assigned to our general rentals segment and accounted for most of the goodwill related to acquisitions in 2022, see note 4 to our consolidated financial statements.
−Removed: The negative goodwill related to acquisitions for the Specialty segment in 2022 primarily reflects measurement period adjustments associated with the General Finance acquisition, partially offset by other acquisition activity.
+Added: Decreases in goodwill related to acquisitions above primarily reflect such measurement period adjustments.
+Added: (3) For additional detail on the December 2022 acquisition of Ahern Rentals, which was assigned to our general rentals segment and accounted for most of the goodwill related to acquisitions in 2022, see note 4 to our consolidated financial statements.
+Added: The decrease in goodwill related to acquisitions for the general rentals segment in 2023 primarily reflects measurement period adjustments associated with the Ahern Rentals acquisition, partially offset by other acquisition activity.
Other intangible assets were comprised of the following at December 31, 2023 and 2022:
14 unchanged sentences
Trade names and associated trademarks 3 years $ 14 $ 9 $ 5
−Removed: As discussed in note 4 to our consolidated financial statements, on December 7, 2022, we completed the acquisition of Ahern Rentals.
−Removed: We have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, and to establish the value of the potential intangible assets, primarily because of the proximity of the acquisition date to the balance sheet date of December 31, 2022.
−Removed: As such, we have not yet recorded, as of December 31, 2022, any intangible assets associated with the acquisition.
+Added: Our other intangibles assets, net at December 31, 2023 include the assets set forth in the table below associated with the acquisition of Ahern Rentals that is discussed in note 4 to our consolidated financial statements.
+Added: No residual value has been assigned to these assets.
+Added: The non-compete agreements are being amortized on a straight-line basis and the customer relationships are being amortized using the sum of the years' digits method, and we believe that such methods best reflect the estimated pattern in which the economic benefits will be consumed.
+Added: December 31, 2023
+Added: Weighted-Average Remaining
+Added: Amortization Period Net Carrying
+Added: Non-compete agreements 4 years 77
+Added: Customer relationships 8 years 259
Amortization expense for other intangible assets was $ 271 , $ 219 and $ 233 for the years ended December 31, 2023, 2022 and 2021, respectively.
37 unchanged sentences
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.
−Removed: The fair values of our variable rate debt facilities and finance leases approximated their book values as of December 31, 2022 and 2021.
+Added: The fair values of our variable rate debt facilities and finance leases approximated their book values as of December 31, 2023
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, 2023 and 2022 have been calculated based upon available market information, and were as follows:
20 unchanged sentences
(1) The table below presents financial information associated with our variable rate indebtedness as of and for the year ended December 31, 2023.
−Removed: The repurchase facility is discussed further below (see "Short-term debt-Repurchase facility").
There is no borrowing capacity under the repurchase facility because it is an uncommitted facility.
12 unchanged sentences
1,848 1,300 958 100
−Removed: The maximum outstanding debt under the ABL facility exceeded the average outstanding debt primarily due to the use of borrowings under the ABL facility to fund the partial redemption of the 5 1 / 2 percent Senior Notes discussed below.
−Removed: (2) In May 2022, URNA redeemed $ 500 principal amount of its 5 1 / 2 percent Senior Notes.
−Removed: Upon redemption, we recognized a loss of $ 16 , which reflected the difference between the net carrying amount and the total purchase price of the redeemed notes.
(2) URNA separately issued 4 7 / 8 percent Senior Notes in August 2017 and in September 2017.
−Removed: Following the issuances, URNA 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.
+Added: Following the issuances, URNA consummated an exchange offer pursuant to which most of the 4 7 / 8 percent Senior Notes issued in September
+Added: 2017 were exchanged for additional notes fungible with the 4 7 / 8 percent Senior Notes issued in August 2017.
As of December 31, 2023, the total above is comprised of two separate 4 7 / 8 percent Senior Notes, one with a book value of $ 1.661 billion and one with a book value of $ 4 .
−Removed: (4) In November 2022, URNA issued $ 1.5 billion aggregate principal amount of 6 percent Senior Secured Notes due 2029.
−Removed: See below for additional detail on the issued debt.
−Removed: (5) As of December 31, 2022, short-term debt primarily reflected borrowings under the repurchase facility that is discussed further below and the short-term portion of our finance leases.
−Removed: As of December 31, 2021, short-term debt primarily reflected borrowings under our accounts receivable securitization facility.
−Removed: In June 2022, the accounts receivable securitization facility was extended to June 2024, and it was not a short-term debt instrument as of December 31, 2022.
+Added: (3) As of December 31, 2023, short-term debt primarily reflected borrowings under the accounts receivable securitization and repurchase facilities and the short-term portion of our finance leases.
+Added: As of December 31, 2022, short-term debt primarily reflected borrowings under the repurchase facility and the short-term portion of our finance leases.
+Added: The accounts receivable securitization facility, which expires on June 24, 2024 and may be extended on a 364 -day basis by mutual agreement with the purchasers under the facility, was not a short-term debt instrument as of December 31, 2022.
The weighted average interest rates on our short-term debt, excluding finance leases, were 6.4 percent and 5.4 percent as of December 31, 2023 and 2022, respectively.
−Removed: The increase in the weighted average interest rate on the short-term debt primarily reflects rising interest rates (see note 1 to the consolidated financial statements for a discussion of global economic conditions) and changes in the composition of short-term debt (as of December 31, 2022, short-term debt primarily reflected borrowings under the repurchase facility, while short-term debt at December 31, 2021 primarily reflected borrowings under the accounts receivable securitization facility).
See note 13 to the consolidated financial statements for further discussion on our finance leases.
Short-term debt
−Removed: As of December 31, 2022, our short-term debt primarily reflects borrowings under the repurchase facility and the short-term portion of our finance leases.
+Added: As of December 31, 2023, our short-term debt primarily reflects borrowings under the repurchase and accounts receivable securitization facilities and the short-term portion of our finance leases.
Repurchase facility.
1 unchanged sentence
special purpose vehicle which holds receivable assets relating to our accounts receivable securitization facility.
+Added: In 2023, the repurchase facility was amended, primarily to extend the maturity date to June 14, 2024, which may be further extended by the mutual consent of the parties to the repurchase facility agreement.
+Added: Additionally, the repurchase facility was amended to replace an interest rate based on SOFR with an interest rate based on the Bloomberg Short Term Bank Yield Index ("BSBY").
Any repurchase transaction will have a one-month maturity unless terminated earlier as a result of a termination event under the accounts receivable securitization facility or the occurrence of any other event of default under the repurchase facility.
The Company will guarantee the obligations of URNA under the repurchase facility.
−Removed: The repurchase facility is scheduled to expire on June 23, 2023 unless extended by the mutual consent of the parties to the Repurchase Facility agreement.
−Removed: Long-term debt
+Added: See the table above for financial information associated with the repurchase facility.
Accounts receivable securitization facility .
−Removed: In 2022, the accounts receivable securitization facility was amended, primarily to increase the facility size, extend the maturity date and transition to an interest rate based on the Secured Overnight Financing Rate ("SOFR").
−Removed: The facility expires on June 24, 2024, may be extended on a 364 -day basis by mutual agreement with the purchasers under the facility and has a facility size of $ 1.1 billion.
+Added: The accounts receivable securitization facility expires on June 24, 2024 and may be extended on a 364 -day basis by mutual agreement with the purchasers under the facility.
+Added: Borrowings under the accounts receivable securitization facility bear interest based on SOFR.
+Added: In 2023, the accounts receivable securitization facility was amended, primarily to increase the facility size to $ 1.3 billion.
Key provisions of the facility include the following:
5 unchanged sentences
See the table above for financial information associated with the accounts receivable securitization facility.
+Added: Long-term debt
ABL facility.
8 unchanged sentences
(i) in the case of loans in U.S.
−Removed: dollars, at a rate equal to the term SOFR or daily SOFR (in each case plus a 0.10 percent credit margin adjustment) 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 Euro interbank offered rate or an alternate base rate, in each case plus a spread, (iv) in the case of loans in British pounds, at a rate equal to the daily simple Sterling Overnight Interbank Average or an alternate base rate, in each case plus a spread or (v) in the case of loans in Australian Dollars or New Zealand Dollars, at a rate equal to the applicable bank bill rate or an alternate base rate, in each case plus a spread.
+Added: dollars, at a rate equal to the term SOFR or daily SOFR (in each case plus a 0.10 percent credit margin adjustment) 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 Euro interbank offered rate or an alternate base
+Added: rate, in each case plus a spread, (iv) in the case of loans in British pounds, at a rate equal to the daily simple Sterling Overnight Interbank Average or an alternate base rate, in each case plus a spread or (v) in the case of loans in Australian Dollars or New Zealand Dollars, at a rate equal to the applicable bank bill 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.
18 unchanged sentences
The term loan facility matures on October 31, 2025.
−Removed: 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.
+Added: In 2023, the term loan facility was amended to transition to an interest rate based on SOFR.
+Added: Prior to the amendment, interest on the term loan facility reflected LIBOR plus a margin (or an alternative base rate plus a margin).
+Added: LIBOR has been discontinued as a reference rate as a result of reference rate reform, and the amendment of the term loan facility did not have a material impact on our financial statements.
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;
−Removed: (ii) incur additional
+Added: (ii) incur additional liens;
(iii) make dividends and other restricted payments;
5 unchanged sentences
In February 2017, URNA issued $ 250 aggregate principal amount of 5 1 / 2 percent Notes as an add-on to the existing 5 1 / 2 percent Notes.
−Removed: As noted above, in May 2022, URNA redeemed $ 500 principal amount of the 5 1 / 2 percent Notes, and the aggregate principal amount of outstanding 5 1 / 2 percent Notes was $ 500 as of December 31, 2022.
+Added: In May 2022, URNA redeemed $ 500 principal amount of the 5 1 / 2 percent Notes, and the aggregate principal amount of outstanding 5 1 / 2 percent Notes was $ 500 as of December 31, 2023.
The notes issued in February 2017 have identical terms, and are fungible, with the existing 5 1 / 2 percent Notes.
11 unchanged sentences
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.
−Removed: 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 / 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.
+Added: 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
+Added: the then-outstanding 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 5 1 / 2 percent Notes includes the $ 1 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.
19 unchanged sentences
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.
−Removed: 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
−Removed: 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.
+Added: 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.
9 unchanged sentences
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.
−Removed: 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.
+Added: 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,
+Added: 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.
16 unchanged sentences
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.
−Removed: The 5 1 / 4 percent Notes are unsecured and are guaranteed by
−Removed: Holdings and certain domestic subsidiaries of URNA.
+Added: 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.
8 unchanged sentences
In February 2020, URNA issued $ 750 aggregate principal amount of 4 percent Notes which are due July 15, 2030.
−Removed: The 4 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA.
+Added: The 4 percent Notes are unsecured and are guaranteed by Holdings and certain domestic
+Added: subsidiaries of URNA.
The 4 percent Notes may be redeemed on or after July 15, 2025, at specified redemption prices that range from 102.000 percent in 2025, to 100 percent in 2028 and thereafter, in each case, plus accrued and unpaid interest, if any.
16 unchanged sentences
The 3 3 / 4 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA.
−Removed: The 3 3 / 4 percent Notes may be redeemed on or after July 15, 2026, at specified redemption prices that range from 101.875 percent in 2026, to 100 percent in 2029 and thereafter, in each
−Removed: case, plus accrued and unpaid interest, if any.
+Added: The 3 3 / 4 percent Notes may be redeemed on or after July 15, 2026, at specified redemption prices that range from 101.875 percent in 2026, to 100 percent in 2029 and thereafter, in each case, plus accrued and unpaid interest, if any.
In addition, at any time on or prior to July 30, 2024, up to 40 percent of the aggregate principal amount of the 3 3 / 4 percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 103.750 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any.
13 unchanged sentences
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.
+Added: Covenants in the agreements governing our ABL facility, term loan facility and certain other debt instruments impose limitations on our ability to make share repurchases and dividend payments, subject to important exceptions that would allow us to make such repurchases or payments under certain conditions.
+Added: Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of December 31, 2023, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
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, 2023 are as follows:
9 unchanged sentences
Operating leases result in the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet.
−Removed: ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease
+Added: 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.
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Total lease liabilities $ 1,336 $ 976
+Added: _________________
+Added: (1) The increases in 2023 include the impact of the Ahern Rentals acquisition discussed in note 4 to the consolidated financial statements.
Lease cost Classification Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021
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Apart from these costs, short-term lease costs are immaterial.
+Added: (2) The increase in 2023 reflects the impact of a restructuring program initiated following the closing of the Ahern Rentals acquisition.
(3) Primarily reflects re-rent revenue as discussed further above.
24 unchanged sentences
_________________
−Removed: (1) The increase in 2021 includes the impact of the General Finance acquisition discussed in note 4 to the consolidated financial statements.
+Added: (1) The increases in 2023 include the impact of the Ahern Rentals acquisition discussed in note 4 to the consolidated financial statements.
The components of the provision (benefit) for income taxes for each of the three years in the period ended December 31, 2023 are as follows:
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State and local 17 28 ( 6 )
−Removed: 537 268 ( 121 )
Total $ 787 $ 697 $ 460
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_________________
−Removed: (1) Relates to the limitation of deductible interest, and is primarily due to tax depreciation benefits associated with the Ahern Rentals acquisition (see note 6 to the consolidated financial statements for further detail).
+Added: (1) Relates to the limitation of deductible interest, and is primarily due to tax depreciation benefits associated with the Ahern Rentals acquisition (see note 6 to the consolidated financial statements for further discussion of the tax depreciation benefits).
(2) Relates to federal foreign tax credits, state net operating loss carryforwards and state tax credits that may not be realized.
+Added: The following table summarizes the activity related to unrecognized tax benefits, some of which would impact our effective tax rate if recognized:
+Added: 2023 2022 2021
+Added: Balance at January 1 $ 16 $ 13 $ 12
+Added: Additions for tax positions related to the current year 3 1 2
+Added: Additions for tax positions of prior years 8 7 —
+Added: Settlements ( 1 ) ( 5 ) ( 1 )
+Added: Balance at December 31 $ 26 $ 16 $ 13
+Added: We include interest accrued on the underpayment of income taxes in interest expense, net, and penalties, if any, related to unrecognized tax benefits in selling, general and administrative expense.
+Added: The amounts of such interest or penalties were no t material (approximately $1 or less) in each of the years ended December 31, 2023, 2022 and 2021.
+Added: We believe that it is reasonably possible that a decrease of up to $ 10 in federal and state unrecognized tax benefits may be necessary within the next year, as a result of settlements.
We file income tax returns in the U.S., Canada and Europe.
2 unchanged sentences
We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of 2020.
−Removed: In the fourth quarter of 2020, we identified cash in our foreign operations in excess of near-term working capital needs, and determined that such cash could no longer be considered indefinitely reinvested.
−Removed: As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed.
−Removed: In the fourth quarter of 2021, we identified additional cash in our foreign operations in excess of near-term working capital needs, and remitted $ 203 of cash from foreign operations (such amount represents the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs).
−Removed: The taxes recorded associated with the remitted cash were immaterial in both 2020 and 2021.
+Added: In 2021, we remitted the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs.
+Added: The taxes recorded associated with the remitted cash were immaterial.
We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested.
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state income taxes.
−Removed: At December 31, 2022, unremitted earnings of foreign subsidiaries were $ 875 .
+Added: At December 31, 2023, unremitted earnings of foreign subsidiaries were $ 1.276 billion.
Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.
−Removed: We have net operating loss carryforwards (“NOLs”) of $ 344 for federal income tax purposes, $ 201 of which will expire in 2036 and 2037 (while the remaining federal NOLs have an indefinite life), $ 3 for foreign income tax purposes that expire from 2024 through 2030 and $ 659 for state income tax purposes that expire from 2023 through 2034.
+Added: We have net operating loss carryforwards (“NOLs”) of $ 57 for federal income tax purposes, $ 10 of which will expire in 2037 (while the remaining federal NOLs have an indefinite life), $ 15 for foreign income tax purposes (the majority of which has an indefinite life) and $ 425 for state income tax purposes that expire from 2024 through 2034.
+Added: The European Union (“EU”) member states formally adopted the EU’s Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15 percent minimum effective tax rate for multinational enterprises, in every jurisdiction in which they operate.
+Added: While we do not anticipate that this will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate.
Commitments and Contingencies
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Dividend Policy .
−Removed: Holdings has not paid dividends on its common stock since inception.
−Removed: As discussed in note 19 to the consolidated financial statements, our Board of Directors approved a quarterly dividend program in January 2023, and the first such dividend under the program is payable in February 2023.
+Added: Our Board of Directors approved a quarterly dividend program in January 2023, and the first such dividend under the program was paid in February 2023.
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.
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Earnings per share—diluted (3) 5.05 6.90 8.66 9.15 29.65
−Removed: (1) As discussed in note 1 to the consolidated financial statements, COVID-19 has significantly disrupted supply chains and businesses around the world.
−Removed: We began to experience a decline in revenues in March 2020, when rental volume declined in response to shelter-in-place orders and other market restrictions.
−Removed: The volume declines were most pronounced in 2020.
−Removed: Beginning in 2021 and continuing through 2022, we have seen evidence of a continuing recovery of activity across our end-markets.
−Removed: (2) As discussed in note 12 to the consolidated financial statements, in the fourth quarter of 2022, we issued $ 1.5 billion principal amount of 6 percent Senior Secured Notes due 2029.
−Removed: The issued debt, together with drawings on our ABL facility, was used to fund the December 2022 Ahern Rentals acquisition that is discussed in note 4 to the consolidated financial statements.
+Added: (1) Beginning in 2021 and continuing through 2023, we have experienced broad-based strength of demand across our end-markets.
+Added: The revenue increases above reflect this strong demand, as well as the impact of the December 2022 Ahern Rentals acquisition that is discussed in note 4 to the consolidated financial statements.
(2) There were no unusual or infrequently occurring items recognized in the fourth quarter of 2023 that had a material impact on our financial statements.
+Added: In the fourth quarter of 2022, we issued $ 1.5 billion principal amount of 6 percent Senior Secured Notes due 2029.
+Added: The issued debt, together with drawings on our ABL facility, was used to fund the December 2022 Ahern Rentals acquisition that is discussed in note 4 to the consolidated financial statements.
(3) Diluted earnings per share includes the after-tax impacts of the following:
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Restructuring charge (7) ( 0.02 ) ( 0.20 ) ( 0.05 ) ( 0.04 ) ( 0.31 )
−Removed: Asset impairment charge (8) — ( 0.02 ) ( 0.01 ) — ( 0.03 )
−Removed: Loss on repurchase/redemption of debt securities (9) — ( 0.18 ) — — ( 0.18 )
For the year ended December 31, 2022:
−Removed: Merger related costs (10) $ — $ ( 0.03 ) $ — $ — $ ( 0.03 )
Merger related intangible asset amortization (4) $ ( 0.52 ) $ ( 0.45 ) $ ( 0.44 ) $ ( 0.39 ) $ ( 1.79 )
5 unchanged sentences
(4) This reflects the amortization of the intangible assets acquired in the major acquisitions that significantly impact our operations (the "major acquisitions," each of which had annual revenues of over $ 200 prior to acquisition).
+Added: The increases in 2023 primarily reflect the impact of the Ahern Rentals acquisition.
(5) This reflects the impact of extending the useful lives of equipment acquired in certain major acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.
+Added: The increases in 2023 primarily reflect the impact of the Ahern Rentals acquisition.
(6) This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold.
+Added: The increases in 2023 primarily reflect the impact of the Ahern Rentals acquisition.
(7) This primarily reflects severance costs and branch closure charges associated with our restructuring programs.
+Added: The increases in 2023 reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.
As of December 31, 2023, there were no open restructuring programs.
1 unchanged sentence
(9) Reflects the difference between the net carrying amount and the total purchase price of the redeemed notes.
−Removed: (10) This reflects transaction costs associated with the General Finance acquisition discussed in note 4 to our consolidated financial statements.
−Removed: Merger related costs only include costs associated with major acquisitions.
Earnings Per Share
12 unchanged sentences
Diluted earnings per share $ 35.28 $ 29.65 $ 19.04
−Removed: Subsequent Events
−Removed: Our Board of Directors approved a quarterly dividend program on January 25, 2023.
−Removed: Under the program, subject to quarterly approval and declaration by the Board of Directors, dividends will be payable on the fourth Wednesday of the second month of each calendar quarter to stockholders of record as of the second Wednesday of that same month.
−Removed: The Board of Directors has declared a quarterly dividend of $ 1.48 (actual dollars) per share, payable on February 22, 2023 to stockholders of record as of the close of business on February 8, 2023.
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
25 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.