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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 ___________________________________
FORM 10-Q

x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 2017
2020
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-14387
Commission File Number 1-13663
___________________________________ 
United Rentals, Inc.
United Rentals (North America), Inc.
(Exact Names of Registrants as Specified in Their Charters)
 ___________________________________
Delaware
Delaware
06-1522496
86-0933835
Delaware86-0933835
(States of Incorporation)(I.R.S. Employer Identification Nos.)
100 First Stamford Place, Suite 700
Stamford, Connecticut
06902
Stamford
Connecticut06902
(Address of Principal Executive Offices)(Zip Code)
Registrants’ Telephone Number, Including Area Code: (203) 622-3131
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par value, of United Rentals, Inc.URINew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    o  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filerx☒Accelerated Filero☐
Non-Accelerated Filero☐Smaller Reporting Companyo☐
Emerging Growth Companyo☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    o☐Yes    x   No
As of October 16, 2017,July 27, 2020, there were 84,574,58972,080,277 shares of United Rentals, Inc. common stock, $0.01 par value, outstanding. There is no market for the common stock of United Rentals (North America), Inc., all outstanding shares of which are owned by United Rentals, Inc.

This combined Form 10-Q is separately filed by (i) United Rentals, Inc. and (ii) United Rentals (North America), Inc. (which is a wholly owned subsidiary of United Rentals, Inc.). United Rentals (North America), Inc. meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure format permitted by such instruction.


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UNITED RENTALS, INC.
UNITED RENTALS (NORTH AMERICA), INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBERJUNE 30, 20172020
INDEX
 
Page
PART I
Page
PART IItem 1
Item 1
Unaudited Condensed Consolidated Financial Statements
6
6
7
8
9
1011
1112
Item 2
36
Item 3
5154
Item 4
5255
PART II
Item 1
5356
Item 1A
5356
Item 2
5356
Item 6
5457
5658

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS


This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “on-track,” “plan,” “project,” “forecast,” “intend” or “anticipate,” or the negative thereof or comparable terminology, or by discussions of strategy or outlook. You are cautioned that our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control, and, consequently, our actual results may differ materially from those projected.


Factors that could cause actual results to differ materially from those projected include, but are not limited to, the following:

•uncertainty regarding the length of time it will take for the United States and the rest of the world to slow the spread of the novel strain of coronavirus (COVID-19) to the point where applicable governmental authorities are comfortable easing current “social distancing” policies, which have required closing many businesses deemed “non-essential”; such restrictions are designed to protect public health but also have the effect of significantly reducing demand for equipment rentals;
•the extent to which businesses in and associated with the construction industry, including equipment rental service providers such as us, continue to be deemed “essential” for the purposes of “social distancing” policies in the regions in which we operate;
•the impact of global economic conditions (including potential trade wars) and public health crises and epidemics, such as COVID-19, on us, our customers and our suppliers, in the United States and the rest of the world;
•the possibility that companies that we have acquired or may acquire, in our specialty business or otherwise, including NES RentalsBakerCorp International Holdings, II, Inc. (“NES ”)BakerCorp”) and NeffVander Holding Corporation ("Neff"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 $8.4$10.4 billion at SeptemberJune 30, 2017)2020) 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 (including as a result of current volatility and uncertainty in capital markets due to COVID-19), 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;industry, including as a result of reduced demand for fleet due to the impacts of COVID-19 on our customers;
•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;anticipated (for example, due to COVID-19);
•rates we charge and time utilization we achieve being less than anticipated;anticipated (including as a result of COVID-19);
•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;require (including as a result of uncertainty in capital markets due to COVID-19);
•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;
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•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;personnel, as well as loss, absenteeism or the inability of employees to work or perform key functions in light of public health crises or epidemics (including COVID-19);
•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;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; and
•increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment.equipment; and

•the effect of changes in tax law.

For a more complete description of these and other possible risks and uncertainties, please refer to our Annual Report on Form 10-K for the year ended December 31, 2016,2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as well as to our subsequent filings with the SEC. Our forward-looking statements contained herein speak only as of the date hereof, and we make no commitment to update or publicly release any revisions to forward-looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations.



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PART I. FINANCIAL INFORMATION
 
Item 1.Financial Statements

Item 1.Financial Statements

UNITED RENTALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
 
September 30, 2017 December 31, 2016June 30, 2020December 31, 2019
(unaudited) (unaudited)
ASSETS   ASSETS
Cash and cash equivalents$324
 $312
Cash and cash equivalents$127  $52  
Accounts receivable, net of allowance for doubtful accounts of $57 at September 30, 2017 and $54 at December 31, 20161,151
 920
Accounts receivable, net of allowance for doubtful accounts of $108 at June 30, 2020 and $103 at December 31, 2019Accounts receivable, net of allowance for doubtful accounts of $108 at June 30, 2020 and $103 at December 31, 20191,226  1,530  
Inventory82
 68
Inventory107  120  
Prepaid expenses and other assets82
 61
Prepaid expenses and other assets162  140  
Total current assets1,639
 1,361
Total current assets1,622  1,842  
Rental equipment, net7,391
 6,189
Rental equipment, net9,086  9,787  
Property and equipment, net451
 430
Property and equipment, net609  604  
Goodwill3,493
 3,260
Goodwill5,135  5,154  
Other intangible assets, net759
 742
Other intangible assets, net761  895  
Operating lease right-of-use assetsOperating lease right-of-use assets666  669  
Other long-term assets11
 6
Other long-term assets21  19  
Total assets$13,744
 $11,988
Total assets$17,900  $18,970  
LIABILITIES AND STOCKHOLDERS’ EQUITY   LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt and current maturities of long-term debt$694
 $597
Short-term debt and current maturities of long-term debt$806  $997  
Accounts payable612
 243
Accounts payable316  454  
Accrued expenses and other liabilities467
 344
Accrued expenses and other liabilities799  747  
Total current liabilities1,773
 1,184
Total current liabilities1,921  2,198  
Long-term debt7,677
 7,193
Long-term debt9,599  10,431  
Deferred taxes2,012
 1,896
Deferred taxes1,820  1,887  
Operating lease liabilitiesOperating lease liabilities532  533  
Other long-term liabilities71
 67
Other long-term liabilities121  91  
Total liabilities11,533
 10,340
Total liabilities13,993  15,140  
Common stock—$0.01 par value, 500,000,000 shares authorized, 112,334,897 and 84,571,724 shares issued and outstanding, respectively, at September 30, 2017 and 111,985,215 and 84,222,042 shares issued and outstanding, respectively, at December 31, 20161
 1
Common stock—$0.01 par value, 500,000,000 shares authorized, 114,092,170 and 72,078,661 shares issued and outstanding, respectively, at June 30, 2020 and 113,825,667 and 74,362,195 shares issued and outstanding, respectively, at December 31, 2019Common stock—$0.01 par value, 500,000,000 shares authorized, 114,092,170 and 72,078,661 shares issued and outstanding, respectively, at June 30, 2020 and 113,825,667 and 74,362,195 shares issued and outstanding, respectively, at December 31, 20191  1  
Additional paid-in capital2,322
 2,288
Additional paid-in capital2,450  2,440  
Retained earnings2,108
 1,654
Retained earnings5,660  5,275  
Treasury stock at cost—27,763,173 shares at September 30, 2017 and December 31, 2016(2,077) (2,077)
Treasury stock at cost—42,013,509 and 39,463,472 shares at June 30, 2020 and December 31, 2019, respectivelyTreasury stock at cost—42,013,509 and 39,463,472 shares at June 30, 2020 and December 31, 2019, respectively(3,957) (3,700) 
Accumulated other comprehensive loss(143) (218)Accumulated other comprehensive loss(247) (186) 
Total stockholders’ equity2,211
 1,648
Total stockholders’ equity3,907  3,830  
Total liabilities and stockholders’ equity$13,744
 $11,988
Total liabilities and stockholders’ equity$17,900  $18,970  
See accompanying notes.

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UNITED RENTALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In millions, except per share amounts)
 
Three Months Ended Nine Months EndedThree Months EndedSix Months Ended
September 30, September 30, June 30,June 30,
2017
2016 2017 2016 2020201920202019
Revenues:       Revenues:
Equipment rentals$1,536
 $1,322
 $4,069
 $3,643
Equipment rentals$1,642  $1,960  $3,425  $3,755  
Sales of rental equipment139
 112
 378
 361
Sales of rental equipment176  197  384  389  
Sales of new equipment40
 30
 126
 96
Sales of new equipment53  60  115  122  
Contractor supplies sales21
 19
 60
 60
Contractor supplies sales23  27  48  51  
Service and other revenues30
 25
 86
 79
Service and other revenues45  46  92  90  
Total revenues1,766
 1,508
 4,719
 4,239
Total revenues1,939  2,290  4,064  4,407  
Cost of revenues:       Cost of revenues:
Cost of equipment rentals, excluding depreciation557
 486
 1,556
 1,391
Cost of equipment rentals, excluding depreciation647  769  1,394  1,511  
Depreciation of rental equipment290
 250
 804
 735
Depreciation of rental equipment395  399  821  794  
Cost of rental equipment sales84
 68
 225
 215
Cost of rental equipment sales105  116  230  241  
Cost of new equipment sales34
 25
 108
 79
Cost of new equipment sales46  51  100  105  
Cost of contractor supplies sales14
 13
 42
 41
Cost of contractor supplies sales16  19  34  36  
Cost of service and other revenues14
 10
 42
 32
Cost of service and other revenues29  25  57  48  
Total cost of revenues993
 852
 2,777
 2,493
Total cost of revenues1,238  1,379  2,636  2,735  
Gross profit773
 656
 1,942
 1,746
Gross profit701  911  1,428  1,672  
Selling, general and administrative expenses237
 179
 648
 533
Selling, general and administrative expenses222  271  489  551  
Merger related costs16
 —
 32
 —
Merger related costs—  —  —  1  
Restructuring charge9
 4
 28
 8
Restructuring charge3  6  5  14  
Non-rental depreciation and amortization63
 61
 189
 192
Non-rental depreciation and amortization95  105  195  209  
Operating income448
 412
 1,045
 1,013
Operating income381  529  739  897  
Interest expense, net131
 110
 338
 349
Interest expense, net130  180  266  331  
Other income, net(5) (1) (5) (3)Other income, net—  (2) (4) (5) 
Income before provision for income taxes322
 303
 712
 667
Income before provision for income taxes251  351  477  571  
Provision for income taxes123
 116
 263
 254
Provision for income taxes39  81  92  126  
Net income$199
 $187
 $449
 $413
Net income$212  $270  $385  $445  
Basic earnings per share$2.36
 $2.18
 $5.31
 $4.68
Basic earnings per share$2.94  $3.45  $5.26  $5.65  
Diluted earnings per share$2.33
 $2.16
 $5.26
 $4.66
Diluted earnings per share$2.93  $3.44  $5.25  $5.62  
See accompanying notes.

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UNITED RENTALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In millions)
 
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
 Net income$212  $270  $385  $445  
 Other comprehensive income (loss), net of tax:
 Foreign currency translation adjustments (1) (2)45  22  (58) 42  
 Fixed price diesel swaps—  —  (3) 1  
 Other comprehensive income (loss)45  22  (61) 43  
 Comprehensive income (1)$257  $292  $324  $488  
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
 Net income$199

$187
 $449
 $413
 Other comprehensive income (loss), net of tax:       
 Foreign currency translation adjustments41

(9) 75
 51
 Fixed price diesel swaps1

—
 —
 3
 Other comprehensive income (loss)42
 (9) 75
 54
 Comprehensive income (1)$241
 $178
 $524
 $467

(1)There were no0 material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income (loss) during 20172020 or 2016. There2019. There is no0 tax impact related to the foreign currency translation adjustments, as the earnings are considered permanently reinvested. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. We have not repatriated funds to the U.S. to satisfy domestic liquidity needs, nor do we anticipate the need to do so. 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. There were no0 material taxes associated with other comprehensive income (loss) during 20172020 or 2016.2019.

(2)The 2020 activity primarily reflects significant changes in Canadian currency exchange rates.



See accompanying notes.



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UNITED RENTALS, INC.
CONDENSED CONSOLIDATED STATEMENTSTATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(In millions)
Three Months Ended June 30, 2020
 Common Stock Treasury Stock
 Number of
Shares (1)		AmountAdditional Paid-in
Capital		Retained EarningsNumber of
Shares		AmountAccumulated Other Comprehensive Loss (2)
Balance at March 31, 202072  $1  $2,435  $5,448  42  $(3,957) $(292) 
Net income212  
Foreign currency translation adjustments (3)45  
Stock compensation expense, net—  15  
Balance at June 30, 202072  $1  $2,450  $5,660  42  $(3,957) $(247) 


Three Months Ended June 30, 2019
 Common Stock Treasury Stock
 Number of
Shares (1)		AmountAdditional Paid-in
Capital		Retained EarningsNumber of
Shares		AmountAccumulated Other Comprehensive Loss (2)
Balance at March 31, 201979  $1  $2,394  $4,276  35  $(3,080) $(216) 
Net income270  
Foreign currency translation adjustments22  
Stock compensation expense, net(1) 16  
Exercise of common stock options6  
Shares repurchased and retired(1) 
Repurchase of common stock(1) 1  (210) 
Balance at June 30, 201977  $1  $2,415  $4,546  36  $(3,290) $(194) 
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Six Months Ended June 30, 2020
 Common Stock Treasury Stock
 Number of
Shares (1)		AmountAdditional Paid-in
Capital		Retained EarningsNumber of
Shares		AmountAccumulated Other Comprehensive Loss (2)
Balance at December 31, 201974  $1  $2,440  $5,275  39  $(3,700) $(186) 
Net income385  
Foreign currency translation adjustments (3)(58) 
Fixed price diesel swaps(3) 
Stock compensation expense, net1  28  
Exercise of common stock options1  
Shares repurchased and retired(19) 
Repurchase of common stock(3) 3  (257) 
Balance at June 30, 202072  $1  $2,450  $5,660  42  $(3,957) $(247) 
Six Months Ended June 30, 2019
 Common Stock Treasury Stock
 Number of
Shares (1)		AmountAdditional Paid-in
Capital		Retained EarningsNumber of
Shares		AmountAccumulated Other Comprehensive Loss (2)
Balance at December 31, 201880  $1  $2,408  $4,101  33  $(2,870) $(237) 
Net income445  
Foreign currency translation adjustments42  
Fixed price diesel swaps1  
Stock compensation expense, net—  31  
Exercise of common stock options10  
Shares repurchased and retired(34) 
Repurchase of common stock(3) 3  (420) 
Balance at June 30, 201977  $1  $2,415  $4,546  36  $(3,290) $(194) 
 
 Common Stock     Treasury Stock  
 
Number of
Shares (1)
 Amount 
Additional Paid-in
Capital
 Retained Earnings 
Number of
Shares
 Amount 
Accumulated Other Comprehensive
(Loss) Income (2)
Balance at December 31, 201684
 $1
 $2,288
 $1,654
 28
 $(2,077) $(218)
Net income      449
      
Foreign currency translation adjustments            75
Cumulative effect of a change in accounting for share-based payments (note 1)      5
      
Stock compensation expense, net1
   64
        
Exercise of common stock options    1
        
Shares repurchased and retired    (26)        
Other    (5)        
Balance at September 30, 201785
 $1
 $2,322
 $2,108
 28
 $(2,077) $(143)
(1)Common stock outstanding decreased by approximately 86 million net shares during the year ended December 31, 2016.2019.
(2)The Accumulated Other Comprehensive Loss balance primarily reflects foreign currency translation adjustments.



(3)Primarily reflects significant changes in Canadian currency exchange rates.
See accompanying notes.

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UNITED RENTALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In millions)
Nine Months EndedSix Months Ended
September 30, June 30,
2017 2016 20202019
Cash Flows From Operating Activities:   Cash Flows From Operating Activities:
Net income$449
 $413
Net income$385  $445  
Adjustments to reconcile net income to net cash provided by operating activities:   Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization993
 927
Depreciation and amortization1,016  1,003  
Amortization of deferred financing costs and original issue discounts6
 7
Amortization of deferred financing costs and original issue discounts7  8  
Gain on sales of rental equipment(153) (146)Gain on sales of rental equipment(154) (148) 
Gain on sales of non-rental equipment(4) (3)Gain on sales of non-rental equipment(3) (3) 
Gain on insurance proceeds from damaged equipmentGain on insurance proceeds from damaged equipment(13) (12) 
Stock compensation expense, net64
 33
Stock compensation expense, net28  31  
Merger related costs32
 —
Merger related costs—  1  
Restructuring charge28
 8
Restructuring charge5  14  
Loss on repurchase/redemption of debt securities and amendment of ABL facility43
 36
Loss on repurchase/redemption of debt securities and amendment of ABL facility—  32  
Excess tax benefits from share-based payment arrangements—
 (53)
Increase in deferred taxes97
 90
(Decrease) increase in deferred taxes(Decrease) increase in deferred taxes(62) 49  
Changes in operating assets and liabilities, net of amounts acquired:   Changes in operating assets and liabilities, net of amounts acquired:
(Increase) decrease in accounts receivable(172) 7
Increase in inventory(9) (3)
(Increase) decrease in prepaid expenses and other assets(1) 75
Increase in accounts payable350
 137
Increase in accrued expenses and other liabilities43
 102
Decrease in accounts receivableDecrease in accounts receivable297  39  
Decrease (increase) in inventoryDecrease (increase) in inventory12  (25) 
Increase in prepaid expenses and other assetsIncrease in prepaid expenses and other assets(2) (23) 
(Decrease) increase in accounts payable(Decrease) increase in accounts payable(135) 211  
Increase (decrease) in accrued expenses and other liabilitiesIncrease (decrease) in accrued expenses and other liabilities80  (32) 
Net cash provided by operating activities1,766
 1,630
Net cash provided by operating activities1,461  1,590  
Cash Flows From Investing Activities:   Cash Flows From Investing Activities:
Purchases of rental equipment(1,485) (1,145)Purchases of rental equipment(353) (1,129) 
Purchases of non-rental equipment(87) (65)Purchases of non-rental equipment(102) (97) 
Proceeds from sales of rental equipment378
 361
Proceeds from sales of rental equipment384  389  
Proceeds from sales of non-rental equipment10
 12
Proceeds from sales of non-rental equipment20  15  
Insurance proceeds from damaged equipmentInsurance proceeds from damaged equipment13  12  
Purchases of other companies, net of cash acquired(1,063) (28)Purchases of other companies, net of cash acquired(2) (195) 
Purchases of investments(5) —
Purchases of investments(1) (1) 
Net cash used in investing activities(2,252) (865)Net cash used in investing activities(41) (1,006) 
Cash Flows From Financing Activities:   Cash Flows From Financing Activities:
Proceeds from debt8,702
 5,812
Proceeds from debt3,620  4,590  
Payments of debt(8,156) (6,021)Payments of debt(4,680) (4,679) 
Proceeds from the exercise of common stock options1
 —
Proceeds from the exercise of common stock options1  10  
Common stock repurchased(26) (488)Common stock repurchased(276) (454) 
Payments of financing costs(44) (12)Payments of financing costs(10) (19) 
Excess tax benefits from share-based payment arrangements—
 53
Net cash provided by (used in) financing activities477
 (656)
Net cash used in financing activitiesNet cash used in financing activities(1,345) (552) 
Effect of foreign exchange rates21
 9
Effect of foreign exchange rates—  —  
Net increase in cash and cash equivalents12
 118
Net increase in cash and cash equivalents75  32  
Cash and cash equivalents at beginning of period312
 179
Cash and cash equivalents at beginning of period52  43  
Cash and cash equivalents at end of period$324
 $297
Cash and cash equivalents at end of period$127  $75  
Supplemental disclosure of cash flow information:   Supplemental disclosure of cash flow information:
Cash paid for income taxes, net$114
 $14
Cash paid for income taxes, net$21  $73  
Cash paid for interest305
 294
Cash paid for interest259  301  
See accompanying notes.





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UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise indicated)

1.

1. Organization, Description of Business and Basis of Presentation
United Rentals, Inc. (“Holdings,” “URI” or the “Company”) 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 shareholder.
We rent equipment to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities in the United States, Canada and Canada.Europe. In July 2018, we completed the acquisition of BakerCorp International Holdings, Inc. (“BakerCorp”), which allowed for our entry 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.
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the accounting policies described in our annual report on Form 10-K for the year ended December 31, 20162019 (the “2016“2019 Form 10-K”) and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the 20162019 Form 10-K.
In our opinion, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of financial condition, operating results and cash flows for the interim periods presented have been made. Interim results of operations are not necessarily indicative of the results of the full year.


COVID-19
The novel coronavirus (“COVID-19”) was first identified in people in late 2019. COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization characterized COVID-19 as a pandemic. COVID-19 is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk. It has significantly disrupted supply chains and businesses around the world. The extent and duration of the COVID-19 impact, on the operations and financial position of United Rentals and on the global economy, is uncertain. While visibility into future economic conditions remains limited, based on increased insight into near-term indicators, we reintroduced full-year 2020 guidance in July 2020, after having withdrawn it in April 2020. The health and safety of our employees and customers remains our top priority, and we have also engaged in extensive contingency planning to manage the business impact of the pandemic.
Prior to mid-March 2020, our results were largely in line with expectations. 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. All our branches in the U.S. and Canada remain open to provide essential services, and most of our European branches are also operating. COVID-19 is discussed in more detail throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

New Accounting Pronouncements
LeasesSimplifying the Test for Goodwill Impairment. In March 2016,January 2017, the Financial Accounting Standards Board (“FASB”("FASB") issued guidance ("Topic 842") to increase transparency and comparability among organizations by requiring i) recognition of lease assets and lease liabilities on the balance sheet and ii) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: i) the lessor accounting guidance with certain changes made to the lessee accounting guidance and ii) key aspects of the lessor accounting model with revenue recognition guidance. Topic 842 will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We expect to adopt this guidance when effective.
As discussed below, most of our equipment rental revenues, which accounted for 86 percent of total revenues for the nine months ended September 30, 2017, will be accounted for under the current lease accounting standard ("Topic 840") until the adoption of Topic 842. While our review of the equipment rental revenue accounting under Topic 842 is ongoing, we have tentatively concluded that no significant changes are expected to the accounting for most of our equipment rental revenues upon adoption of Topic 842.
Under Topic 842, our operating leases, which include both real estate and non-rental equipment, will result in lease assets and lease liabilities being recognized on the balance sheet. 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. We expect that the quantification of the amount of the lease assets and lease liabilities that we will recognize on our balance sheet will take a significant amount of time given the size of our lease portfolio. While our review of the lessee accounting requirements of Topic 842 is ongoing, we believe that the impact on our balance sheet, while not currently estimable, will be significant.
Revenue from Contracts with Customers. In May 2014, and in subsequent updates, the FASB issued guidance ("Topic 606") to clarify the principles for recognizing revenue. This guidance 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. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption (for fiscal years and interim periods beginning after December 15, 2016) is permitted. We expect to adopt this guidance when effective.
Upon adoption of Topic 606, we will recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 840. As discussed above, we expect to adopt Topic 842, an update to Topic 840, when it becomes effective, on January 1, 2019. While our review of our revenue accounting is ongoing, we expect that most of our equipment rental revenues, which accounted for 86 percent of total revenues for the nine months ended September 30, 2017, will be accounted for under

Topic 840 until the adoption of Topic 842, and that our non-equipment rental revenues will be accounted for under Topic 606. While our review of our non-equipment rental revenue accounting is ongoing, we do not believe that Topic 606 will have a significant impact on our financial statements.
We are also evaluating the disclosure requirements of Topic 606, as well as its impact on our internal controls over financial reporting.
Statement of Cash Flows. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. The guidance addresses the following specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements.
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 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective or prospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable.
Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued guidance that will require companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements.
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. Early adoption ofWe will adopt this guidance is permitted for interimany annual or annualinterim goodwill impairment tests conducted in 2020 (through June 30, 2020, we have not performed on testing dates after January 1, 2017. We expect to adopt this guidance when effective, and do not expect it to have a significant impact on our financial statements.
Clarifying the Definition of a Businessany such tests). In January 2017, the FASB issued guidance to clarify the definition of a business with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is intended to make determining when a set of assets and activities is a business more consistent and cost-efficient. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted for transactions that occurred before the issuance date or effective date of the guidance if the transactions were not reported in financial statements that have been issued or made available for issuance. We expect to adopt this guidance when effective. The impact of this guidance will depend on the nature of our activities after adoption, and fewer transactions may be treated as acquisitions (or disposals) of businesses after adoption.
Stock Compensation: Scope of Modification Accounting. In May 2017, the FASB issued guidance to provide clarity and reduce both the (1) diversity in practice and (2) cost and complexity when changing the terms or conditions of share-based

payment awards. Under the updated guidance, a modification is defined as a change in the terms or conditions of a share-based payment award, and an entity should account for the effects of a modification unless all of the following are met:
1.The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation techniques that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification.
2.The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified.
3.The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified.
This guidance requires prospective adoption and will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The majority of our modifications relate to the acceleration of vesting conditions and we would continue to be required to account for the effects of such modifications under the updated guidance. We expect to adopt this guidance when effective, and do not expect that this guidance will have a significant impact on our financial statements.
Derivatives and Hedging. In August 2017, the FASB issued guidance with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The guidance is additionally intended to simplify hedge accounting, and no longer requires separate measurement and reporting of hedge ineffectiveness. For cash flow and net investment hedges existing at the date of adoption, entities must apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings. The amended presentation and disclosure guidance is required prospectively. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. We are currently assessing whether we will early adopt. Given our currently limited use of derivative instruments (see note 6 to our condensed consolidated financial statements), the guidance is not expected to have a significant impact on our financial statements.
Guidance Adopted in 2017
Improvements to Employee Share-Based Payment Accounting. In the first quarter of 2017, we adopted guidance that simplified several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. We prospectively adopted the amendments in this guidance that relate to the classification of excess tax benefits from share-based payment arrangements on the statement of cash flows. The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes. In the nine months ended September 30, 2017, we recognized $8 of such excess tax benefits, and, pursuant to the adopted guidance, net income increased by $8, or $0.10 per diluted share, reflecting the tax reduction associated with the excess tax benefits. Prior periods have not been adjusted to reflect the new guidance related to the classification of the excess tax benefits, as we have elected to prospectively adopt such guidance. Accordingly, our statement of cash flows for the nine months ended September 30, 2016 reflects $53 of such excess tax benefits within net cash used in financing activities. All of the excess tax benefits for the nine months ended September 30, 2016 pertain to share based payments that vested prior to 2016, and, accordingly, would not have impacted net income under the new guidance.
Other significant components of the adopted guidance include:
The guidance requires that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. We have historically classified such payments as financing activities, so no retrospective change was required to our 2016 statement of cash flows.
Certain aspects of the guidance require a cumulative change to retained earnings upon adoption. Upon adopting this guidance, we elected to record forfeitures of share-based payments as they occur. Making such an election requires a cumulative change to retained earnings upon adoption. However, we historically adjusted estimated forfeitures to reflect actual forfeitures annually, as a result of which no change to retained earnings was required. In 2016, we utilized all of the prior federal excess tax benefits from share-based payments that vested through 2016, and, accordingly, no change to retained earnings was required associated with federal excess tax benefits from share-based payments. A $5 change to retained earnings was required associated with state excess tax benefits from share-based payments that were not previously recognized because the related tax deduction had not reduced taxes payable.


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UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)




2. Acquisitions
NES Acquisition
Simplifying the Accounting for Income Taxes.In April 2017, we completedDecember 2019, the acquisitionFASB 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 NES Rentals Holdings II, Inc. (“NES”). NES was a provider of rental equipment with 73 branches located throughout the eastern halfgoodwill should be considered part of the U.S.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 had approximately 1,100 employees5) making minor improvements for income tax accounting related to employee stock ownership plans and approximately $900investments 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 rental assets at original equipment cost as of December 31, 2016. NES had annual revenues of approximately $369. The acquisitionthe guidance require retrospective, modified retrospective or prospective adoption, and early adoption is expected to:
•Increase our density in strategically important markets, including the East Coast, Gulf Statespermitted. We are currently assessing whether we will early adopt this guidance, and the Midwest;
•Strengthen our relationships with local and strategic accounts in the construction and industrial sectors, which we expect will enhance cross-selling opportunities and drive revenue synergies; and
•Create meaningful opportunities for cost synergies in areas such as corporate overhead, operational efficiencies and purchasing.
The aggregate consideration paid to holders of NES common stock and options was approximately $960. The acquisition and related fees and expenses were funded through available cash, drawingsimpact on our senior secured asset-based revolvingfinancial statements is not currently estimable.
Guidance Adopted in 2020
Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued guidance that requires companies to present certain financial assets net of the amount expected to be collected. Trade receivables (as noted below, excluding receivables arising from operating lease revenues) are the only material financial asset we have that is impacted by this guidance. The guidance requires the measurement of expected credit facility (“ABL facility”)losses to be based on relevant information from past events, including historical experiences, current conditions and new debt issuances. Seereasonable and supportable forecasts that affect collectibility. This guidance does not apply to receivables arising from operating lease revenues. As discussed in note 82 to the condensed consolidated financial statements, most of our equipment rental revenue is accounted for additional detailas lease revenue (such revenue represented 77 percent of our total revenues for the six months ended June 30, 2020). We adopted this guidance in the first quarter of 2020, and the impact of adoption on our financial statements was not material. See note 2 (see "Receivables and contract assets and liabilities") for further discussion of our receivables.
Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In March 2020, the FASB issued guidance that provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. We adopted this guidance in 2020, and the impact of adoption on our financial statements was not material. The expedients and exceptions in this guidance are optional, and we are evaluating the potential future financial statement impact of any such expedient or exception that we may elect to apply.
2. Revenue Recognition

Revenue Recognition Accounting Standards
We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the debt issuances.
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 following table summarizes the estimated fair valuesamount of the assets acquired and liabilities assumed as of the acquisition date. The opening balance sheet values assigned to these assets and liabilities are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period.
 Accounts receivable, net of allowance for doubtful accounts (1)$49
 Inventory4
 Rental equipment571
 Property and equipment48
 Intangibles (2)139
 Other assets7
 Total identifiable assets acquired818
 Short-term debt and current maturities of long-term debt (3)(3)
 Current liabilities(28)
 Deferred taxes(14)
 Long-term debt (3)(11)
 Other long-term liabilities(5)
 Total liabilities assumed(61)
 Net identifiable assets acquired757
 Goodwill (4)203
 Net assets acquired$960
(1) The fair value of accounts receivables acquired was $49, and the gross contractual amount was $53. We estimated that $4 would be uncollectible.
(2) The following tablerevenue recognized reflects the estimated fair valuesconsideration we expect to be entitled to in exchange for such products or services.

Nature of goods and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
 Fair value Life (years)
 Customer relationships$138
10
 Non-compete agreements1
1
 Total$139
 
(3) The acquired debt reflects capital lease obligations.
(4) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of NES's going-concern value, the value of NES's assembled workforce, new customer

services
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UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)




In the following table, revenue is summarized by type and by the applicable accounting standard.
relationships expected to arise from
Three Months Ended June 30,
20202019
Topic 842Topic 606TotalTopic 842Topic 606Total
Revenues:
Owned equipment rentals$1,404  $—  $1,404  $1,668  $—  $1,668  
Re-rent revenue29  —  29  37  —  37  
Ancillary and other rental revenues:
Delivery and pick-up—  113  113  —  143  143  
Other78  18  96  87  25  112  
Total ancillary and other rental revenues78  131  209  87  168  255  
Total equipment rentals1,511  131  1,642  1,792  168  1,960  
Sales of rental equipment—  176  176  —  197  197  
Sales of new equipment—  53  53  —  60  60  
Contractor supplies sales—  23  23  —  27  27  
Service and other revenues—  45  45  —  46  46  
Total revenues$1,511  $428  $1,939  $1,792  $498  $2,290  
Six Months Ended June 30,
20202019
Topic 842Topic 606TotalTopic 842Topic 606Total
Revenues:
Owned equipment rentals$2,926  $—  $2,926  $3,198  $—  $3,198  
Re-rent revenue63  —  63  72  —  72  
Ancillary and other rental revenues:
Delivery and pick-up—  232  232  —  262  262  
Other159  45  204  167  56  223  
Total ancillary and other rental revenues159  277  436  167  318  485  
Total equipment rentals3,148  277  3,425  3,437  318  3,755  
Sales of rental equipment—  384  384  —  389  389  
Sales of new equipment—  115  115  —  122  122  
Contractor supplies sales—  48  48  —  51  51  
Service and other revenues—  92  92  —  90  90  
Total revenues$3,148  $916  $4,064  $3,437  $970  $4,407  
Revenues by reportable segment and geographical market are presented in notes 3 and 10 of the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $1 of goodwill is expected to be deductible for income tax purposes.
The three and nine months ended September 30, 2017 include NES acquisition-related costs of $1 and $17, respectively, which are included in “Merger related costs” in our condensed consolidated financial statements, of income. The merger related costs are comprised of financial and legal advisory fees. In addition torespectively, using the acquisition-related costsrevenue captions reflected in our condensed consolidated statements of income,operations. The majority of our revenue is recognized in our general rentals segment and in the debt issuance costsU.S. (for the six months ended June 30, 2020, 79 percent and 92 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 original issue premiums associated withreportable segment and geographical market disclosures in notes 3 and 10, depicts how the issuancenature, amount, timing and uncertainty of debt to fundour revenue and cash flows are affected by economic factors.

Lease revenues (Topic 842)
The accounting for the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our condensed consolidated balance sheets. See note 8 to the condensed consolidated financial statements for additional detail on the debt issuances.
Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired NES locations, and it is not practicable to reasonably estimate the amountstypes of revenue and earnings of NES since the acquisition date. The impact of the NES acquisition on ourthat are accounted for under Topic 842 is discussed below.
Owned equipment rentals represent our most significant revenue is primarily reflected in the increases in the volumetype (they accounted for 72 percent of OEC on rent of 18.2 percent and 14.5 percenttotal revenues for the three and ninesix months ended SeptemberJune 30, 2017, respectively.
The pro forma information below gives effect to the NES acquisition as if it had been completed on January 1, 2016 (“the pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisition 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 acquisition, and also does not reflect additional revenue opportunities following the acquisition. The pro forma information includes adjustments to record the assets and liabilities of NES at their respective fair values based on available information and to give effect to the financing for the acquisition and related transactions. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. The opening balance sheet values assigned to the assets acquired and liabilities assumed are based on preliminary valuations2020) and are subject to changegoverned by our standard rental contract. We account for such rentals as we obtain additional information during the acquisition measurement period. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. We expect that the values assigned to the assets acquired and liabilities assumed will be finalized in 2017.operating leases. The table below presents unaudited pro forma consolidated income statement information as if NES had beenlease terms are included in our consolidated results forcontracts, and the entire periods reflected:
 Three Months Ended Nine Months Ended 
 September 30, September 30, 
 2017 2016 2017
 2016 
United Rentals historic revenues$1,766
 $1,508
 $4,719
 $4,239
 
NES historic revenues—
 95
 81
 266
 
Pro forma revenues1,766
 1,603
 4,800
 4,505
 
United Rentals historic pretax income322
 303
 712
 667
 
NES historic pretax income (loss)—
 6
 (12) 11
 
Combined pretax income322
 309
 700
 678
 
Pro forma adjustments to combined pretax income:        
Impact of fair value mark-ups/useful life changes on depreciation (1)—
 (9) (9) (28) 
Impact of the fair value mark-up of acquired NES fleet on cost of rental equipment sales (2)—
 (1) (1) (1) 
Gain on sale of equity interest (3)—
 —
 —
 (7) 
Interest expense (4)—
 (9) (9) (28) 
Elimination of historic NES interest (5)—
 9
 12
 28
 
Elimination of merger related costs (6)1
 —
 17
 —
 
Restructuring charges (7)9
 (9) 27
 (27) 
Pro forma pretax income$332
 $290
 $737
 $615
 
(1) Depreciationdetermination of rental equipment and non-rental depreciation were adjusted for the fair value mark-upswhether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of equipment acquired in the NES acquisition. The useful lives assigned to such equipment did not change significantly from the lives historically used by NES.
(2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the NES acquisition.

variable payments.
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UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)




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.
(3)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 2016, NES sold its equity interestany 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 and Topic 606) of $50 and $55 as of June 30, 2020 and December 31, 2019, 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 successor companymaturity analysis of future lease payments. Our equipment is generally rented for short periods of time. 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 recognized a gainour equipment is typically rented for the majority of $7. This gain was eliminatedthe 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 equity interest that was soldaccounting for owned equipment rentals described above.
“Other” equipment rental revenue is not a component of the combined company.
(4) To partially fund the NES acquisition, URNA issued an aggregate of $500 principal amount of debt, as discussed in note 8 to the condensed consolidated financial statements. Drawings on the ABL facility were also used to partially fund the purchase price. Interest expense was adjusted to reflect these changes in our debt portfolio.
(5) NES historic interest on debt that is not part of the combined entity was eliminated.
(6) Merger related costsprimarily comprised of financial and legal advisory fees1) Rental Protection Plan (or "RPP") revenue associated with the NES acquisition were eliminated asdamage waiver customers can purchase when they were assumedrent our equipment to have been recognized prior to the pro forma acquisition date. The merger related costs reflected in our condensed consolidated statements of income also include costs associated with the acquisition of Neff Corporation (“Neff”) discussed below.
(7) We expect to recognize restructuring charges primarily comprised of severance costs and branch closureprotect against potential loss or damage, 2) environmental charges associated with the acquisition over a periodrental of approximately one year following the acquisition date, which,equipment, and 3) charges for rented equipment that is damaged by our customers.
Revenues from contracts with customers (Topic 606)
The accounting for the pro forma presentation, was January 1, 2016. As such,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 restructuring charges recognized in 2017 were moved to 2016. The restructuring charges reflected in our condensed consolidated statementsservice is performed.
“Other” equipment rental revenue is primarily comprised of income also include non-NES restructuring charges, as discussed in note 4 to the condensed consolidated financial statements. We do not expect to recognize significant additional restructuring chargesrevenues associated with the acquisition. The 2016 restructuring charges above reflectconsumption of fuel by our customers which are recognized when the total charges recorded asequipment is returned by the customer (and consumption, if any, can be measured).
Sales of September 30, 2017rental equipment, new equipment and contractor supplies are recognized on a straight-line basis fromat the pro forma acquisition date through September 30, 2016.time of delivery to, or pick-up by, the customer and when collectibility is probable.
Neff Acquisition
In August 2017, we entered into a definitive merger agreement with Neff, pursuant to which we agreed to acquire Neff in an all cash transaction. The merger closed on October 2, 2017. The aggregate consideration paid to complete the acquisition was approximately $1.3 billion. The merger and related fees and expenses were funded through available cash, drawings on current debt facilities and new debt issuances. See note 8 to the condensed consolidated financial statements for additional detail on the debt issuances. Neff was a provider of earthmoving, material handling, aerialService and other equipment,revenues primarily represent revenues earned from providing repair and had 69 branches located in 14 states, with a concentration in southern geographies. Neff had approximately 1,100 employeesmaintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed.

Receivables and approximately $860 of rentalcontract assets at original equipment cost as of September 30, 2017. Neff had annual revenues of approximately $413.


and liabilities
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(Dollars in millions, except per share data, unless otherwise indicated)




As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 77 percent of our total revenues for the six months ended June 30, 2020). 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 and Topic 842.
3Concentration 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 1 percent of total revenues for the six months ended June 30, 2020, and for each of the last three full years. Our customer with the largest receivable balance represented approximately 1 percent of total receivables at June 30, 2020 and December 31, 2019. 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 and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. 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 the table below for a rollforward of our allowance for doubtful accounts.
In the first quarter of 2020, we adopted accounting guidance that requires companies to present certain financial assets net of the amount expected to be collected. This 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. Our allowance for doubtful accounts as of June 30, 2020 included an adjustment for the estimated impact of COVID-19 on future collectibility that was not material to our financial statements. Trade receivables are the only material financial asset we have that is impacted by this guidance, which does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 77 percent of our total revenues for the six months ended June 30, 2020, and these revenues account for corresponding portions of the $1.226 billion of net accounts receivable and the associated allowance for doubtful accounts of $108 reported on our condensed consolidated balance sheet as of June 30, 2020). During the three and six months ended June 30, 2020, we recognized total bad debt expenses for our non-lease trade receivables, within selling, general and administrative expenses on our condensed consolidated statement of income, of $2 and $6, respectively, associated with our allowance for doubtful accounts. Adoption of this guidance did not materially impact 1) net accounts receivable or the associated allowance for doubtful accounts as reported on our condensed consolidated balance sheet as of June 30, 2020 or 2) total bad debt expenses recognized associated with our allowance for doubtful accounts for the three and six months ended June 30, 2020.
As discussed above, most of our equipment rental revenue is accounted for under Topic 842. 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. The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below.
Three Months Ended June 30, 2020Three Months Ended June 30, 2019Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Beginning balance$107  $104  $103  $93  
Acquired (1)—  (3) —  1  
Charged to costs and expenses (2)2  2  6  5  
Charged to revenue (3)2  10  10  22  
Deductions (4)(3) (6) (11) (14) 
Ending balance$108  $107  $108  $107  
_________________
(1) Activity during the three months ended June 30, 2019 reflects acquisition measurement period adjustments.
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(Dollars in millions, except per share data, unless otherwise indicated)

(2) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues).
(3) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues).
(4) Represents write-offs of accounts, net of immaterial recoveries.
We do 0t 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 0t recognize material revenue during the three and six months ended June 30, 2020 or 2019 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 three and six months ended June 30, 2020 and 2019 were 0t 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 June 30, 2020.

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.
Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis.
3. Segment Information
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(Dollars in millions, except per share data, unless otherwise indicated)


Our reportable segments are i) general rentals and ii) trench, power and pump. 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 ten11 geographic regions—Carolinas, Gulf South, Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Mid-Central,Mid Central, Midwest, Northeast, Pacific West, South, Southeast and Western Canada—and operates throughout the United States and Canada. We periodically review the size and geographic scope of our regions, and have occasionally reorganized the regions to create a more balanced and effective structure.
The trench, power and pumpfluid 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) pumpsfluid solutions equipment primarily used by municipalities, industrial plants,for fluid containment, transfer and mining, construction, and agribusiness customers.treatment. The trench, power and pumpfluid solutions segment is comprised of the following regions, each of which primarily rents the corresponding equipment type described above: (i)i) the Trench Safety region, (ii)ii) the Power and HVAC region, iii) the Fluid Solutions region and (iii)iv) the PumpFluid Solutions Europe region. The trench, power and pumpfluid 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.
These segments align our external segment reporting with how management evaluatesCanada and allocates resources. We evaluate segment performance based on segment equipment rentals gross profit.Europe.
 
The following tables set forth financial information by segment.






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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





General
rentals		Trench, power and fluid solutionsTotal
Three Months Ended June 30, 2020
Equipment rentals$1,255  $387  $1,642  
Sales of rental equipment158  18  176  
Sales of new equipment45  8  53  
Contractor supplies sales15  8  23  
Service and other revenues39  6  45  
Total revenue1,512  427  1,939  
Depreciation and amortization expense401  89  490  
Equipment rentals gross profit419  181  600  
Three Months Ended June 30, 2019
Equipment rentals$1,527  $433  $1,960  
Sales of rental equipment180  17  197  
Sales of new equipment52  8  60  
Contractor supplies sales19  8  27  
Service and other revenues40  6  46  
Total revenue1,818  472  2,290  
Depreciation and amortization expense416  88  504  
Equipment rentals gross profit593  199  792  
Six Months Ended June 30, 2020
Equipment rentals$2,649  $776  $3,425  
Sales of rental equipment348  36  384  
Sales of new equipment98  17  115  
Contractor supplies sales31  17  48  
Service and other revenues80  12  92  
Total revenue3,206  858  4,064  
Depreciation and amortization expense838  178  1,016  
Equipment rentals gross profit867  343  1,210  
Capital expenditures377  78  455  
Six Months Ended June 30, 2019
Equipment rentals$2,950  $805  $3,755  
Sales of rental equipment358  31  389  
Sales of new equipment107  15  122  
Contractor supplies sales36  15  51  
Service and other revenues77  13  90  
Total revenue3,528  879  4,407  
Depreciation and amortization expense828  175  1,003  
Equipment rentals gross profit1,094  356  1,450  
Capital expenditures1,015  211  1,226  

19
 
General
rentals
 Trench, power and pump Total
Three Months Ended September 30, 2017     
Equipment rentals$1,237
 $299
 $1,536
Sales of rental equipment130
 9
 139
Sales of new equipment34
 6
 40
Contractor supplies sales17
 4
 21
Service and other revenues26
 4
 30
Total revenue1,444
 322
 1,766
Depreciation and amortization expense306
 47
 353
Equipment rentals gross profit525
 164
 689
Three Months Ended September 30, 2016     
Equipment rentals$1,097
 $225
 $1,322
Sales of rental equipment103
 9
 112
Sales of new equipment27
 3
 30
Contractor supplies sales16
 3
 19
Service and other revenues23
 2
 25
Total revenue1,266
 242
 1,508
Depreciation and amortization expense266
 45
 311
Equipment rentals gross profit469
 117
 586
Nine Months Ended September 30, 2017     
Equipment rentals$3,357
 $712
 $4,069
Sales of rental equipment348
 30
 378
Sales of new equipment112
 14
 126
Contractor supplies sales49
 11
 60
Service and other revenues76
 10
 86
Total revenue3,942
 777
 4,719
Depreciation and amortization expense855
 138
 993
Equipment rentals gross profit1,350
 359
 1,709
Capital expenditures1,404
 168
 1,572
Nine Months Ended September 30, 2016     
Equipment rentals$3,067
 $576
 $3,643
Sales of rental equipment334
 27
 361
Sales of new equipment84
 12
 96
Contractor supplies sales49
 11
 60
Service and other revenues71
 8
 79
Total revenue3,605
 634
 4,239
Depreciation and amortization expense791
 136
 927
Equipment rentals gross profit1,243
 274
 1,517
Capital expenditures1,086
 124
 1,210

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





September 30,
2017		 December 31,
2016		June 30,
2020		December 31,
2019
Total reportable segment assets   Total reportable segment assets
General rentals$12,118
 $10,496
General rentals$15,109  $16,036  
Trench, power and pump1,626
 1,492
Trench, power and fluid solutionsTrench, power and fluid solutions2,791  2,934  
Total assets$13,744
 $11,988
Total assets$17,900  $18,970  
 
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 for income taxes:
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Total equipment rentals gross profit$600  $792  $1,210  $1,450  
Gross profit from other lines of business101  119  218  222  
Selling, general and administrative expenses(222) (271) (489) (551) 
Merger related costs—  —  —  (1) 
Restructuring charge(3) (6) (5) (14) 
Non-rental depreciation and amortization(95) (105) (195) (209) 
Interest expense, net(130) (180) (266) (331) 
Other income, net—  2  4  5  
Income before provision for income taxes$251  $351  $477  $571  
20

Three Months Ended
Nine Months Ended
 September 30,
September 30,
 2017
2016
2017
2016
Total equipment rentals gross profit$689
 $586
 $1,709
 $1,517
Gross profit from other lines of business84
 70
 233
 229
Selling, general and administrative expenses(237) (179) (648) (533)
Merger related costs(16) —
 (32)
—
Restructuring charge(9) (4) (28) (8)
Non-rental depreciation and amortization(63) (61) (189) (192)
Interest expense, net(131) (110) (338) (349)
Other income, net5
 1
 5
 3
Income before provision for income taxes$322
 $303

$712

$667
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UNITED RENTALS, INC.
4.NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)


4. Restructuring Charges
Restructuringand Asset Impairment Charges
Restructuring charges primarily include severance costs associated with headcount reductions, as well as branch closure charges which principally relate to continuing lease obligations at vacant facilities.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 restructuring program was initiated in 2008, we have completed three5 restructuring programs and have incurred total restructuring charges of $262.$338.
Closed Restructuring Programs
We have threeOur closed restructuring programs. The first wasprograms were initiated in 2008either in recognition of a challenging economic environment and was completed in 2011. The second was initiatedor following the Aprilcompletion of certain significant acquisitions. As of June 30, 2012 acquisition of RSC Holdings Inc. ("RSC"), and2020, the total liability associated with the closed restructuring programs was completed in 2013. The third was initiated in$16.
2020-2021 Cost Savings Restructuring Program
In the fourth quarter of 2015 in response to challenges in our operating environment. In particular, during 2015, we experienced volume and pricing pressure in our general rental business and our Pump Solutions region associated with upstream oil and gas customers. Additionally, our Lean initiatives did not fully generate the anticipated cost savings due to lower than expected growth. In 2016, we achieved the anticipated run rate savings from the Lean initiatives, and this restructuring program was completed in 2016.
NES/Neff/Project XL Restructuring Program
In the second quarter of 2017,2019, we initiated a restructuring program following the closing of the NES acquisition discussed in note 2 to the condensed consolidated financial statements. The restructuring program also includes actions undertaken associated with 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. Additionally, following the closing of the Neff acquisition that is discussed in note 2 to the condensed consolidated financial statements on October 2, 2017, the restructuring program will include actions that we expect to undertake associated with the Neff acquisition.consolidation of certain common functions, the relocation of our shared-service facilities and certain other cost reduction measures. We expect

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



to complete the restructuring program in the first half of 2018.2021. 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.
The table below provides certain information concerning restructuring activity during As of June 30, 2020, we have not recognized material costs under this program, and the nine months ended September 30, 2017:
  Reserve Balance at Charged to
Costs and
Expenses (1)		 Payments
and Other		 Reserve Balance at
  December 31, 2016   September 30, 2017
Closed Restructuring Programs        
Branch closure charges $16
 $1
 $(3) $14
Severance and other 1
 —
 (1) —
Total $17
 $1
 $(4) $14
NES/Neff/Project XL Restructuring Program        
Branch closure charges $—
 $7
 $(1) $6
Severance and other —
 20
 (16) 4
Total $—
 $27
 $(17) $10
Total        
Branch closure charges $16
 $8
 $(4) $20
Severance and other 1
 20
 (17) 4
Total $17
 $28
 $(21) $24
_________________
(1)
Reflected in our condensed consolidated statements of income as “Restructuring charge.” These charges are not allocated to our reportable segments.

5. Goodwill and Other Intangible Assets
The following table presents the changes in the carrying amount of goodwill for the nine months ended September 30, 2017:
 General rentals Trench,
power and pump		 Total
Balance at January 1, 2017 (1)$2,797
 $463
 $3,260
Goodwill related to acquisitions (2)212
 2
 214
Foreign currency translation14
 5
 19
Balance at September 30, 2017 (1)3,023
 470
 3,493
_________________
(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)For additional detail on the April 2017 acquisition of NES, which accounted for most of the goodwill related to acquisitions, see note 2 to our condensed consolidated financial statements.
Other intangible assets were comprised of the following at September 30, 2017 and December 31, 2016:
 September 30, 2017
 
Weighted-Average Remaining
Amortization Period
 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Amount
Non-compete agreements27 months  $67
   $60
   $7
 
Customer relationships9 years  $1,590
   $838
   $752
 

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



 December 31, 2016
 
Weighted-Average Remaining
Amortization Period
 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Amount
Non-compete agreements28 months  $70
   $57
   $13
 
Customer relationships10 years  $1,465
   $737
   $728
 
Trade names and associated trademarks4 months  $80
   $79
   $1
 

Our other intangibles assets, net at September 30, 2017 include the following assetsliability balance associated with the acquisition of NESprogram is not material.
Asset Impairment Charges
In addition to the restructuring charges discussed in note 2 to our condensed consolidated financial statements. No residual value has been assigned to these assets which are being amortized usingabove, during the sum of the years' digits method, which we believe best reflects the estimated pattern in which the economic benefits will be consumed.
 September 30, 2017
 Weighted-Average Remaining
Amortization Period 		  Net Carrying
Amount
Customer relationships10 years  $125
Amortization expense for other intangible assets was $41 and $42 for the threesix months ended SeptemberJune 30, 2017 and 2016, respectively, and $125 and $132 for the nine months ended September 30, 2017 and 2016, respectively.
As2020, we recorded asset impairment charges of September 30, 2017, estimated amortization expense for other intangible assets for each of the next five years and thereafter is as follows:  
2017 $41
 
2018150  
2019132  
2020114  
202195  
Thereafter227  
Total $759
 

6. Derivatives
We recognize all derivative instruments as either assets or liabilities at fair value, and recognize changes$26 in the fair value of the derivative instruments based on the designation of the derivative. We are exposed to certain risks relating to our ongoing business operations. During the nine months ended September 30, 2017 and 2016, the risks we managed using derivative instruments were diesel price risk and foreign currency exchange rate risk. At September 30, 2017, we had outstanding fixed price swap contracts on diesel purchasesgeneral rentals segment. The asset impairment charges, which were entered intonot related to mitigate the price risk associated with forecasted purchasesCOVID-19, are primarily reflected in depreciation of diesel. During the nine months ended September 30, 2017, we entered into forward contracts to purchase Canadian dollars to mitigate the foreign currency exchange rate risk associated with certain Canadian dollar denominated intercompany loans. There were no outstanding forward contracts to purchase Canadian dollars at September 30, 2017.
Fixed Price Diesel Swaps
The fixed price swap contracts on diesel purchases that were outstanding at September 30, 2017 were designated and qualify as cash flow hedges and the effective portion of the gain or loss on these contracts is reported as a component of accumulated other comprehensive income and is reclassified into earnings in the period during which the hedged transaction affects earnings (i.e., when the hedged gallons of diesel are used). The remaining gain or loss on the fixed price swap contracts in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion), is recognizedrental equipment in our condensed consolidated statements of income and principally relate to the discontinuation of certain equipment programs. There were 0 material asset impairment charges during the current period. As of Septemberthree months ended June 30, 2017, we had outstanding fixed price swap contracts covering 2.7 million gallons of diesel which will be purchased throughout 2017 and 2018.
Foreign Currency Forward Contracts
The forward contracts to purchase Canadian dollars, which were all settled as of September 30, 2017, represented derivative instruments not designated as hedging instruments and gains2020 or losses due to changes in the fair value of the forward contracts were recognized in our consolidated statements of income during the period in which the changes in fair value

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



occurred. During the three and ninesix months ended SeptemberJune 30, 2017, forward contracts were used to purchase $326 and $728 Canadian dollars, respectively, representing the total amount due at maturity for certain Canadian dollar denominated intercompany loans that were settled during the three and nine months ended September 30, 2017. Upon maturity, the proceeds from the forward contracts were used to pay down the Canadian dollar denominated intercompany loans.2019.
Financial Statement Presentation
As of September 30, 2017 and December 31, 2016, immaterial amounts ($1 or less) were reflected in prepaid expenses and other assets, accrued expenses and other liabilities, and accumulated other comprehensive income in our condensed consolidated balance sheets associated with the outstanding fixed price swap contracts that were designated and qualify as cash flow hedges.
The effect of our derivative instruments on our condensed consolidated statements of income for the three and nine months ended September 30, 2017 and 2016 was as follows:
   Three Months Ended September 30, 2017 Three Months Ended September 30, 2016
 
Location of income
(expense)
recognized on
derivative/hedged item
 
Amount of  income
(expense)
recognized
on derivative
 
Amount of  income
(expense)
recognized
on hedged item
 
Amount of  income
(expense)
recognized
on derivative
 
Amount of  income
(expense)
recognized
on hedged item
Derivatives designated as hedging instruments:         
Fixed price diesel swaps
Other income
(expense), net (1)
  $ *
    $ *
  
 
Cost of equipment
rentals, excluding
depreciation (2),
(3)
  *
 $(4) (1) $(6)
Derivatives not designated as hedging instruments:         
Foreign currency forward contracts (4)
Other income
(expense), net
 8
 (8) (4) 4
   Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
 
Location of income
(expense)
recognized on
derivative/hedged item
 
Amount of  income
(expense)
recognized
on derivative
 
Amount of  income
(expense)
recognized
on hedged item
 
Amount of  income
(expense)
recognized
on derivative
 
Amount of  income
(expense)
recognized
on hedged item
Derivatives designated as hedging instruments:         
Fixed price diesel swaps
Other income
(expense), net (1)
  $ *
    $ *
  
 
Cost of equipment
rentals, excluding
depreciation (2),
(3)
  *
 $(14) (5) $(17)
Derivatives not designated as hedging instruments:         
Foreign currency forward contracts (4)
Other income
(expense), net
 15
 (15) (1) 1
*Amounts are insignificant (less than $1).
(1)Represents the ineffective portion of the fixed price diesel swaps.
(2)Amounts recognized on derivative represent the effective portion of the fixed price diesel swaps.
(3)
Amounts recognized on hedged item reflect the use of 1.7 million and 2.7 million gallons and of diesel covered by the fixed price swaps during the three months ended September 30, 2017 and 2016, respectively, and the use of 5.5 million and 7.7 million gallons and of diesel covered by the fixed price swaps during the nine months ended September 30, 2017

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



and 2016, respectively. These amounts are reflected, net of cash received from, or paid to, the counterparties to the fixed price swaps, in operating cash flows in our condensed consolidated statement of cash flows.
(4)Insignificant amounts were reflected in our condensed consolidated statement of cash flows associated with the forward contracts to purchase Canadian dollars, as the cash impact of the gains/losses recognized on the derivatives were offset by the gains/losses recognized on the hedged items.

7.
5. Fair Value Measurements
We account for certainAs of June 30, 2020 and December 31, 2019, the amounts of our assets and liabilities that were accounted for at fair value. We categorize each of our fairvalue 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.
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.
Assets and Liabilities Measured at Fair Value
As
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Table of September 30, 2017 and December 31, 2016, our only assets and liabilities measured at fair value were our fixed price diesel swaps contracts, which are Level 2 derivatives measured at fair value on a recurring basis. As of September 30, 2017 and December 31, 2016, immaterial amounts ($1 or less) were reflectedContents
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in prepaid expenses and other assets, and accrued expenses and other liabilities in our condensed consolidated balance sheets, reflecting the fair values of the fixed price diesel swaps contracts. As discussed in note 6 to the condensed consolidated financial statements, we entered into the fixed price swap contracts on diesel purchases to mitigate the price risk associated with forecasted purchases of diesel. Fair value is determined based on observable market data. As of September 30, 2017, we have fixed price swap contracts that mature throughout 2017 and 2018 covering 2.7 million gallons of diesel which we will buy at the average contract price of $2.58millions, except per gallon, while the average forward price for the hedged gallons was $2.78 per gallon as of September 30, 2017.share data, unless otherwise indicated)


Fair Value of Financial Instruments
The carrying amounts reported in our condensed 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, facility, accounts receivable securitization facility and capitalterm loan facilities and finance leases approximated their book values as of SeptemberJune 30, 20172020 and December 31, 2016.2019. The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of SeptemberJune 30, 20172020 and December 31, 20162019 have been calculated based upon available market information, and were as follows:
 June 30, 2020December 31, 2019
 Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Senior notes$8,500  $8,718  $7,755  $8,176  
6. Debt
Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following:
June 30, 2020December 31, 2019
Accounts Receivable Securitization Facility expiring 2021 (1) (2)$743  $929  
$3.75 billion ABL Facility expiring 2024 (1) (3)47  1,638  
Term loan facility expiring 2025 (1)975  979  
5 1/2 percent Senior Notes due 2025 (3)
795  795  
4 5/8 percent Senior Notes due 2025
743  742  
5 7/8 percent Senior Notes due 2026
999  999  
6 1/2 percent Senior Notes due 2026
1,089  1,089  
5 1/2 percent Senior Notes due 2027
993  992  
3 7/8 percent Senior Secured Notes due 2027
741  741  
4 7/8 percent Senior Notes due 2028 (4)
1,653  1,652  
4 7/8 percent Senior Notes due 2028 (4)
4  4  
5 1/4 percent Senior Notes due 2030
742  741  
4 percent Senior Notes due 2030 (5)741  —  
Finance leases140  127  
Total debt10,405  11,428  
Less short-term portion (6)(806) (997) 
Total long-term debt$9,599  $10,431  
 ___________________

(1)The table below presents financial information associated with our variable rate indebtedness as of and for the six months ended June 30, 2020. 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 facilityAccounts receivable securitization facilityTerm loan facility
Borrowing capacity, net of letters of credit$3,640  $56  $—  
Letters of credit52  
Interest rate at June 30, 20201.6 %1.6 %1.9 %
Average month-end debt outstanding765  784  985  
Weighted-average interest rate on average debt outstanding2.4 %2.0 %2.6 %
Maximum month-end debt outstanding1,494  811  988  
22
 September 30, 2017 December 31, 2016
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Senior notes$7,228
 $7,616
 $5,506
 $5,715

8. Debt

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





Debt,(2)Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of unamortized original issue discounts or premiums,applicable reserves and unamortized debt issuance costs, consistsother deductions, exceeds the outstanding loans. As of June 30, 2020, there were $822 of receivables, net of applicable reserves and other deductions, in the collateral pool. In April 2020, we amended the accounts receivable securitization facility to adjust, on a temporary basis, the financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The adjustments to these tests were intended to make compliance with such tests more likely for the calendar months ending April 30, 2020 and May 31, 2020, and we were in compliance with such tests for these months. In June 2020, the accounts receivable securitization facility was further amended to (a) extend the maturity date, which may be further extended on a 364-day basis by mutual agreement with the purchasers under the facility, to June 25, 2021, (b) reduce the size of the following:facility from $975 to $800 and (c) adjust, for the calendar months ending on or after June 30, 2020, the financial tests (including the method of calculation) relating to (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding.
(3)The decrease in the outstanding debt under the ABL facility since December 31, 2019 primarily reflects using proceeds (i) from the issuance of 4 percent Senior Notes (the “4 percent Notes”) discussed below and (ii) from operations to reduce borrowings under the ABL facility. At the time of the offering of the 4 percent Notes, we indicated our expectation that we would re-borrow an amount equal to the net proceeds from the offering (discussed below), along with additional borrowings under the ABL facility, to redeem our 5 1/2 percent Senior Notes due 2025 on or after July 15, 2020. Prior to issuing any redemption notice for the 5 1/2 percent Senior Notes due 2025, we considered the impact of COVID-19 on liquidity, and assessed our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. In July 2020, we issued a redemption notice for the 5 1/2 percent Senior Notes due 2025, and the redemption is expected to occur in August 2020. Upon redemption, we expect to recognize a loss of approximately $27 in interest expense, net, reflecting the difference between the net carrying amount and the total purchase price of the redeemed notes.
 September 30, 2017 December 31, 2016
Accounts Receivable Securitization Facility expiring 2018 (1)$666
 $568
$3.0 billion ABL Facility expiring 2021 (2)408
 1,645
7 5/8 percent Senior Notes due 2022 (3)
223
 469
6 1/8 percent Senior Notes due 2023 (4)
—
 936
4 5/8 percent Senior Secured Notes due 2023
992
 991
5 3/4 percent Senior Notes due 2024
840
 839
5 1/2 percent Senior Notes due 2025
793
 792
4 5/8 percent Senior Notes due 2025 (5)
739
 —
5 7/8 percent Senior Notes due 2026 (6)
998
 740
5 1/2 percent Senior Notes due 2027 (7)
990
 739
4 7/8 percent Senior Notes due 2028 (8)
912
 —
4 7/8 percent Senior Notes due 2028 (9)
741
 —
Capital leases69
 71
Total debt (10)8,371
 7,790
Less short-term portion (11)(694) (597)
Total long-term debt$7,677
 $7,193
(4)URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. 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.
 ___________________

(1)
In August 2017, the accounts receivable securitization facility was amended, primarily to increase the facility size and to extend the maturity date which may be further extended on a 364-day basis by mutual agreement with the purchasers under the facility. The size(5)In February 2020, URNA issued $750 aggregate principal amount of 4 percent Notes which are due July 15, 2030. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 4 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of the facility, which expires on August 28, 2018, was increased to $675. At September 30, 2017, $9 was available under our accounts receivable securitization facility. The interest rate applicable to the accounts receivable securitization facility was 2.0 percent at September 30, 2017. During the nine months ended September 30, 2017, the monthly average amount outstanding under the accounts receivable securitization facility was $584, and the weighted-average interest rate thereon was 1.8 percent. The maximum month-end amount outstanding under the accounts receivable securitization facility during the nine months ended September 30, 2017 was $667. Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of September 30, 2017, there were $769 of receivables, net of applicable reserves and other deductions, in the collateral pool.
(2)
In September 2017, the size of the ABL facility was increased to $3.0 billion. At September 30, 2017, $2.5 billion was available under our ABL facility, net of $39 of letters of credit. The interest rate applicable to the ABL facility was 2.8 percent at September 30, 2017. During the nine months ended September 30, 2017, the monthly average amount outstanding under the ABL facility was $1.2 billion, and the weighted-average interest rate thereon was 2.6 percent. The maximum month-end amount outstanding under the ABL facility during the nine months ended September 30, 2017 was $1.8 billion. As discussed below, pending the payment of the purchase price for the Neff acquisition discussed in note 2 to the condensed consolidated financial statements, a portion of the net proceeds from debt issued in the third quarter of 2017 was used to reduce borrowings under the ABL facility. Upon the closing of the Neff acquisition on October 2, 2017, we used borrowings under the ABL facility to partially fund the Neff acquisition.
(3)
In June 2017, we redeemed $250 principal amount of our 7 5/8 percent Senior Notes. Upon redemption, we recognized a loss of $12 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the redeemed notes. In September 2017, we gave notice of our intention to redeem the remaining 7 5/8 percent Senior Notes in October 2017 using borrowings under the ABL facility.
(4)
In August 2017, we redeemed all of our 6 1/8 percent Senior Notes. Upon redemption, we recognized a loss of $31 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the redeemed notes.
(5)
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

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



URNA. The 45/8 percent Notes may be redeemed on or after OctoberJuly 15, 2020,2025, at specified redemption prices that range from 102.313102.000 percent in 2020,2025, to 100 percent in 20222028 and thereafter, in each case, plus accrued and unpaid interest, if any. In addition, at any time on or prior to July 15, 2023, up to 40 percent of the aggregate principal amount of the 4 percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 104.000 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 45/8 percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens;liens and (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,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 covenant relatingrequirements to dividendsprovide subsidiary guarantees and other distributions, stock repurchases and redemptions and other restricted payments andto make an offer to repurchase the requirements relating to additional subsidiary guarantorsnotes upon the occurrence of a change of control will not apply to URNA and its restricted subsidiaries during any period when the 45/8 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 5/8percent 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 net proceeds from the 4 5/8 percent Notes were
(6)As of June 30, 2020, our short-term debt primarily used to partially fund the Neff acquisition discussed in note 2 to the condensed consolidated financial statements. Pending the paymentreflects $743 of the purchase price for the Neff acquisition, a portion of the net proceeds from the issuance was used to reduce borrowings under the ABLour accounts receivable securitization facility. The acquisition closed on October 2, 2017. Upon closing of the Neff acquisition, we used available cash and borrowings under the ABL facility to finance the Neff acquisition.
(6)
In February 2017, in connection with the NES acquisition discussed in note 2 to the condensed consolidated financial statements, URNA issued $250 principal amount of 5 7/8 percent Senior Notes (the "5 7/8 percent Notes") as an add-on to our existing 5 7/8 percent Notes. The net proceeds from the issuance were $258 (including the original issue premium and after deducting offering expenses). After the February 2017 issuance, the aggregate principal amount of outstanding 5 7/8 percent Notes was $1.0 billion. The newly issued notes have identical terms, and are fungible, with the 5 7/8 percent Notes outstanding at December 31, 2016. The carrying value of the 5 7/8 percent Notes includes the $11 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.
(7)
In February 2017, in connection with the NES acquisition discussed in note 2 to the condensed consolidated financial statements, URNA issued $250 principal amount of 5 1/2 percent Senior Notes due 2027 (the "2027 5 1/2 percent Senior Notes") as an add-on to our existing 2027 5 1/2 percent Senior Notes. The net proceeds from the issuance were $250 (including the original issue premium and after deducting offering expenses). After the February 2017 issuance, the aggregate principal amount of outstanding 2027 5 1/2 percent Senior Notes was $1.0 billion. The newly issued notes have identical terms, and are fungible, with the 2027 5 1/2 percent Senior Notes outstanding at December 31, 2016. The carrying value of the 2027 5 1/2 percent Senior 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 Senior Notes is 5.5 percent.
(8)
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,

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)



thereon. The net proceeds from the Initial 4 7/8 percent Notes were primarily used to fund the redemption of all of our 6 1/8 percent Senior Notes that is discussed above.
(9)
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 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 carrying value of the Subsequent 4 7/8 percent Notes includes $2 of the unamortized original issue premium, which is being amortized through the maturity date in 2028. The effective interest rate on the Subsequent 4 7/8 percent Notes is 4.84 percent. The net proceeds from the Subsequent 4 7/8 percent Notes were primarily used to partially fund the Neff acquisition discussed in note 2 to the condensed consolidated financial statements. Pending the payment of the purchase price for the Neff acquisition, a portion of the net proceeds from the issuance was used to reduce borrowings under the ABL facility. The acquisition closed on October 2, 2017. Upon closing of the Neff acquisition, we used available cash and borrowings under the ABL facility to finance the Neff acquisition.
(10)
As discussed above, we completed the Neff acquisition on October 2, 2017. The aggregate consideration paid to complete the acquisition was approximately $1.3 billion. Total debt as of September 30, 2017 reflects approximately $1.4 billion of debt issued in connection with the acquisition (this amount reflects $2.425 billion principal amount of debt issued in the third quarter of 2017, net of (i) cash paid to redeem $925 principal amount of 6 1/8 percent Senior Notes and (ii) fees and expenses associated with the issued debt), as discussed above. Upon closing, we paid the consideration due to holders of Neff common stock and options using available cash and drawings on the ABL facility. After payment of such consideration, total outstanding debt was approximately $9.7 billion.
(11)As of September 30, 2017, our short-term debt primarily reflects $666 of borrowings under our accounts receivable securitization facility.
Loan Covenants and Compliance
As of SeptemberJune 30, 2017,2020, we were in compliance with the covenants and other provisions of the ABL, facility, the accounts receivable securitization facilityand 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 maintenance 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
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)


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 SeptemberJune 30, 2017,2020, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial maintenance 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.
97. Leases
As discussed in note 2 to the condensed consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such lease revenue represented 77 percent of our total revenues for the six months ended June 30, 2020). LegalSee note 2 to the condensed consolidated financial statements for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842).
We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and Regulatory Mattersthe 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 right-of-use ("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 2 to the condensed consolidated financial statements. Apart from this re-rent revenue, 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 use the practical expedient that allows us to 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 as of June 30, 2020 and December 31, 2019, and for the three and six months ended June 30, 2020 and 2019.
26
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





ClassificationJune 30, 2020December 31, 2019
Assets
Operating lease assetsOperating lease right-of-use assets$666  $669  
Finance lease assetsRental equipment292  286  
Less accumulated depreciation(88) (89) 
Rental equipment, net204  197  
Property and equipment, net:
Non-rental vehicles8  8  
Buildings18  18  
Less accumulated depreciation and amortization(9) (15) 
Property and equipment, net17  11  
Total leased assets887  877  
Liabilities
Current
OperatingAccrued expenses and other liabilities174  178  
FinanceShort-term debt and current maturities of long-term debt53  58  
Long-term
OperatingOperating lease liabilities532  533  
FinanceLong-term debt87  69  
Total lease liabilities$846  $838  

Lease costClassificationThree Months Ended June 30, 2020Three Months Ended June 30, 2019Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Operating lease cost (1)Cost of equipment rentals, excluding depreciation (1)$86  $86  $178  $175  
Selling, general and administrative expenses3  2  6  5  
Restructuring charge1  7  2  13  
Finance lease cost
Amortization of leased assetsDepreciation of rental equipment8  7  15  14  
Non-rental depreciation and amortization1  —  1  1  
Interest on lease liabilitiesInterest expense, net3  1  6  3  
Sublease income (2)(30) (37) (64) (72) 
Net lease cost$72  $66  $144  $139  
_________________
(1) Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation includes $27 and $29 for the three months ended, June 30, 2020 and 2019, respectively, and $58 and $63 for the six months ended June 30, 2020 and 2019, respectively, 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.
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UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)


Maturity of lease liabilities (as of June 30, 2020)Operating leases (1)Finance leases (2)
2020$105  $28  
2021192  58  
2022158  33  
2023124  22  
202490  3  
Thereafter132  5  
Total801  149  
Less amount representing interest(95) (9) 
Present value of lease liabilities$706  $140  
_________________
(1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of June 30, 2020. 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 rateJune 30, 2020December 31, 2019
Weighted-average remaining lease term (years)
Operating leases4.84.8
Finance leases3.13.2
Weighted-average discount rate
Operating leases4.5 %4.7 %
Finance leases3.7 %4.0 %
Other informationSix Months Ended June 30, 2020Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$104  $102  
Operating cash flows from finance leases6  3  
Financing cash flows from finance leases26  22  
Leased assets obtained in exchange for new operating lease liabilities92  104  
Leased assets obtained in exchange for new finance lease liabilities$39  $17  
8. Legal and Regulatory Matters
We are subject to a number of claims and proceedings that generally arise in the ordinary course of our business. These matters include, but are not limited to, general liability claims (including personal injury, property and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations, contract and real estate matters, and other general business litigation. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals for matters where we have established them, we currently believe that any liabilities ultimately resulting from such claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
10.9. Earnings Per Share
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. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
26
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Numerator:       
Net income available to common stockholders$199
 $187
 449
 413
Denominator:       
Denominator for basic earnings per share—weighted-average common shares84,663
 85,945
 84,585
 88,175
Effect of dilutive securities:       
Employee stock options398
 278
 401
 281
Restricted stock units531
 222
 488
 168
Denominator for diluted earnings per share—adjusted weighted-average common shares85,592
 86,445
 85,474
 88,624
Basic earnings per share$2.36
 $2.18
 $5.31
 $4.68
Diluted earnings per share$2.33
 $2.16
 $5.26
 $4.66

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
11.
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Numerator:
Net income available to common stockholders$212  $270  385  445  
Denominator:
Denominator for basic earnings per share—weighted-average common shares72,161  78,264  73,101  78,829  
Effect of dilutive securities:
Employee stock options12  108  14  200  
Restricted stock units102  95  155  211  
Denominator for diluted earnings per share—adjusted weighted-average common shares72,275  78,467  73,270  79,240  
Basic earnings per share$2.94  $3.45  $5.26  $5.65  
Diluted earnings per share$2.93  $3.44  $5.25  $5.62  
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)


10. Condensed Consolidating Financial Information of Guarantor Subsidiaries
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 other than with respect to the guarantees of the 7 5/8 percent Senior Notes due 2022 and the 5 3/4 percent Senior Notes due 2024, 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.
URNA covenantsCovenants in the ABL, facility, accounts receivable securitization facilityand 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 SeptemberJune 30, 2017,2020, the amount available for distribution under the most restrictive of these covenants was $536.$508. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of SeptemberJune 30, 2017,2020, 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 $1.234$3.192 billion.
The condensed consolidating financial information of Parent and its subsidiaries is as follows:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2017
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
 Foreign SPV 
ASSETS             
Cash and cash equivalents$—
 $23
 $—
 $301
 $—
 $—
 $324
Accounts receivable, net—
 39
 —
 123
 989
 —
 1,151
Intercompany receivable (payable)698
 (481) (204) (129) —
 116
 —
Inventory—
 74
 —
 8
 —
 —
 82
Prepaid expenses and other assets6
 74
 —
 2
 —
 —
 82
Total current assets704
 (271) (204) 305
 989
 116
 1,639
Rental equipment, net—
 6,819
 —
 572
 —
 —
 7,391
Property and equipment, net38
 338
 33
 42
 —
 —
 451
Investments in subsidiaries1,488
 1,206
 1,074
 —
 —
 (3,768) —
Goodwill—
 3,226
 —
 267
 —
 —
 3,493
Other intangible assets, net—
 709
 —
 50
 —
 —
 759
Other long-term assets4
 7
 —
 —
 —
 —
 11
Total assets$2,234
 $12,034
 $903
 $1,236
 $989
 $(3,652) $13,744
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)             
Short-term debt and current maturities of long-term debt$1
 $25
 $—
 $2
 $666
 $—
 $694
Accounts payable—
 564
 —
 48
 —
 —
 612
Accrued expenses and other liabilities—
 415
 17
 34
 1
 —
 467
Total current liabilities1
 1,004
 17
 84
 667
 —
 1,773
Long-term debt1
 7,555
 118
 3
 —
 —
 7,677
Deferred taxes21
 1,916
 —
 75
 —
 —
 2,012
Other long-term liabilities—
 71
 —
 —
 —
 —
 71
Total liabilities23
 10,546
 135
 162
 667
 —
 11,533
Total stockholders’ equity (deficit)2,211
 1,488
 768
 1,074
 322
 (3,652) 2,211
Total liabilities and stockholders’ equity (deficit)$2,234
 $12,034
 $903
 $1,236
 $989
 $(3,652) $13,744





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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)




CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016June 30, 2020
 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
 ForeignSPV
ASSETS
Cash and cash equivalents$—  $36  $—  $91  $—  $—  $127  
Accounts receivable, net—  —  —  119  1,107  —  1,226  
Intercompany receivable (payable)2,684  (2,577) (99) (9) 1  —  —  
Inventory—  97  —  10  —  —  107  
Prepaid expenses and other assets—  135  —  27  —  —  162  
Total current assets2,684  (2,309) (99) 238  1,108  —  1,622  
Rental equipment, net—  8,383  —  703  —  —  9,086  
Property and equipment, net107  393  64  45  —  —  609  
Investments in subsidiaries1,125  1,524  1,023  —  —  (3,672) —  
Goodwill—  4,756  —  379  —  —  5,135  
Other intangible assets, net—  712  —  49  —  —  761  
Operating lease right-of-use assets—  182  418  66  —  —  666  
Other long-term assets13  8  —  —  —  —  21  
Total assets$3,929  $13,649  $1,406  $1,480  $1,108  $(3,672) $17,900  
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt$—  $61  $—  $2  $743  $—  $806  
Accounts payable—  280  —  36  —  —  316  
Accrued expenses and other liabilities—  632  121  45  1  —  799  
Total current liabilities—  973  121  83  744  —  1,921  
Long-term debt—  9,583  7  9  —  —  9,599  
Deferred taxes22  1,703  —  95  —  —  1,820  
Operating lease liabilities—  144  334  54  —  —  532  
Other long-term liabilities—  121  —  —  —  —  121  
Total liabilities22  12,524  462  241  744  —  13,993  
Total stockholders’ equity (deficit)3,907  1,125  944  1,239  364  (3,672) 3,907  
Total liabilities and stockholders’ equity (deficit)$3,929  $13,649  $1,406  $1,480  $1,108  $(3,672) $17,900  



29
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
 Foreign SPV 
ASSETS             
Cash and cash equivalents$—
 $21
 $—
 $291
 $—
 $—
 $312
Accounts receivable, net—
 38
 —
 96
 786
 —
 920
Intercompany receivable (payable)336
 (137) (188) (115) —
 104
 —
Inventory—
 61
 —
 7
 —
 —
 68
Prepaid expenses and other assets5
 51
 —
 5
 —
 —
 61
Total current assets341
 34
 (188) 284
 786
 104
 1,361
Rental equipment, net—
 5,709
 —
 480
 —
 —
 6,189
Property and equipment, net38
 326
 26
 40
 —
 —
 430
Investments in subsidiaries1,292
 1,013
 978
 —
 —
 (3,283) —
Goodwill—
 3,013
 —
 247
 —
 —
 3,260
Other intangible assets, net—
 686
 —
 56
 —
 —
 742
Other long-term assets—
 6
 —
 —
 —
 —
 6
Total assets$1,671
 $10,787
 $816
 $1,107
 $786
 $(3,179) $11,988
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)             
Short-term debt and current maturities of long-term debt$1
 $25
 $—
 $3
 $568
 $—
 $597
Accounts payable—
 217
 —
 26
 —
 —
 243
Accrued expenses and other liabilities—
 305
 13
 25
 1
 —
 344
Total current liabilities1
 547
 13
 54
 569
 —
 1,184
Long-term debt2
 7,076
 111
 4
 —
 —
 7,193
Deferred taxes20
 1,805
 —
 71
 —
 —
 1,896
Other long-term liabilities—
 67
 —
 —
 —
 —
 67
Total liabilities23
 9,495
 124
 129
 569
 —
 10,340
Total stockholders’ equity (deficit)1,648
 1,292
 692
 978
 217
 (3,179) 1,648
Total liabilities and stockholders’ equity (deficit)$1,671
 $10,787
 $816
 $1,107
 $786
 $(3,179) $11,988
















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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)






CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOMEBALANCE SHEET
For the Three Months Ended September 30, 2017December 31, 2019
 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
 ForeignSPV
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 assets2,255  (1,870) (112) 209  1,360  —  1,842  
Rental equipment, net—  8,995  —  792  —  —  9,787  
Property and equipment, net76  400  78  50  —  —  604  
Investments in subsidiaries1,509  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 assets12  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 taxes22  1,768  —  97  —  —  1,887  
Operating lease liabilities—  151  323  59  —  —  533  
Other long-term liabilities—  91  —  —  —  —  91  
Total liabilities22  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  











30
              
              
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
Foreign SPV 
Revenues:             
Equipment rentals$—
 $1,407
 $—
 $129
 $—
 $—
 $1,536
Sales of rental equipment—
 118
 —
 21
 —
 —
 139
Sales of new equipment—
 36
 —
 4
 —
 —
 40
Contractor supplies sales—
 18
 —
 3
 —
 —
 21
Service and other revenues—
 27
 —
 3
 —
 —
 30
Total revenues—
 1,606
 —
 160
 —
 —
 1,766
Cost of revenues:             
Cost of equipment rentals, excluding depreciation—
 502
 —
 55
 —
 —
 557
Depreciation of rental equipment—
 266
 —
 24
 —
 —
 290
Cost of rental equipment sales—
 73
 —
 11
 —
 —
 84
Cost of new equipment sales—
 31
 —
 3
 —
 —
 34
Cost of contractor supplies sales—
 12
 —
 2
 —
 —
 14
Cost of service and other revenues—
 12
 —
 2
 —
 —
 14
Total cost of revenues—
 896
 —
 97
 —
 —
 993
Gross profit—
 710
 —
 63
 —
 —
 773
Selling, general and administrative expenses42
 167
 —
 19
 9
 —
 237
Merger related costs—
 16
 —
 —
 —
 —
 16
Restructuring charge—
 8
 —
 1
 —
 —
 9
Non-rental depreciation and amortization3
 54
 —
 6
 —
 —
 63
Operating (loss) income(45) 465
 —
 37
 (9) —
 448
Interest (income) expense, net(5) 133
 1
 1
 3
 (2) 131
Other (income) expense, net(144) 154
 —
 10
 (25) —
 (5)
Income (loss) before provision for income taxes104
 178
 (1) 26
 13
 2
 322
Provision for income taxes39
 73
 —
 7
 4
 —
 123
Income (loss) before equity in net earnings (loss) of subsidiaries65
 105
 (1) 19
 9
 2
 199
Equity in net earnings (loss) of subsidiaries134
 29
 19
 —
 —
 (182) —
Net income (loss)199
 134
 18
 19
 9
 (180) 199
Other comprehensive income (loss)42
 42
 41
 33
 —
 (116) 42
Comprehensive income (loss)$241
 $176
 $59
 $52
 $9
 $(296) $241



31
Table of Contents
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)






CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended SeptemberJune 30, 20162020

 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
ForeignSPV
Revenues:
Equipment rentals$—  $1,521  $—  $120  $1  $—  $1,642  
Sales of rental equipment—  161  —  15  —  —  176  
Sales of new equipment—  48  —  5  —  —  53  
Contractor supplies sales—  20  —  3  —  —  23  
Service and other revenues—  41  —  4  —  —  45  
Total revenues—  1,791  —  147  1  —  1,939  
Cost of revenues:
Cost of equipment rentals, excluding depreciation—  590  —  56  1  —  647  
Depreciation of rental equipment—  363  —  32  —  —  395  
Cost of rental equipment sales—  97  —  8  —  —  105  
Cost of new equipment sales—  42  —  4  —  —  46  
Cost of contractor supplies sales—  14  —  2  —  —  16  
Cost of service and other revenues—  27  —  2  —  —  29  
Total cost of revenues—  1,133  —  104  1  —  1,238  
Gross profit—  658  —  43  —  —  701  
Selling, general and administrative expenses(31) 225  —  25  7  (4) 222  
Restructuring charge—  3  —  —  —  —  3  
Non-rental depreciation and amortization6  81  —  8  —  —  95  
Operating income (loss)25  349  —  10  (7) 4  381  
Interest (income) expense, net(10) 137  —  —  3  —  130  
Other (income) expense, net(158) 180  —  12  (38) 4  —  
Income (loss) before provision (benefit) for income taxes193  32  —  (2) 28  —  251  
Provision (benefit) for income taxes46  (12) —  (1) 6  —  39  
Income (loss) before equity in net earnings (loss) of subsidiaries147  44  —  (1) 22  —  212  
Equity in net earnings (loss) of subsidiaries65  21  (2) —  —  (84) —  
Net income (loss)212  65  (2) (1) 22  (84) 212  
Other comprehensive income (loss)45  45  40  43  —  (128) 45  
Comprehensive income (loss)$257  $110  $38  $42  $22  $(212) $257  

31
              
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
 Foreign SPV 
Revenues:             
Equipment rentals$—
 $1,208
 $—
 $114
 $—
 $—
 $1,322
Sales of rental equipment—
 99
 —
 13
 —
 —
 112
Sales of new equipment—
 28
 —
 2
 —
 —
 30
Contractor supplies sales—
 17
 —
 2
 —
 —
 19
Service and other revenues—
 22
 —
 3
 —
 —
 25
Total revenues—
 1,374
 —
 134
 —
 —
 1,508
Cost of revenues:             
Cost of equipment rentals, excluding depreciation—
 435
 —
 51
 —
 —
 486
Depreciation of rental equipment—
 227
 —
 23
 —
 —
 250
Cost of rental equipment sales—
 61
 —
 7
 —
 —
 68
Cost of new equipment sales—
 23
 —
 2
 —
 —
 25
Cost of contractor supplies sales—
 11
 —
 2
 —
 —
 13
Cost of service and other revenues—
 11
 —
 (1) —
 —
 10
Total cost of revenues—
 768
 —
 84
 —
 —
 852
Gross profit—
 606
 —
 50
 —
 —
 656
Selling, general and administrative expenses2
 151
 —
 18
 8
 —
 179
Restructuring charge—
 4
 —
 —
 —
 —
 4
Non-rental depreciation and amortization3
 52
 —
 6
 —
 —
 61
Operating (loss) income(5) 399
 —
 26
 (8) —
 412
Interest (income) expense, net(1) 109
 1
 1
 2
 (2) 110
Other (income) expense, net(123) 136
 —
 9
 (23) —
 (1)
Income (loss) before provision for income taxes119
 154
 (1) 16
 13
 2
 303
Provision for income taxes42
 64
 —
 5
 5
 —
 116
Income (loss) before equity in net earnings (loss) of subsidiaries77
 90
 (1) 11
 8
 2
 187
Equity in net earnings (loss) of subsidiaries110
 20
 11
 —
 —
 (141) —
Net income (loss)187
 110
 10
 11
 8
 (139) 187
Other comprehensive (loss) income(9) (9) (9) (7) —
 25
 (9)
Comprehensive income (loss)$178
 $101
 $1
 $4
 $8
 $(114) $178


32
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)





CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the NineThree Months Ended SeptemberJune 30, 2017
2019
             
Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
Foreign SPV  ForeignSPV
Revenues:             Revenues:
Equipment rentals$—
 $3,739
 $—
 $330
 $—
 $—
 $4,069
Equipment rentals$—  $1,798  $—  $161  $1  $—  $1,960  
Sales of rental equipment—
 334
 —
 44
 —
 —
 378
Sales of rental equipment—  181  —  16  —  —  197  
Sales of new equipment—
 113
 —
 13
 —
 —
 126
Sales of new equipment—  53  —  7  —  —  60  
Contractor supplies sales—
 53
 —
 7
 —
 —
 60
Contractor supplies sales—  24  —  3  —  —  27  
Service and other revenues—
 75
 —
 11
 —
 —
 86
Service and other revenues—  39  —  7  —  —  46  
Total revenues—
 4,314
 —
 405
 —
 —
 4,719
Total revenues—  2,095  —  194  1  —  2,290  
Cost of revenues:             Cost of revenues:
Cost of equipment rentals, excluding depreciation—
 1,397
 —
 159
 —
 —
 1,556
Cost of equipment rentals, excluding depreciation—  692  —  76  1  —  769  
Depreciation of rental equipment—
 738
 —
 66
 —
 —
 804
Depreciation of rental equipment—  367  —  32  —  —  399  
Cost of rental equipment sales—
 202
 —
 23
 —
 —
 225
Cost of rental equipment sales—  108  —  8  —  —  116  
Cost of new equipment sales—
 97
 —
 11
 —
 —
 108
Cost of new equipment sales—  45  —  6  —  —  51  
Cost of contractor supplies sales—
 37
 —
 5
 —
 —
 42
Cost of contractor supplies sales—  17  —  2  —  —  19  
Cost of service and other revenues—
 37
 —
 5
 —
 —
 42
Cost of service and other revenues—  20  —  5  —  —  25  
Total cost of revenues—
 2,508
 —
 269
 —
 —
 2,777
Total cost of revenues—  1,249  —  129  1  —  1,379  
Gross profit—
 1,806
 —
 136
 —
 —
 1,942
Gross profit—  846  —  65  —  —  911  
Selling, general and administrative expenses84
 483
 —
 57
 24
 —
 648
Selling, general and administrative expenses(32) 259  —  32  12  —  271  
Merger related costs—
 32
 —
 —
 —
 —
 32
Restructuring charge—
 27
 —
 1
 —
 —
 28
Restructuring charge—  6  —  —  —  —  6  
Non-rental depreciation and amortization11
 162
 —
 16
 —
 —
 189
Non-rental depreciation and amortization6  91  —  8  —  —  105  
Operating (loss) income(95) 1,102
 —
 62
 (24) —
 1,045
Operating income (loss)Operating income (loss)26  490  —  25  (12) —  529  
Interest (income) expense, net(10) 341
 2
 1
 8
 (4) 338
Interest (income) expense, net(17) 189  —  —  8  —  180  
Other (income) expense, net(387) 419
 —
 33
 (70) —
 (5)Other (income) expense, net(187) 213  —  15  (43) —  (2) 
Income (loss) before provision for income taxes302
 342
 (2) 28
 38
 4
 712
Provision for income taxes102
 140
 —
 7
 14
 —
 263
Income (loss) before equity in net earnings (loss) of subsidiaries200
 202
 (2) 21
 24
 4
 449
Income before provision (benefit) for income taxesIncome before provision (benefit) for income taxes230  88  —  10  23  —  351  
Provision (benefit) for income taxesProvision (benefit) for income taxes53  26  —  (3) 5  —  81  
Income before equity in net earnings (loss) of subsidiariesIncome before equity in net earnings (loss) of subsidiaries177  62  —  13  18  —  270  
Equity in net earnings (loss) of subsidiaries249
 47
 21
 —
 —
 (317) —
Equity in net earnings (loss) of subsidiaries93  31  10  —  —  (134) —  
Net income (loss)449
 249
 19
 21
 24
 (313) 449
Net income (loss)270  93  10  13  18  (134) 270  
Other comprehensive income (loss)75
 75
 75
 61
 —
 (211) 75
Other comprehensive income (loss)22  22  21  22  —  (65) 22  
Comprehensive income (loss)$524
 $324
 $94
 $82
 $24
 $(524) $524
Comprehensive income (loss)$292  $115  $31  $35  $18  $(199) $292  






33
32
Table of Contents
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)






CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the NineSix Months Ended SeptemberJune 30, 20162020
 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
ForeignSPV
Revenues:
Equipment rentals$—  $3,151  $—  $273  $1  $—  $3,425  
Sales of rental equipment—  350  —  34  —  —  384  
Sales of new equipment—  101  —  14  —  —  115  
Contractor supplies sales—  42  —  6  —  —  48  
Service and other revenues—  83  —  9  —  —  92  
Total revenues—  3,727  —  336  1  —  4,064  
Cost of revenues:
Cost of equipment rentals, excluding depreciation—  1,266  —  127  1  —  1,394  
Depreciation of rental equipment—  756  —  65  —  —  821  
Cost of rental equipment sales—  213  —  17  —  —  230  
Cost of new equipment sales—  88  —  12  —  —  100  
Cost of contractor supplies sales—  30  —  4  —  —  34  
Cost of service and other revenues—  52  —  5  —  —  57  
Total cost of revenues—  2,405  —  230  1  —  2,636  
Gross profit—  1,322  —  106  —  —  1,428  
Selling, general and administrative expenses6  415  —  50  23  (5) 489  
Restructuring charge—  5  —  —  —  —  5  
Non-rental depreciation and amortization11  168  —  16  —  —  195  
Operating (loss) income(17) 734  —  40  (23) 5  739  
Interest (income) expense, net(27) 285  —  —  8  —  266  
Other (income) expense, net(330) 376  —  26  (81) 5  (4) 
Income before provision (benefit) for income taxes340  73  —  14  50  —  477  
Provision (benefit) for income taxes80  (3) —  3  12  —  92  
Income before equity in net earnings (loss) of subsidiaries260  76  —  11  38  —  385  
Equity in net earnings (loss) of subsidiaries125  49  9  —  —  (183) —  
Net income (loss)385  125  9  11  38  (183) 385  
Other comprehensive (loss) income(61) (61) (55) (59) —  175  (61) 
Comprehensive income (loss)$324  $64  $(46) $(48) $38  $(8) $324  


33
              
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
 Foreign SPV 
Revenues:             
Equipment rentals$—
 $3,335
 $—
 $308
 $—
 $—
 $3,643
Sales of rental equipment—
 320
 —
 41
 —
 —
 361
Sales of new equipment—
 86
 —
 10
 —
 —
 96
Contractor supplies sales—
 52
 —
 8
 —
 —
 60
Service and other revenues—
 69
 —
 10
 —
 —
 79
Total revenues—
 3,862
 —
 377
 —
 —
 4,239
Cost of revenues:             
Cost of equipment rentals, excluding depreciation—
 1,246
 —
 145
 —
 —
 1,391
Depreciation of rental equipment—
 667
 —
 68
 —
 —
 735
Cost of rental equipment sales—
 193
 —
 22
 —
 —
 215
Cost of new equipment sales—
 71
 —
 8
 —
 —
 79
Cost of contractor supplies sales—
 35
 —
 6
 —
 —
 41
Cost of service and other revenues—
 30
 —
 2
 —
 —
 32
Total cost of revenues—
 2,242
 —
 251
 —
 —
 2,493
Gross profit—
 1,620
 —
 126
 —
 —
 1,746
Selling, general and administrative expenses10
 450
 —
 55
 18
 —
 533
Restructuring charge—
 7
 —
 1
 —
 —
 8
Non-rental depreciation and amortization11
 163
 —
 18
 —
 —
 192
Operating (loss) income(21) 1,000
 —
 52
 (18) —
 1,013
Interest (income) expense, net(4) 348
 2
 2
 5
 (4) 349
Other (income) expense, net(345) 382
 —
 29
 (69) —
 (3)
Income (loss) before provision for income taxes328
 270
 (2) 21
 46
 4
 667
Provision for income taxes121
 109
 —
 6
 18
 —
 254
Income (loss) before equity in net earnings (loss) of subsidiaries207
 161
 (2) 15
 28
 4
 413
Equity in net earnings (loss) of subsidiaries206
 45
 15
 —
 —
 (266) —
Net income (loss)413
 206
 13
 15
 28
 (262) 413
Other comprehensive income (loss)54
 54
 51
 41
 —
 (146) 54
Comprehensive income (loss)$467
 $260
 $64
 $56
 $28
 $(408) $467



34
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)






CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME
For the Six Months Ended June 30, 2019
 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
 ForeignSPV
Revenues:
Equipment rentals$—  $3,436  $—  $318  $1  $—  $3,755  
Sales of rental equipment—  354  —  35  —  —  389  
Sales of new equipment—  106  —  16  —  —  122  
Contractor supplies sales—  46  —  5  —  —  51  
Service and other revenues—  78  —  12  —  —  90  
Total revenues—  4,020  —  386  1  —  4,407  
Cost of revenues:
Cost of equipment rentals, excluding depreciation—  1,349  —  161  1  —  1,511  
Depreciation of rental equipment—  731  —  63  —  —  794  
Cost of rental equipment sales—  221  —  20  —  —  241  
Cost of new equipment sales—  91  —  14  —  —  105  
Cost of contractor supplies sales—  33  —  3  —  —  36  
Cost of service and other revenues—  41  —  7  —  —  48  
Total cost of revenues—  2,466  —  268  1  —  2,735  
Gross profit—  1,554  —  118  —  —  1,672  
Selling, general and administrative expenses21  442  —  59  29  —  551  
Merger related costs—  1  —  —  —  —  1  
Restructuring charge—  15  —  (1) —  —  14  
Non-rental depreciation and amortization10  182  —  17  —  —  209  
Operating (loss) income(31) 914  —  43  (29) —  897  
Interest (income) expense, net(33) 348  —  —  16  —  331  
Other (income) expense, net(359) 410  —  29  (85) —  (5) 
Income before provision (benefit) for income taxes361  156  —  14  40  —  571  
Provision for (benefit) income taxes76  42  —  (2) 10  —  126  
Income before equity in net earnings (loss) of subsidiaries285  114  —  16  30  —  445  
Equity in net earnings (loss) of subsidiaries160  46  12  —  —  (218) —  
Net income (loss)445  160  12  16  30  (218) 445  
Other comprehensive income (loss)43  43  42  41  —  (126) 43  
Comprehensive income (loss)$488  $203  $54  $57  $30  $(344) $488  

34
UNITED RENTALS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share data, unless otherwise indicated)


CONDENSED CONSOLIDATING CASH FLOW INFORMATION
For the NineSix Months Ended SeptemberJune 30, 20172020
 
ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations TotalForeignSPV
Foreign SPV 
Net cash provided by (used in) operating activities$15
 $1,849
 $(2) $83
 $(179) $—
 $1,766
Net cash used in investing activities(15) (2,145) —
 (92) —
 —
 (2,252)
Net cash provided by (used in) financing activities—
 298
 2
 (2) 179
 —
 477
Net cash provided by operating activitiesNet cash provided by operating activities$40  $1,047  $—  $86  $288  $—  $1,461  
Net cash (used in) provided by investing activitiesNet cash (used in) provided by investing activities(40) 2  —  (3) —  —  (41) 
Net cash used in financing activitiesNet cash used in financing activities—  (1,041) —  (16) (288) —  (1,345) 
Effect of foreign exchange rates—
 —
 —
 21
 —
 —
 21
Effect of foreign exchange rates—  —  —  —  —  —  —  
Net increase in cash and cash equivalents—
 2
 —
 10
 —
 —
 12
Net increase in cash and cash equivalents—  8  —  67  —  —  75  
Cash and cash equivalents at beginning of period—
 21
 —
 291
 —
 —
 312
Cash and cash equivalents at beginning of period—  28  —  24  —  —  52  
Cash and cash equivalents at end of period$—
 $23
 $—
 $301
 $—
 $—
 $324
Cash and cash equivalents at end of period$—  $36  $—  $91  $—  $—  $127  
CONDENSED CONSOLIDATING CASH FLOW INFORMATION
For the NineSix Months Ended SeptemberJune 30, 20162019
 
 ParentURNAGuarantor
Subsidiaries		Non-Guarantor
Subsidiaries		EliminationsTotal
 ForeignSPV
Net cash provided by operating activities$9  $1,457  $—  $83  $41  $—  $1,590  
Net cash used in investing activities(9) (943) —  (54) —  —  (1,006) 
Net cash used in financing activities—  (464) —  (47) (41) —  (552) 
Effect of foreign exchange rates—  —  —  —  —  —  —  
Net increase (decrease) in cash and cash equivalents—  50  —  (18) —  —  32  
Cash and cash equivalents at beginning of period—  1  —  42  —  —  43  
Cash and cash equivalents at end of period$—  $51  $—  $24  $—  $—  $75  
35
 Parent URNA 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 Eliminations Total
    Foreign SPV  
Net cash provided by (used in) operating activities$4
 $1,513
 $(2) $108
 $7
 $—
 $1,630
Net cash (used in) provided by investing activities(4) (862) —
 1
 —
 —
 (865)
Net cash (used in) provided by financing activities—
 (649) 2
 (2) (7) —
 (656)
Effect of foreign exchange rates—
 —
 —
 9
 —
 —
 9
Net increase in cash and cash equivalents—
 2
 —
 116
 —
 —
 118
Cash and cash equivalents at beginning of period—
 18
 —
 161
 —
 —
 179
Cash and cash equivalents at end of period$—
 $20
 $—
 $277
 $—
 $—
 $297
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data, unless otherwise indicated)

COVID-19
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data, unless otherwise indicated)
As discussed in note 1 to our condensed consolidated financial statements, the novel coronavirus (“COVID-19”) is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk, which has significantly disrupted supply chains and businesses around the world. While visibility into future economic conditions remains limited, based on increased insight into near-term indicators, we reintroduced full-year 2020 guidance in July 2020, after having withdrawn it in April 2020.
Prior to mid-March 2020, our performance was largely in line with expectations. In early-March, we initiated contingency planning ahead of the impact of COVID-19 on our end-markets. This planning has focused on five key work-streams that are the basis for our crisis response plan:
1.Ensuring the safety and well-being of our employees and customers: Above all else, we are committed to ensuring the health, safety and well-being of our employees and customers. We have implemented a variety of COVID-19 safety measures, including ensuring that branches have sufficient and adequate personal protection equipment. We have also implemented appropriate social distancing practices, and increased disinfecting of equipment and facilities.
2.Leveraging our competitive advantages to support the needs of customers: All our branches in the U.S. and Canada remain open to provide essential services, and most of our European branches are also operating. We have made modifications to enhance safety measures in our operating processes and protocols that support the needs of our customers. Additionally, our digital capabilities allow customers to perform fully contactless transactions.
3.Disciplined capital expenditures: We have a substantial degree of flexibility in managing our capital expenditures and fleet capacity. While the current environment remains fluid, we expect that our 2020 capital expenditures will be down significantly year-over-year.
4.Controlling core operating expenses: A significant portion of our cash operating costs are variable in nature. Since March, we have significantly reduced overtime and temporary labor primarily in response to the impact of COVID-19. Furthermore, we continue to leverage our current capacity to reduce the need for third-party delivery and repair services, and minimize other discretionary expenses across general and administrative areas.
5.Proactively managing the balance sheet with a focus on liquidity: We are focused on ensuring that we maintain ample liquidity to meet our business needs as the impact of COVID-19 evolves. As a result, our current $500 share repurchase program was paused in mid-March. At June 30, 2020, our total liquidity was $3.823 billion, including $127 in cash and cash equivalents. As discussed below, in July 2020, we issued a redemption notice for the $800 outstanding principal amount of our 5 1/2 percent Senior Notes due 2025, and the redemption is expected to occur in August 2020. Additionally, we have no long-term debt note maturities until 2025.
The impact of COVID-19 on our business is discussed throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As discussed below, the response plan above helped mitigate the impact of COVID-19 on our results.
Executive Overview
We are the largest equipment rental company in the world, with an integrated network of 9501,180 rental locations in the United States, Canada and Canada.Europe. In July 2018, we completed the acquisition of BakerCorp International Holdings, Inc. (“BakerCorp”), which allowed for our entry into select European markets. Although the equipment rental industry is highly fragmented and diverse, we believe that we are well positioned to take advantage of this environment because, as a larger company, we have more extensive resources and certain competitive advantages. These include a fleet of rental equipment with a total original equipment cost (“OEC”) of $10.8$14.1 billion, and a nationalNorth American branch network that operates in 49 U.S. states and every Canadian province, and serves 99 of the 100 largest 100 metropolitan areas in the U.S. The BakerCorp acquisition discussed above added 11 European locations in France, Germany, the United States. In addition,Kingdom and the Netherlands to our branch network. Our size also gives us greater purchasing power, the ability to provide customers with a broader range of equipment and services, the ability to provide customers with equipment that is more consistently well-maintained and therefore more productive and reliable, and the ability to enhance the earning potential of our assets by transferring equipment among branches to satisfy customer needs.
We offer approximately 3,3004,000 classes of equipment for rent to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. Our revenues are derived
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from the following sources: equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales and service and other revenues. Equipment rentals represented 8684 percent of total revenues for the ninesix months ended SeptemberJune 30, 2017.2020.
For the past several years, we have executed a strategy focused on improving the profitability of our core equipment rental business through revenue growth, margin expansion and operational efficiencies. In particular, we have focused on customer segmentation, customer service differentiation, rate management, fleet management and operational efficiency.
In 2017, we have continued our disciplined focusWe are currently managing the impact of COVID-19, as discussed above. Our general strategy focuses on increasing our profitability and return on invested capital. Incapital, and, in particular, our strategy calls for:
•A consistently superior standard of service to customers, often provided through a single pointlead contact who can coordinate the cross-selling of contact;
the various services we offer throughout our network. We utilize a proprietary software application, Total Control®, which provides our key customers with a single in-house software application that enables them to monitor and manage all their equipment needs. Total Control® is a unique customer offering that enables us to develop strong, long-term relationships with our larger customers. Our digital capabilities, including our Total Control® platform, allow our sales teams to provide contactless end-to-end customer service;
•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;
The implementation of•A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement. We have trained over 3,100 employees, over 70 percent of our district managers and approximately 55 percent of our branch managers on the Lean kaizen process. We continue to implement this programLean 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. We achieved the anticipated run rate savings from the Lean initiatives in 2016 and expect to continue to generate savings from these initiatives;
operations;
The implementation of•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 pumpfluid solutions footprint, as well as our tools offering,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 believe that the expansion of our trench, power and pumpfluid solutions business, as well as our tools offering,and onsite services offerings, will 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 Rentals Holdings II, Inc. (“NES”), Neff Corporation ("Neff") and Neff.Vander Holding Corporation and its subsidiaries (“BlueLine”). Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.
For the nine months ended September 30, 2017, equipment rental revenue increased 11.7 percent as compared to the same period in 2016, primarily reflecting a 14.5 percent increase in the volume of OEC on rent, which includes the impact of the NES acquisition discussed in note 2 to the condensed consolidated financial statements, partially offset by a 0.7 percent rental rate decrease. Rental rate changes are calculated based on the year-over-year variance in average contract rates, weighted by the prior period revenue mix. The decreased rental rates reflected the impact of the NES acquisition, pressure from Canada and the impact of industry fleet expansion. On a pro forma basis including NES' standalone, pre-acquisition results, equipment rental revenue increased 6.5 percent year-over-year, primarily reflecting a 6.9 percent increase in the volume of OEC on rent

partially offset by a 0.2 percent rental rate decrease. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets. In particular, we saw improvement in our trench, power and pump segment. The volume of OEC on rent increased 30.6 percent in our trench, power and pump segment, primarily due to continued strength in our Trench Safety and Power and HVAC regions, and improved performance in our Pump Solutions region. The improvement in the Pump Solutions region primarily reflected growth in revenue from i) upstream oil and gas customers, which have experienced significant volatility in recent years, and ii) construction and mining customers.
Financial Overview
Since January 1, 2016,In February 2020, we have takenissued $750 principal amount of 4 percent Senior Notes due 2030. We used the following actionsnet proceeds from the offering of the notes to improvereduce borrowings under the ABL facility. At the time of the offering, we indicated our financial flexibility andexpectation that we would re-borrow an amount equal to those net proceeds, along with additional borrowings under the ABL facility, to redeem the $800 principal amount of our 5 1/2 percent Senior Notes due 2025 on or after July 15, 2020. Prior to issuing any redemption notice for the 5 1/2 percent Senior Notes due 2025, we considered the impact of COVID-19 on liquidity, and assessed our available sources and anticipated uses of cash, including, with respect to position ussources, cash generated from operations and from the sale of rental equipment. In July 2020, we issued a redemption notice for the 5 1/2 percent Senior Notes due 2025, and the redemption is expected to investoccur in August 2020. We also used cash generated from operations to reduce borrowings under the necessary capital in our business:
•
Redeemed all of our 8 1/4 percent Senior Notes, 7 3/8 percent Senior Notes and 6 1/8 percent Senior Notes;
•
Redeemed $1.1 billion principal amount of our 7 5/8 percent Senior Notes due 2022 (we expect to redeem the remaining $225 principal amount in the fourth quarter of 2017);
•
Issued $750 principal amount of 4 5/8 percent Senior Notes due 2025;
•
Issued $1.0 billion principal amount of 5 7/8 percent Senior Notes due 2026;
•
Issued $1.0 billion principal amount of 5 1/2 percent Senior Notes due 2027;
•
Issued $1.675 billion principal amount of 4 7/8 percent Senior Notes due 2028, comprised of separate issuances of $925 in August 2017 and $750 in September 2017, as discussed in note 8 to the condensed consolidated financial statements;
Amended and extended our ABL facility, including an increaseand total debt has decreased $1.023 billion, or 9.0 percent, since December 31, 2019.
Additionally, in April 2020, we amended the facility size to $3.0 billion; and
Amended and extended our accounts receivable securitization facility including an increaseto adjust, on a temporary basis, the financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The adjustments to these tests were intended to make compliance with such tests more likely for the calendar months ending April 30, 2020 and May 31, 2020, and we were in compliance with such tests for these months. In June 2020, the accounts receivable securitization facility was further amended to (a) extend the maturity date, which may be further extended on a 364-day basis by mutual agreement with the purchasers under the facility, to June 25, 2021, (b) reduce the size of the facility from $975 to $675.$800 and (c) adjust, for the calendar months ending on or after June 30, 2020, the financial tests (including the method of calculation) relating to (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding.
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As of SeptemberJune 30, 2017,2020, we had available liquidity of $2.88$3.823 billion, including cash and cash equivalents of $324.$127. As discussed above, in note 8July 2020, we issued a redemption notice for the $800 outstanding principal amount of our 5 1/2 percent Senior Notes due 2025, and the redemption is expected to the condensed consolidated financial statements, we used available cash and drawings on the ABL facility to finance the Neff acquisition upon its closing on October 2, 2017.occur in August 2020.
Net income. Net income and diluted earnings per share for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016 were as follows:2019 are presented below.
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Net income$212  $270  $385  $445  
Diluted earnings per share$2.93  $3.44  $5.25  $5.62  
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income$199
 $187
 $449
 $413
Diluted earnings per share$2.33
 $2.16
 $5.26
 $4.66

Net income and diluted earnings per share for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019 include the after-tax impacts of the items below. The tax rates applied to the items below reflect the statutory rates in the applicable entity.entities.

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Tax rate applied to items below25.2 %25.3 %25.2 %25.4 %
 Contribution
to net income (after-tax)		Impact on
diluted earnings per share		Contribution
to net income (after-tax)		Impact on
diluted earnings per share		Contribution
to net income (after-tax)		Impact on
diluted earnings per share		Contribution
to net income (after-tax)		Impact on
diluted earnings per share
Merger related costs (1)$—  $—  $(1) $—  $—  $—  $(1) $(0.01) 
Merger related intangible asset amortization (2)(41) (0.59) (49) (0.64) (85) (1.15) (101) (1.28) 
Impact on depreciation related to acquired fleet and property and equipment (3)(2) (0.02) (10) (0.12) (4) (0.06) (21) (0.26) 
Impact of the fair value mark-up of acquired fleet (4)(8) (0.10) (12) (0.15) (17) (0.23) (32) (0.41) 
Restructuring charge (5)(3) (0.04) (4) (0.06) (4) (0.06) (10) (0.13) 
Asset impairment charge (6)(1) —  (3) (0.03) (20) (0.27) (3) (0.03) 
Loss on repurchase/redemption of debt securities and amendment of ABL facility—  —  (24) (0.30) —  —  (24) (0.30) 

(1)This reflects transaction costs associated with the BakerCorp and BlueLine acquisitions that were completed in 2018. 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)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements.
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 Three Months Ended September 30,
Nine Months Ended September 30,
 2017
2016
2017
2016
Tax rate applied to items below38.5%   38.6%   38.5%   38.4%  
 Contribution
to net income (after-tax)
Impact on
diluted earnings per share

Contribution
to net income (after-tax)

Impact on
diluted earnings per share
Contribution
to net income (after-tax)

Impact on
diluted earnings per share

Contribution
to net income (after-tax)

Impact on
diluted earnings per share
Merger related costs (1)$(10)
$(0.12)
$—

$—

$(20)
$(0.23)
$—

$—
Merger related intangible asset amortization (2)(24)
(0.27)
(24)
(0.28)
(72)
(0.83)
(75)
(0.85)
Impact on depreciation related to acquired RSC and NES fleet and property and equipment (3)(6)
(0.07)
—

—

(4)
(0.05)
—

—
Impact of the fair value mark-up of acquired RSC and NES fleet (4)(15)
(0.17)
(5)
(0.05)
(31)
(0.36)
(16)
(0.18)
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (5)—

—

—

—

—

—

1

0.01
Restructuring charge (6)(6)
(0.07)
(2)
(0.02)
(18)
(0.21)
(5)
(0.05)
Asset impairment charge (7)—

—

—

—

—

—

(2)
(0.02)
Loss on repurchase/redemption of debt securities and amendment of ABL facility(18)
(0.22)
(6)
(0.07)
(26)
(0.31)
(22)
(0.25)
(6)This reflects write-offs of leasehold improvements and other fixed assets. The six months ended June 30, 2020 includes a $26 pre-tax asset impairment charge, which was not related to COVID-19, primarily associated with the discontinuation of certain equipment programs.

(1)This reflects transaction costs associated with the NES and Neff acquisitions discussed in note 2 to our condensed 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 and NES acquisitions.
(3)This reflects the impact of extending the useful lives of equipment acquired in the RSC and NES 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 and NES acquisitions and subsequently sold.
(5)This reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition.
(6)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements.
(7)This reflects write-offs of fixed assets in connection with our restructuring programs.
EBITDA GAAP Reconciliations. EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the merger related costs, restructuring charge, stock compensation expense, net and the impact of the fair value mark-up of the acquired RSC and NES fleet. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies. The EBITDAnet income and adjusted EBITDA margins represent EBITDAnet income or adjusted EBITDA divided by total revenue. Management believes that EBITDA and adjusted EBITDA, when viewed with the Company’s results under GAAP

and the accompanying reconciliations, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that EBITDA and adjusted EBITDA help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. However, EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity.
The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Net income$212  $270  $385  $445  
Provision for income taxes39  81  92  126  
Interest expense, net130  180  266  331  
Depreciation of rental equipment395  399  821  794  
Non-rental depreciation and amortization95  105  195  209  
EBITDA$871  $1,035  $1,759  $1,905  
Merger related costs (1)—  —  —  1  
Restructuring charge (2)3  6  5  14  
Stock compensation expense, net (3)15  16  28  31  
Impact of the fair value mark-up of acquired fleet (4)10  16  22  43  
Adjusted EBITDA$899  $1,073  $1,814  $1,994  
Net income margin10.9 %11.8 %9.5 %10.1 %
Adjusted EBITDA margin46.4 %46.9 %44.6 %45.2 %
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income$199
 $187
 $449
 $413
Provision for income taxes123
 116
 263
 254
Interest expense, net131
 110
 338
 349
Depreciation of rental equipment290
 250
 804
 735
Non-rental depreciation and amortization63
 61
 189
 192
EBITDA$806
 $724
 $2,043
 $1,943
Merger related costs (1)16
 —
 32
 —
Restructuring charge (2)9
 4
 28
 8
Stock compensation expense, net (3)24
 11
 64
 33
Impact of the fair value mark-up of acquired RSC and NES fleet (4)24
 8
 50
 26
Adjusted EBITDA$879
 $747
 $2,217
 $2,010


The table below provides a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA:
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Nine Months EndedSix Months Ended
September 30, June 30,
2017 2016 20202019
Net cash provided by operating activities$1,766
 $1,630
Net cash provided by operating activities$1,461  $1,590  
Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA:   Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA:
Amortization of deferred financing costs and original issue discounts(6) (7)Amortization of deferred financing costs and original issue discounts(7) (8) 
Gain on sales of rental equipment153
 146
Gain on sales of rental equipment154  148  
Gain on sales of non-rental equipment4
 3
Gain on sales of non-rental equipment3  3  
Gain on insurance proceeds from damaged equipmentGain on insurance proceeds from damaged equipment13  12  
Merger related costs (1)(32) —
Merger related costs (1)—  (1) 
Restructuring charge (2)(28) (8)Restructuring charge (2)(5) (14) 
Stock compensation expense, net (3)(64) (33)Stock compensation expense, net (3)(28) (31) 
Loss on repurchase/redemption of debt securities and amendment of ABL facility(43) (36)Loss on repurchase/redemption of debt securities and amendment of ABL facility—  (32) 
Excess tax benefits from share-based payment arrangements—
 53
Changes in assets and liabilities(126) (113)Changes in assets and liabilities(112) (136) 
Cash paid for interest305
 294
Cash paid for interest259  301  
Cash paid for income taxes, net114
 14
Cash paid for income taxes, net21  73  
EBITDA$2,043
 $1,943
EBITDA$1,759  $1,905  
Add back:   Add back:
Merger related costs (1)32
 —
Merger related costs (1)—  1  
Restructuring charge (2)28
 8
Restructuring charge (2)5  14  
Stock compensation expense, net (3)64
 33
Stock compensation expense, net (3)28  31  
Impact of the fair value mark-up of acquired RSC and NES fleet (4)50
 26
Impact of the fair value mark-up of acquired fleet (4)Impact of the fair value mark-up of acquired fleet (4)22  43  
Adjusted EBITDA$2,217
 $2,010
Adjusted EBITDA$1,814  $1,994  
 ___________________
(1)This reflects transaction costs associated with the NES and Neff acquisitions discussed in note 2 to our condensed 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 primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements.
(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 and NES acquisitions and subsequently sold.
(1)This reflects transaction costs associated with the BakerCorp and BlueLine acquisitions that were completed in 2018. 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 primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements.
(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.
For the three months ended SeptemberJune 30, 2017, EBITDA increased $82,2020, net income decreased $58, or 11.321.5 percent, and adjusted EBITDA increased $132, or 17.7net income margin decreased 90 basis points to 10.9 percent. For the three months ended SeptemberJune 30, 2017,2020, adjusted EBITDA margin decreased 240 basis points to 45.6$174, or 16.2 percent, and adjusted EBITDA margin increased 30decreased 50 basis points to 49.846.4 percent.
See "Results of Operations-Gross Margin" below for further discussion of gross margin, which decreased 360 basis points year-over-year. As discussed below, the margins from our different lines of business were negatively impacted, to varying degrees, by COVID-19. In particular, gross margin from equipment rentals decreased 390 basis points year-over-year, with 370 basis points of the margin decline due to depreciation expense, which was largely flat with 2019, but increased as a percentage of revenue, primarily due to COVID-19. The impact of the gross margin decrease in the EBITDAon net income margin primarily reflects i) increasedwas partially offset by lower year-over-year 1) income tax expense, 2) net interest expense and 3) selling, general and administrative ("SG&A") compensation costs, including stock compensation costs, largelyexpense as a percentage of revenue. The effective tax rate decreased 760 basis points year-over-year primarily due to the release of a valuation allowance on foreign tax credits that we now anticipate using. Interest expense, net decreased due to a debt redemption loss of $32 in the three months ended June 30, 2019, and decreases in average debt and the average cost of debt. SG&A expense as a percentage of revenue decreased primarily due to significant reductions in professional fees and travel and entertainment expenses, which were implemented in response to COVID-19, partially offset by an increase in salaries, net of reduced bonuses, as a percentage of revenue, which also reflects the impact of the NES acquisition discussed in note 2 to the condensed consolidated financial statements, increased revenue, improved profitability, and increases in our stock price and in the volume of stock awards, and ii) increased merger related costs primarily associated with the Neff acquisition discussed in note 2 to the condensed consolidated financial statements. COVID-19.

The increasedecrease in the adjusted EBITDA margin primarily reflects i) increased1) lower margins excluding depreciation, from equipment rentals and ii) increased margins, excluding(excluding depreciation), sales of rental equipment (excluding the adjustment reflected in the table above for the impact of the fair value mark-up of acquired RSCfleet) and NES fleet,service and other revenues and 2) a reduction in the proportion of revenues from higher margin
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(excluding depreciation) equipment rentals, partially offset by 3) the impact of decreased SG&A expenses. Equipment rentals gross margin (excluding depreciation) decreased primarily due to the negative impact of COVID-19 on equipment rental revenue, which led to certain operating costs that increased as a percentage of revenue. While such costs negatively impacted margins, a significant portion of our cash operating costs are variable in nature. Management of such costs in response to COVID-19 mitigated the negative impact of COVID-19. Gross margin from sales of rental equipment partially offset by iii) increased SG&A compensation costs largely due to(excluding the adjustment reflected in the table above for the impact of the NES acquisition discussedfair value mark-up of acquired fleet) decreased primarily due to changes in note 2pricing and the mix of equipment sold. The decreased gross margin from service and other revenues reflected the impact of COVID-19, which resulted in reduced training revenue without a proportionate reduction in costs. SG&A expense as a percentage of revenue decreased primarily due to significant reductions in professional fees and travel and entertainment expenses, which were implemented in response to COVID-19, partially offset by an increase in salaries, net of reduced bonuses, as a percentage of revenue, which also reflects the condensed consolidated financial statements, increased revenue and improved profitability.impact of COVID-19.
For the ninesix months ended SeptemberJune 30, 2017, EBITDA increased $100,2020, net income decreased $60, or 5.113.5 percent, and adjusted EBITDA increased $207, or 10.3net income margin decreased 60 basis points to 9.5 percent. For the ninesix months ended SeptemberJune 30, 2017,2020, adjusted EBITDA margin decreased 250 basis points to 43.3$180, or 9.0 percent, and adjusted EBITDA margin decreased 4060 basis points to 47.044.6 percent. The decrease in
See "Results of Operations-Gross Margin" below for further discussion of gross margin, which decreased 280 basis points year-over-year. As discussed below, the EBITDAmargins from our different lines of business were negatively impacted, to varying degrees, by COVID-19. In particular, gross margin primarily reflects i) increased selling, general and administrative ("SG&A") compensation costs, including stock compensation costs, largelyfrom equipment rentals decreased 330 basis points year-over-year, with 280 basis points of the margin decline due to an increase in depreciation expense as a percentage of revenue. The increase in depreciation expense included a $24 asset impairment charge, which was not related to COVID-19, associated with the discontinuation of certain equipment programs. Excluding the impact of the NES acquisition,asset impairment charge, depreciation expense was largely flat with 2019, but increased as a percentage of revenue, improved profitability,primarily due to COVID-19. The impact of the gross margin decrease on net income margin was partially offset by lower year-over-year 1) income tax expense, 2) net interest expense and increases in our3) SG&A expense as a percentage of revenue. The effective tax rate decreased 280 basis points year-over-year primarily due to the release of a valuation allowance on foreign tax credits that we now anticipate using, partially offset by reduced tax benefits from stock price andcompensation. Interest expense, net decreased due to a debt redemption loss of $32 in the volumesix months ended June 30, 2019, and decreases in average debt and the average cost of stock awards,debt. SG&A expense as a percentage of revenue decreased primarily due to significant reductions in professional fees and ii) increased merger related coststravel and restructuring charges associated withentertainment expenses, which were implemented in response to COVID-19, partially offset by an increase in salaries, net of reduced bonuses, as a percentage of revenue, which also reflects the NES and Neff acquisitions. impact of COVID-19.
The decrease in the adjusted EBITDA margin primarily reflects increased1) lower margins from equipment rentals (excluding depreciation), sales of rental equipment (excluding the adjustment reflected in the table above for the impact of the fair value mark-up of acquired fleet) and service and other revenues and 2) a reduction in the proportion of revenues from higher margin (excluding depreciation) equipment rentals, partially offset by 3) the impact of decreased SG&A compensationexpenses. Equipment rentals gross margin (excluding depreciation) decreased primarily due to the negative impact of COVID-19 on equipment rental revenue, which led to certain operating costs largelythat increased as a percentage of revenue. While such costs negatively impacted margins, a significant portion of our cash operating costs are variable in nature. Management of such costs in response to COVID-19 mitigated the negative impact of COVID-19. Gross margin from sales of rental equipment (excluding the adjustment reflected in the table above for the impact of the fair value mark-up of acquired fleet) decreased primarily due to changes in pricing and the mix of equipment sold. The decreased gross margin from service and other revenues reflected the impact of COVID-19, which resulted in reduced training revenue without a proportionate reduction in costs. SG&A expense as a percentage of revenue decreased primarily due to significant reductions in professional fees and travel and entertainment expenses, which were implemented in response to COVID-19, partially offset by an increase in salaries, net of reduced bonuses, as a percentage of revenue, which also reflects the impact of COVID-19.
Revenues were as below. Fleet productivity is a comprehensive metric that provides greater insight into the decisions made by our managers in support of equipment rental growth and returns. Specifically, we seek to optimize the interplay of rental rates, time utilization and mix to drive rental revenue. Fleet productivity aggregates, in one metric, the impact of changes in rates, utilization and mix on owned equipment rental revenue. We believe that this metric is useful in assessing the effectiveness of our decisions on rates, time utilization and mix, particularly as they support the creation of shareholder value. The table below includes the components of the year-over-year change in rental revenue using the fleet productivity methodology.
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 Three Months Ended June 30,Six Months Ended June 30,
 20202019Change20202019Change
Equipment rentals*$1,642  $1,960  (16.2)%$3,425  $3,755  (8.8)%
Sales of rental equipment176  197  (10.7)%384  389  (1.3)%
Sales of new equipment53  60  (11.7)%115  122  (5.7)%
Contractor supplies sales23  27  (14.8)%48  51  (5.9)%
Service and other revenues45  46  (2.2)%92  90  2.2 %
Total revenues$1,939  $2,290  (15.3)%$4,064  $4,407  (7.8)%
*Equipment rentals variance components:
Year-over-year change in average OEC(0.7)%0.7 %
Assumed year-over-year inflation impact (1)(1.5)%(1.5)%
Fleet productivity (2)(13.6)%(7.7)%
Contribution from ancillary and re-rent revenue (3)(0.4)%(0.3)%
Total change in equipment rentals(16.2)%(8.8)%
 ___________________
(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 2 to the condensed 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 2 for further detail), excluding owned equipment rental revenue.
Equipment rentals include our revenues from renting equipment, as well as revenue related to the fees we charge customers: for equipment delivery and pick-up; to protect the customer against liability for damage to our equipment while on rent; for fuel; and for environmental costs. Sales of rental equipment represent our revenues from the sale of used rental equipment. Sales of new equipment represent our revenues from the sale of new equipment. Contractor supplies sales represent our sales of supplies utilized by contractors, which include construction consumables, tools, small equipment and safety supplies. Services and other revenues primarily represent our revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). See note 2 to the condensed consolidated financial statements for a discussion of our revenue recognition accounting.
For the three months ended June 30, 2020, total revenues of $1.939 billion decreased 15.3 percent compared with 2019. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 94 percent of total revenue for the three months ended June 30, 2020). Equipment rentals decreased 16.2 percent. COVID-19 began to impact our operations in March, and, since then, equipment rentals have decreased year-over-year, primarily due to the impact of COVID-19. Fleet productivity decreased 13.6 percent, primarily due to the NES acquisition, increasedimpact of COVID-19, which resulted in decreased rental volume in response to shelter-in-place orders and other market restrictions. Rental volume trends improved throughout the quarter, with rental volume at the end of June almost 14 percent above the April trough. Sales of rental equipment decreased 10.7 percent primarily due to reduced wholesale sales, which were impacted by COVID-19.
For the six months ended June 30, 2020, total revenues of $4.064 billion decreased 7.8 percent compared with 2019. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 94 percent of total revenue for the six months ended June 30, 2020). Equipment rentals decreased 8.8 percent. COVID-19 began to impact our operations in March. Through February, equipment rentals were up slightly year-over-year. Since March, equipment rentals have decreased year-over-year, primarily due to the impact of COVID-19. Fleet productivity decreased 7.7 percent, primarily due to the impact of COVID-19 since March, when rental volume declined in response to shelter-in-place orders and other market restrictions. Rental volume trends improved profitability.throughout the second quarter, with rental volume at the end of June almost 14 percent above the April trough. Through February, fleet productivity was flat year-over-year and in line with expectations. Sales of rental equipment did not change materially year-over-year.


Results of Operations
42
As discussed in note 3 to our condensed consolidated financial statements, our reportable segments are general rentals and trench, power and pump.fluid solutions. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The general rentals segment’s customers include construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. The general rentalsThis segment operates throughout the United States and Canada. The trench, power and pumpfluid solutions segment is comprised of i) the Trench Safety region, which rents 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) the Power and HVAC region, which rents power and HVAC equipment such as portable diesel generators, electrical distribution equipment, and temperature control equipment including heating and cooling equipment, and iii) the PumpFluid Solutions region,and iv) Fluid Solutions Europe regions, both of which rents pumpsrent equipment primarily used by municipalities, industrial plants,for fluid containment, transfer and mining, construction, and agribusiness customers.treatment. The trench, power and pumpfluid solutions segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. The trench, power and pumpThis segment operates throughout the United States and in Canada.Canada and Europe.
As discussed in note 3 to our condensed consolidated financial statements, we aggregate our ten11 geographic regions—Carolinas, Gulf South, Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Mid-Central,Mid Central, Midwest, Northeast, Pacific West, South, Southeast and Western Canada—into our general rentals reporting segment. We periodically review the size and geographic scope of our regions, and have occasionally reorganized the regions to create a more balanced and effective structure. Historically, there have been variances in the levels of equipment rentals gross margins achieved by these regions. For the five year period ended SeptemberJune 30, 2017, one2020, three of our general rentals' regions had an equipment rentals gross margin that varied by between 10 percent and 1223 percent from the equipment rentals gross margins of the aggregated general rentals' regions over the same period. For the five year period ended June 30, 2020, the general rentals' region with the lowest equipment rentals gross margin was Western Canada. The Western Canada region's equipment rentals gross margin of 32.4 percent for the five year period ended June 30, 2020 was 23 percent less than the equipment rentals gross margins of the aggregated general rentals' regions over the same period. The Western Canada region's equipment rentals gross margin was less than the other general rentals' regions during this period primarily due to declines in the oil and gas business in the region. The rental industry is cyclical, and there historically have been regions with equipment rentals gross margins that varied by greater than 10 percent from the equipment rentals gross margins of the aggregated general rentals' regions, though the specific regions with margin variances of over 10 percent have fluctuated.

We expect margin convergence going forward given the cyclical nature of the rental industry, and monitor the margin variances and confirm the expectation of future convergence on a quarterly basis. When monitoring for margin convergence, we include projected future results.
We similarly monitor the margin variances for the regions in the trench, power and pumpfluid solutions segment. The Pump Solutions region is primarily comprised oftrench, power and fluid solutions segment includes the locations acquired in the April 2014 National Pump acquisition.July 2018 BakerCorp acquisition discussed above. As such, there isn’tis not a long history of the Pump Solutions region'sacquired locations' rental margins included in the trench, power and pumpfluid solutions segment. When monitoring for margin convergence, we include projected future results. We monitor the trench, power and pumpfluid solutions segment margin variances and confirm the expectation of future convergence on a quarterly basis. The historic, pre-acquisition margins for the acquired BakerCorp locations are lower than the margins achieved at the other locations in the segment. We expect that the margins at the acquired locations will increase as we realize synergies following the acquisition, as a result of which, we expect future margin convergence.
We believe that the regions that are aggregated into our 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. Although we believe aggregating these regions into our reporting segments for segment reporting purposes is appropriate, to the extent that there are significant margin variances that do not converge, we may be required to disaggregate the regions into separate reporting segments. Any such disaggregation would have no impact on our consolidated results of operations.
These segments align our external segment reporting with how management evaluates business performance and allocates resources. We evaluate segment performance primarily based on segment equipment rentals gross profit. Our revenues, operating results, and financial condition fluctuate from quarter to quarter reflecting the seasonal rental patterns of our customers, with rental activity tending to be lower in the winter.
Revenues by segment were as follows:

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General
rentals		Trench, power and fluid solutionsTotal
General
rentals
 Trench, power and pump Total
Three Months Ended September 30, 2017     
Three Months Ended June 30, 2020Three Months Ended June 30, 2020
Equipment rentals$1,237
 $299
 $1,536
Equipment rentals$1,255  $387  $1,642  
Sales of rental equipment130
 9
 139
Sales of rental equipment158  18  176  
Sales of new equipment34
 6
 40
Sales of new equipment45  8  53  
Contractor supplies sales17
 4
 21
Contractor supplies sales15  8  23  
Service and other revenues26
 4
 30
Service and other revenues39  6  45  
Total revenue$1,444
 $322
 $1,766
Total revenue$1,512  $427  $1,939  
Three Months Ended September 30, 2016     
Three Months Ended June 30, 2019Three Months Ended June 30, 2019
Equipment rentals$1,097
 $225
 $1,322
Equipment rentals$1,527  $433  $1,960  
Sales of rental equipment103
 9
 112
Sales of rental equipment180  17  197  
Sales of new equipment27
 3
 30
Sales of new equipment52  8  60  
Contractor supplies sales16
 3
 19
Contractor supplies sales19  8  27  
Service and other revenues23
 2
 25
Service and other revenues40  6  46  
Total revenue$1,266
 $242
 $1,508
Total revenue$1,818  $472  $2,290  
Nine Months Ended September 30, 2017     
Six Months Ended June 30, 2020Six Months Ended June 30, 2020
Equipment rentals$3,357
 $712
 $4,069
Equipment rentals$2,649  $776  $3,425  
Sales of rental equipment348
 30
 378
Sales of rental equipment348  36  384  
Sales of new equipment112
 14
 126
Sales of new equipment98  17  115  
Contractor supplies sales49
 11
 60
Contractor supplies sales31  17  48  
Service and other revenues76
 10
 86
Service and other revenues80  12  92  
Total revenue$3,942
 $777
 $4,719
Total revenue$3,206  $858  $4,064  
Nine Months Ended September 30, 2016     
Six Months Ended June 30, 2019Six Months Ended June 30, 2019
Equipment rentals$3,067
 $576
 $3,643
Equipment rentals$2,950  $805  $3,755  
Sales of rental equipment334
 27
 361
Sales of rental equipment358  31  389  
Sales of new equipment84
 12
 96
Sales of new equipment107  15  122  
Contractor supplies sales49
 11
 60
Contractor supplies sales36  15  51  
Service and other revenues71
 8
 79
Service and other revenues77  13  90  
Total revenue$3,605
 $634
 $4,239
Total revenue$3,528  $879  $4,407  


Equipment rentals. For the three months ended SeptemberJune 30, 2017,2020, equipment rentals of $1.536$1.642 billion increased $214,decreased $318, or 16.2 percent, as compared to the same period in 2016,2019. COVID-19 began to impact our operations in March, and, since then, equipment rentals have decreased year-over-year, primarily reflecting increases of 18.2 percent in the volume of OEC on rent, which includesdue to the impact of COVID-19. As explained further above (see "Financial Overview-Revenues"), fleet productivity is a comprehensive measure of the NES acquisition discussedcombined impact of key decisions made daily by our managers regarding rental rates, time utilization and mix on the year-over-year change in note 2owned equipment rental revenue. Fleet productivity decreased 13.6 percent, primarily due to the condensed consolidated financial statements,impact of COVID-19, which resulted in decreased rental volume in response to shelter-in-place orders and 0.1other market restrictions. Rental volume trends improved throughout the quarter, with rental volume at the end of June almost 14 percent in rental rates. On a pro forma basis including NES' standalone, pre-acquisition results, equipment rental revenue increased 8.9 percent year-over-year, primarily reflecting increases of 7.6 percent inabove the volume of OEC and 0.9 percent in rental rates. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets.April trough. Equipment rentals represented 8785 percent of total revenues for the three months ended SeptemberJune 30, 2017.2020.


For the ninesix months ended SeptemberJune 30, 2017,2020, equipment rentals of $4.069$3.425 billion increased $426,decreased $330, or 11.78.8 percent, as compared to the same period in 2016,2019. COVID-19 began to impact our operations in March. Through February, equipment rentals were up slightly year-over-year. Since March, equipment rentals have decreased year-over-year, primarily reflecting a 14.5 percent increase in the volume of OEC on rent, which includesdue to the impact of the NES acquisition, partially offset by a 0.7COVID-19. Fleet productivity decreased 7.7 percent, rental rate decrease. The decreased rental rates reflectedprimarily due to the impact of COVID-19 since March, when rental volume declined in response to shelter-in-place orders and other market restrictions. Rental volume trends improved throughout the NES acquisition, pressure from Canadasecond quarter, with rental volume at the end of June almost 14 percent above the April trough. Through February, fleet productivity was flat year-over-year and the impact of industry fleet expansion. On a pro forma basis including NES' standalone, pre-acquisition results, equipment rental revenue increased 6.5 percent year-over-year, primarily reflecting a 6.9 percent increase in the volume of OEC on rent partially offset by a 0.2 percent rental rate decrease. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets.line with expectations. Equipment rentals represented 8684 percent of total revenues for the ninesix months ended SeptemberJune 30, 2017.2020.


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For the three months ended SeptemberJune 30, 2017,2020, general rentals equipment rentals increased $140,decreased $272, or 12.817.8 percent, as compared to the same period in 2016,2019, primarily reflecting a 16.5 percent increasedue to COVID-19. As noted above, COVID-19 began to impact our operations in the volume of OEC on rent, which includes the impact of the NES acquisition. On a pro forma basis including NES' standalone, pre-acquisition results, the volume of OEC on rent increased 5.5 percent. We believe that the increaseMarch, and, since then, equipment rentals have decreased year-over-year in the volume of OEC on rent reflects improving demand in

many of our core markets.response to shelter-in-place orders and other market restrictions. For the three months ended SeptemberJune 30, 2017,2020, equipment rentals represented 8683 percent of total revenues for the general rentals segment.


For the ninesix months ended SeptemberJune 30, 2017,2020, general rentals equipment rentals increased $290,decreased $301, or 9.510.2 percent, as compared to the same period in 2016,2019, primarily reflecting a 13.3 percent increasedue to COVID-19. As noted above, COVID-19 began to impact our operations in theMarch, when rental volume of OEC on rent, which includes the impact of the NES acquisition, partially offset by decreased rental rates. The decreased rental rates reflected the impact of the NES acquisition, pressure from Canadadeclined in response to shelter-in-place orders and the impact of industry fleet expansion. On a pro forma basis including NES' standalone, pre-acquisition results, the volume of OEC on rent increased 5.4 percent. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets.other market restrictions. For the ninesix months ended SeptemberJune 30, 2017,2020, equipment rentals represented 8583 percent of total revenues for the general rentals segment.


For the three months ended SeptemberJune 30, 2017,2020, trench, power and pumpfluid solutions equipment rentals increased $74,decreased $46, or 32.910.6 percent, as compared to the same period in 2016, primarily reflecting a 38.6 percent increase in the volume of OEC on rent. Trench, power and pump average OEC for the three months ended September 30, 2017 increased 16.9 percent as compared to the same period in 2016. The increase in the volume of OEC on rent significantly exceeded the increase in average OEC2019, primarily due to improved performanceCOVID-19. As noted above, COVID-19 began to impact our operations in our Pump Solutions region. The improvementMarch, and, since then, equipment rentals have decreased year-over-year in the Pump Solutions region primarily reflected growth in revenue from i) upstream oilresponse to shelter-in-place orders and gas customers, which have experienced significant volatility in recent years, and ii) construction and mining customers.other market restrictions. For the three months ended SeptemberJune 30, 2017,2020, equipment rentals represented 9391 percent of total revenues for the trench, power and pumpfluid solutions segment.


For the ninesix months ended SeptemberJune 30, 2017,2020, trench, power and pumpfluid solutions equipment rentals increased $136,decreased $29, or 23.63.6 percent, as compared to the same period in 2016,2019, primarily reflectingdue to COVID-19, partially offset by a 30.66.9 percent increase in average OEC. As noted above, COVID-19 began to impact our operations in March, when rental volume declined in response to shelter-in-place orders and other market restrictions. For the volume of OEC on rent. Trench, power and pump average OEC for the ninesix months ended SeptemberJune 30, 2017 increased 10.4 percent as compared to the same period in 2016. The increase in the volume of OEC on rent significantly exceeded the increase in average OEC primarily due to improved performance in our Pump Solutions region. The improvement in the Pump Solutions region primarily reflected growth in revenue from i) upstream oil and gas customers, which have experienced significant volatility in recent years, and ii) construction and mining customers. For the nine months ended September 30, 2017,2020, equipment rentals represented 9290 percent of total revenues for the trench, power and pumpfluid solutions segment.
Sales of rental equipment. For the ninesix months ended SeptemberJune 30, 2017,2020, sales of rental equipment represented approximately 89 percent of our total revenues. Our general rentals segment accounted for most of these sales. For the three and six months ended SeptemberJune 30, 2017,2020, sales of rental equipment increased 24.1decreased 10.7 percent and 1.3 percent, respectively, from the same periodperiods in 2016,2019. The decrease for the three months ended June 30, 2020 was primarily reflecting increased volume.due to reduced wholesale sales, which were impacted by COVID-19. For the ninesix months ended SeptemberJune 30, 2017,2020, sales of rental equipment did not change significantly from the same period in 2016.materially year-over-year.
Sales of new equipment. For the ninesix months ended SeptemberJune 30, 2017,2020, sales of new equipment represented approximately 3 percent of our total revenues. Our general rentals segment accounted for most of these sales. For the three and ninesix months ended SeptemberJune 30, 2017,2020, sales of new equipment increased 33.3decreased 11.7 percent and 31.35.7 percent, respectively, from the same periods in 2016,2019 primarily reflecting increased volume and increased salesdue to the impact of larger equipment.COVID-19.
Contractor supplies sales. Contractor supplies sales represent our revenues associated with selling a variety of supplies, including construction consumables, tools, small equipment and safety supplies. For the ninesix months ended SeptemberJune 30, 2017,2020, contractor supplies sales represented approximately 1 percent of our total revenues. Our general rentals segment accounted for most of these sales. Contractor supplies sales for the three and ninesix months ended SeptemberJune 30, 2017 did not change significantly2020 decreased 14.8 percent and 5.9 percent, respectively, from the same periods in 2016.2019 primarily due to the impact of COVID-19.
Service and other revenues. Service and other revenues primarily represent our revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). For the ninesix months ended SeptemberJune 30, 2017,2020, service and other revenues represented approximately 2 percent of our total revenues. Our general rentals segment accounted for most of these sales. For the three and six months ended SeptemberJune 30, 2017, service and other revenues increased 20.0 percent from the same period in 2016 primarily reflecting the impact of the NES acquisition discussed in note 2 to the condensed consolidated financial statements and an increased emphasis on this line of business. For the nine months ended September 30, 2017,2020, service and other revenues did not change significantlymaterially from the same periodperiods in 2016.2019.
Segment Equipment Rentals Gross Profit
Segment equipment rentals gross profit and gross margin were as follows:

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General
rentals		Trench, power and fluid solutionsTotal
General
rentals
 Trench, power and pump Total
Three Months Ended September 30, 2017     
Three Months Ended June 30, 2020Three Months Ended June 30, 2020
Equipment Rentals Gross Profit$525
 $164
 $689
Equipment Rentals Gross Profit$419  $181  $600  
Equipment Rentals Gross Margin42.4% 54.8% 44.9%Equipment Rentals Gross Margin33.4 %46.8 %36.5 %
Three Months Ended September 30, 2016     
Three Months Ended June 30, 2019Three Months Ended June 30, 2019
Equipment Rentals Gross Profit$469
 $117
 $586
Equipment Rentals Gross Profit$593  $199  $792  
Equipment Rentals Gross Margin42.8% 52.0% 44.3%Equipment Rentals Gross Margin38.8 %46.0 %40.4 %
Nine Months Ended September 30, 2017     
Six Months Ended June 30, 2020Six Months Ended June 30, 2020
Equipment Rentals Gross Profit$1,350
 $359
 $1,709
Equipment Rentals Gross Profit$867  $343  $1,210  
Equipment Rentals Gross Margin40.2% 50.4% 42.0%Equipment Rentals Gross Margin32.7 %44.2 %35.3 %
Nine Months Ended September 30, 2016     
Six Months Ended June 30, 2019Six Months Ended June 30, 2019
Equipment Rentals Gross Profit$1,243
 $274
 $1,517
Equipment Rentals Gross Profit$1,094  $356  $1,450  
Equipment Rentals Gross Margin40.5% 47.6% 41.6%Equipment Rentals Gross Margin37.1 %44.2 %38.6 %

General rentals. For the three months ended SeptemberJune 30, 2017,2020, equipment rentals gross profit increaseddecreased by $56$174, and equipment rentals gross margin decreased by 40540 basis points, from 2016. The gross2019, with 440 basis points of the margin decrease primarily reflectsdecline due to depreciation expense, which was largely flat with 2019, but increased benefits costs, including increased bonus costs associated with improved profitability, and increased depreciation costs, partially offset by a 70 basis point increase in time utilization and decreases in certain costs, including fuel and delivery, as a percentage of revenue, primarily due to COVID-19. As noted above, COVID-19 began to impact our operations in March, and, since then, equipment rentals revenue.have remained down year-over-year in response to shelter-in-place orders and other market restrictions. The volume of OEC on rent increased 16.5 percent, includingremaining 100 basis point decline in equipment rentals gross margin was primarily due to the impact of COVID-19, mitigated by actions we have taken to manage costs, such as the NES acquisition. On a pro forma basis including NES' standalone, pre-acquisition results,reduction of overtime and temporary labor, and the volume of OEC on rent increased 5.5 percent. We believe that the increase in the volume of OEC on rent reflects improving demand in manyleveraging of our core markets. Time utilization is calculated by dividingcurrent capacity to reduce the amount of time an asset is on rent by the amount of time the asset has been owned during the year. For the three months ended September 30, 2017need for third-party delivery and 2016, time utilization was 72.2 percent and 71.5 percent, respectively.

repair services.
For the ninesix months ended SeptemberJune 30, 2017,2020, equipment rentals gross profit increaseddecreased by $107$227, and equipment rentals gross margin decreased by 30440 basis points, from 2016. The gross2019, with 350 basis points of the margin decrease primarily reflects decreased rental rates and increased delivery costs partially offset by a 130 basis pointdecline due to an increase in time utilization.depreciation expense as a percentage of revenue. The decreased rental rates reflectedincrease in depreciation expense includes a $24 asset impairment charge, which was not related to COVID-19, associated with the discontinuation of certain equipment programs. Excluding the impact of the NES acquisition, pressure from Canadaasset impairment charge, depreciation expense was largely flat with 2019, but increased as a percentage of revenue, primarily due to COVID-19. As noted above, COVID-19 began to impact our operations in March, and, since then, equipment rentals have remained down year-over-year in response to shelter-in-place orders and other market restrictions. The remaining 90 basis point decline in equipment rentals gross margin was primarily due to the impact of industry fleet expansion. The volumeCOVID-19, mitigated by actions we have taken to manage costs, such as the reduction of OEC on rent increased 13.3 percent, includingovertime and temporary labor, and the impact of the NES acquisition. On a pro forma basis including NES' standalone, pre-acquisition results, the volume of OEC on rent increased 5.4 percent. We believe that the increase in the volume of OEC on rent reflects improving demand in manyleveraging of our core markets. Whilecurrent capacity to reduce the volume of OEC on rent increased 13.3 percentneed for third-party delivery and equipment rentals increased 9.5 percent, delivery costs increased 18.3 percent due primarily to the increased volume of OEC on rent and increased transfers of equipment among locations in response to, and in anticipation of, customer demand. For the nine months ended September 30, 2017 and 2016, time utilization was 70.1 percent and 68.8 percent, respectively.repair services.
Trench, power and pumpfluid solutions. For the three months ended SeptemberJune 30, 2017,2020, equipment rentals gross profit increaseddecreased by $47$18 and equipment rentals gross margin increased by 28080 basis points from 2016. The increase in equipment rentals gross profit primarily reflects increased equipment rentals revenue on a larger fleet. Year-over-year, trench, power and pump equipment rentals increased 32.9 percent, average OEC increased 16.9 percent and the volume of OEC on rent increased 38.6 percent.2019. The increase in the volume of OEC on rent significantly exceeded the increase in average OEC primarily due to improved performance in our Pump Solutions region. The improvement in the Pump Solutions region primarily reflected growth in revenue from i) upstream oil and gas customers, which have experienced significant volatility in recent years, and ii) construction and mining customers. The increase in equipment rentals gross margin reflected decreased compensation,was primarily due to decreases in certain operating costs, including delivery, repairs and labor, partially offset by increases in depreciation expense and propertycertain operating costs as a percentage of revenue. As comparednoted above, we have reduced overtime and temporary labor primarily in response to the equipment rentalsimpact of COVID-19, and have leveraged our current capacity to reduce the need for third-party delivery and repair services. Depreciation expense was largely flat year-over-year, but increased as a percentage of revenue, increase of 32.9 percent, compensation costs increased 18.5 percentprimarily due primarily to increased headcount associated with higher rental volume, depreciation of rental equipment increased 13.3 percent and property costs were flat. Capitalizing on the demand for the higher margin equipment rented by our trench, power and pump segment has been a key component of our strategy in recent years.COVID-19.
For the ninesix months ended SeptemberJune 30, 2017,2020, equipment rentals gross profit increaseddecreased by $85$13, and equipment rentals gross margin increased by 280 basis points from 2016.was flat, year-over-year. The increase in equipment rentalsflat gross profit primarily reflects increased equipment rentals revenue on a larger fleet. Year-over-year, trench, power and pump equipment rentals increased 23.6 percent, average OEC increased 10.4 percent and the volume of OEC on rent increased 30.6 percent. The increase in the volume of OEC on rent significantly exceeded the increase in average OEC primarily due to improved performance in our Pump Solutions region. The improvement in the Pump Solutions regionmargin primarily reflected growthdecreases in revenue from i) upstream

oilcertain operating costs, including delivery and gas customers, which have experienced significant volatilityrepairs, offset by increases in recent years,depreciation expense and ii) construction and mining customers. The increase in equipment rentals gross margin reflected decreased compensation, depreciation and propertycertain operating costs as a percentage of revenue. As comparednoted above, in response to the equipment rentalsimpact of COVID-19, we have leveraged our current capacity to reduce the need for third-party delivery and repair services. Depreciation expense was largely flat year-over-year, but increased as a percentage of revenue, increase of 23.6 percent, compensation costs increased 13.1 percentprimarily due primarily to increased headcount associated with higher rental volume, depreciation of rental equipment increased 9.1 percent and property costs increased 1.0 percent. Capitalizing on the demand for the higher margin equipment rented by our trench, power and pump segment has been a key component of our strategy in recent years.COVID-19.
Gross Margin. Gross margins by revenue classification were as follows:
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Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2017 2016 Change 2017 2016 Change 20202019Change20202019Change
Total gross margin43.8% 43.5% 30 bps 41.2% 41.2% —Total gross margin36.2 %39.8 %(360) bps35.1%37.9%(280) bps
Equipment rentals44.9% 44.3% 60 bps 42.0% 41.6% 40 bpsEquipment rentals36.5 %40.4 %(390) bps35.3%38.6%(330) bps
Sales of rental equipment39.6% 39.3% 30 bps 40.5% 40.4% 10 bpsSales of rental equipment40.3 %41.1 %(80) bps40.1%38.0%210 bps
Sales of new equipment15.0% 16.7% (170) bps 14.3% 17.7% (340) bpsSales of new equipment13.2 %15.0 %(180) bps13.0%13.9%(90) bps
Contractor supplies sales33.3% 31.6% 170 bps 30.0% 31.7% (170) bpsContractor supplies sales30.4 %29.6 %80 bps29.2%29.4%(20) bps
Service and other revenues53.3% 60.0% (670) bps 51.2% 59.5% (830) bpsService and other revenues35.6 %45.7 %(1,010) bps38.0%46.7%(870) bps
For the three months ended SeptemberJune 30, 2017,2020, total gross margin increased 30decreased 360 basis points as compared tofrom the same period in 2016.2019. Equipment rentals gross margin increased 60decreased 390 basis points year-over-year, with 370 basis points of the margin decline due to depreciation expense, which was largely flat with 2019, but increased as a percentage of revenue, primarily reflecting a 160due to COVID-19. As noted above, COVID-19 began to impact our operations in March, and, since then, equipment rentals have remained down year-over-year in response to shelter-in-place orders and other market restrictions. The remaining 20 basis point increasedecline in time utilizationequipment rentals gross margin was primarily due to the impact of COVID-19, mitigated by actions we have taken to manage costs, such as the reduction of overtime and temporary labor, and the leveraging of our current capacity to reduce the need for third-party delivery and repair services. The gross margin fluctuations from sales of new equipment, contractor supplies sales and service and other revenues generally reflect normal variability and, to varying degrees, the impact of COVID-19, and such revenue types did not account for a 0.1significant portion of total gross profit (gross profit for these revenue types represented 4 percent rental rate increase, partially offset by increased compensation costs. For the three months ended September 30, 2017 and 2016, time utilization was 71.9 percent and 70.3 percent, respectively. Time utilizationof total gross profit for the three months ended SeptemberJune 30, 2017 was a third quarter record. The volume of OEC on rent increased 18.2 percent, including the impact of the NES acquisition. On a pro forma basis including NES' standalone, pre-acquisition results, the volume of OEC on rent increased 7.6 percent. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets. As compared to the equipment rentals revenue increase of 16.2 percent, compensation costs increased 19.1 percent due in part to increased bonuses associated with improved operating results. Gross margin from sales of new equipment decreased 170 basis points. Sales of new equipment increased 33.3 percent, primarily reflecting increased volume and increased sales of larger equipment, some of which were at lower margins.2020). Gross margin from service and other revenues decreased 670 basis points. In 2017, aswas particularly impacted by COVID-19, which resulted in reduced training revenue without a result of our increased focus on the service line of business, we increased the allocation of labor to it. Such labor costs were formerly includedproportionate reduction in cost of equipment rentals.

costs.
For the ninesix months ended SeptemberJune 30, 2017,2020, total gross margin was flat withdecreased 280 basis points from the same period in 2016.2019. Equipment rentals gross margin increased 40decreased 330 basis points primarily reflecting a 190year-over-year, with 280 basis pointpoints of the margin decline due to increased depreciation expense. The increase in time utilization partially offset bydepreciation expense included a 0.7 percent rental rate decrease. The decreased rental rates reflected$24 asset impairment charge, which was not related to COVID-19, associated with the discontinuation of certain equipment programs. Excluding the impact of the NES acquisition, pressure from Canadaasset impairment charge, depreciation expense was largely flat with 2019, but increased as a percentage of revenue, primarily due to COVID-19. As noted above, COVID-19 began to impact our operations in March, and, the impact of industry fleet expansion. For the nine months ended September 30, 2017since then, equipment rentals have remained down year-over-year in response to shelter-in-place orders and 2016, time utilizationother market restrictions. The remaining 50 basis point decline in equipment rentals gross margin was 69.3 percent and 67.4 percent, respectively. The volume of OEC on rent increased 14.5 percent, including the impact of the NES acquisition. On a pro forma basis including NES' standalone, pre-acquisition results, the volume of OEC on rent increased 6.9 percent. We believe that the increase in the volume of OEC on rent reflects improving demand in many of our core markets. Gross margin from sales of new equipment decreased 340 basis points. Sales of new equipment increased 31.3 percent, primarily reflecting increased volume and increased sales of larger equipment, some of which were at lower margins. Gross margin from contractor supplies sales decreased 170 basis points, primarily due to the impact of some large volumeCOVID-19, mitigated by actions we have taken to manage costs, such as the reduction of overtime and temporary labor, and the leveraging of our current capacity to reduce the need for third-party delivery and repair services. Gross margin from sales atof rental equipment increased 210 basis points from the same period in 2019 primarily due to lower margins.margin sales of fleet acquired in the BlueLine acquisition in 2019. The gross margin fluctuations from sales of new equipment, contractor supplies sales and service and other revenues generally reflect normal variability and, to varying degrees, the impact of COVID-19, and such revenue types did not account for a significant portion of total gross profit (gross profit for these revenue types represented 4 percent of total gross profit for the six months ended June 30, 2020). Gross margin from service and other revenues decreased 830 basis points. In 2017, aswas particularly impacted by COVID-19, which resulted in reduced training revenue without a result of our increased focus on the service line of business, we increased the allocation of labor to it. Such labor costs were formerly includedproportionate reduction in cost of equipment rentals.costs.
Other costs/(income)
The table below includes the other costs/(income) in our condensed consolidated statements of income, as well as key associated metrics, for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016:

2019:
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Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2017 2016Change 2017 2016Change 20202019Change20202019Change
Selling, general and administrative ("SG&A") expense$237 $17932.4% $648 $53321.6%Selling, general and administrative ("SG&A") expense$222$271(18.1)%$489$551(11.3)%
SG&A expense as a percentage of revenue13.4% 11.9%150 bps 13.7% 12.6%110 bpsSG&A expense as a percentage of revenue11.4%11.8%(40) bps12.0%12.5%(50) bps
Merger related costs16 ——% 32 ——%Merger related costs———%—1(100.0)%
Restructuring charge9 4125.0% 28 8250.0%Restructuring charge36(50.0)%514(64.3)%
Non-rental depreciation and amortization63 613.3% 189 192(1.6)%Non-rental depreciation and amortization95105(9.5)%195209(6.7)%
Interest expense, net131 11019.1% 338 349(3.2)%Interest expense, net130180(27.8)%266331(19.6)%
Other income, net(5) (1)400.0% (5) (3)66.7%Other income, net—(2)(100.0)%(4)(5)(20.0)%
Provision for income taxes123 1166.0% 263 2543.5%Provision for income taxes3981(51.9)%92126(27.0)%
Effective tax rate38.2% 38.3%(10) bps 36.9% 38.1%(120) bpsEffective tax rate15.5%23.1%(760) bps19.3%22.1%(280) bps
SG&A expense primarily includes sales force compensation, information technology costs, third party professional fees, management salaries, bad debt expense and clerical and administrative overhead. The increases in SG&A expense as a percentage of revenue for the three and ninesix months ended SeptemberJune 30, 20172020 decreased from the same periods in 2019 primarily reflect increased compensation costs, including stock compensation costs, largely due to significant reductions in professional fees and travel and entertainment expenses, which were implemented in response to COVID-19, partially offset by an increase in salaries, net of reduced bonuses, as a percentage of revenue, which also reflects the impact of the NES acquisition discussed in note 2 to the condensed consolidated financial statements, improved profitability, and increases in our stock price and in the volume of stock awards.COVID-19.
The merger related costs reflect transaction costs associated with the NESBakerCorp and NeffBlueLine acquisitions discussedthat were completed in note 2 to our condensed consolidated financial statements.2018. We have made a number of acquisitions in the past and may continue to make acquisitions in the future. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. The historic acquisitions that have included merger related costs are RSC, which had annual revenues of approximately $1.5 billion prior to the acquisition, and National Pump, which had annual revenues of over $200 prior to the acquisition. As discussed in note 2 to our condensed consolidated financial statements,acquisition, NES, which had annual revenues of approximately $369 andprior to the acquisition, Neff, which had annual revenues of approximately $413.$413 prior to the acquisition, BakerCorp, which had annual revenues of approximately $295 prior to the acquisition, and BlueLine, which had annual revenues of approximately $786 prior to the acquisition.
The restructuring charges primarily reflect severance and branch closure charges associated with our restructuring programs. In the secondfourth quarter of 2017,2019, we initiated a restructuring program following the closing of the NES acquisition discussed in note 2 to the condensed consolidated financial statements. The restructuring program also includes actions undertaken associated with 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. Additionally, following the closing of the Neff acquisition that is discussed in note 2 to the condensed consolidated financial statements on October 2, 2017, the restructuring program will include actions that we expect to undertake associated with the Neff acquisition.consolidation of certain common functions, the relocation of our shared-service facilities and certain other cost reduction measures. For additional information, see note 4 to ourthe condensed consolidated financial statements.
Non-rental depreciation and amortization includes (i)i) the amortization of other intangible assets and (ii)ii) depreciation expense associated with equipment that is not offered for rent (such as computers and office equipment) and amortization expense associated with leasehold improvements. Our other intangible assets consist of customer relationships, non-compete agreements and non-compete agreements.trade names and associated trademarks.
Interest expense, net for the three and ninesix months ended SeptemberJune 30, 2017 includes losses of $312020 decreased 27.8 percent and $43, respectively, associated with the redemptions of $250 principal amount of our 7 5/819.6 percent Senior Notes and all of our 6 1/8 percent Senior Notes, as discussed in note 8 to the condensed consolidated financial statements.year-over-year, respectively. Interest expense, net for the three and ninesix months ended SeptemberJune 30, 2016 includes aggregate losses2019 included a loss of $10 and $36, respectively,$32 primarily associated with the redemptions of allfull redemption of our 8 51 3/4 percent Senior Notes and 7 3/8 percent Senior Notes, and an amendment to our ABL facility.Notes. Excluding the impact of the debt redemption losses,this loss, interest expense, net for the three and six months ended SeptemberJune 30, 2017 was flat2020 decreased by 12.2 percent and 11.0 percent year-over-year, respectively, primarily due to increaseddecreases in average debt offset by a lowerand the average cost of debt. Excluding the impact of the debt redemption losses, interest expense, net for the nine months ended September 30, 2017 decreased primarily due to a lower average cost of debt.
The differences between the 20172020 and 20162019 effective tax rates and the U.S. federal statutory income tax rate of 3521 percent primarily reflect the geographical mix of income between foreign and domestic operations, and the impact of state and local taxes, certain deductible and certain nondeductible charges. Additionally,charges, and the 2020 release of a valuation allowance on foreign tax credits that we now anticipate using.
In March 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act”) was enacted. The CARES Act, among other things, includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, technical corrections to tax depreciation methods for qualified improvement property and deferral of employer payroll taxes. The CARES Act did not materially impact our effective tax rate for the ninethree and six months ended SeptemberJune 30, 2017 includes a2020, and is not expected to impact our effective tax reductionrate in 2020, although it will impact the timing of $8 associatedcash payments for taxes. As of June 30, 2020, we have deferred employer payroll taxes of $19 under the
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CARES Act, with excess tax benefits from share-based payment arrangements, as discussedapproximately half of the deferral due in note 1 to our condensed consolidated financial statements.each of 2021 and 2022. We may defer additional future employer payroll taxes under the CARES Act.

Balance sheet. Accounts receivable, net increaseddecreased by $231,$304, or 25.119.9 percent, from December 31, 20162019 to SeptemberJune 30, 20172020, primarily due to increasedreduced revenue, which includedreflected the impact of the NES acquisition discussed in note 2 to the condensed consolidated financial statements. Rental equipment, net increasedboth COVID-19 and seasonality. Accounts payable decreased by $1.202 billion,$138, or 19.430.4 percent, from December 31, 20162019 to SeptemberJune 30, 20172020, primarily due to the impact of the NES acquisition and increaseddecreased capital expenditures, largely in response to a strong operating environment. Accounts payable increased by $369, or 151.9 percent, from December 31, 2016 to September 30, 2017 primarily due to increased capital expenditures due to seasonality and a strong operating environment. Accrued expenses and other liabilities increased by $123, or 35.8 percent, from December 31, 2016 to September 30, 2017 primarily due to (i) increased incentive compensation accruals associated with improved profitability and (ii) accrued income taxes.COVID-19.
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Liquidity and Capital Resources
We manage our liquidity using internal cash management practices, which are subject to (i) the policies and cooperation of the financial institutions we utilize to maintain and provide cash management services, (ii) the terms and other requirements of the agreements to which we are a party and (iii) the statutes, regulations and practices of each of the local jurisdictions in which we operate. See "Financial Overview" above for a summary of recent capital structure actions taken to improve our financial flexibility and liquidity.
Since 2012, we have repurchased a total of $1.450$3.7 billion of Holdings' common stock under threefive completed share repurchase programs. Additionally, in July 2015,On January 28, 2020, our Board of Directors authorized a $1 billionnew $500 share repurchase program, which commenced in November 2015. Asthe first quarter of October 16, 2017,2020. Through March 18, 2020, when the program was paused due to the COVID-19 pandemic, we have repurchased $627$257 of Holdings' common stock under the $1 billion share repurchase program. In October 2016, we paused repurchases underWe are currently unable to estimate when, or if, the program as we evaluated potential acquisition opportunities. As discussed in note 2 to the condensed consolidated financial statements, we completed the acquisitions of NES in April 2017 and Neff in October 2017. In October 2017, our Board authorized the resumption of the $1 billion share repurchase program,will be restarted, and we intendexpect to complete the program in 2018.provide an update at a future date.
Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment, and borrowings available under our ABL facility and accounts receivable securitization facility. As of SeptemberJune 30, 2017,2020, we had cash and cash equivalents of $324.$127. Cash equivalents at SeptemberJune 30, 20172020 consist of direct obligations of financial institutions rated A or better. We believe that our existing sources of cash will be sufficient to support our existing operations over the next 12 months. The table below presents financial information associated with our principal sources of cash as of and for the ninesix months ended SeptemberJune 30, 2017:2020:
ABL facility: 
Borrowing capacity, net of letters of credit$2,545
Outstanding debt, net of debt issuance costs (1)408
Interest rate at September 30, 20172.8%
Average month-end debt outstanding (1)1,243
Weighted-average interest rate on average debt outstanding2.6%
Maximum month-end debt outstanding (1)1,802
Accounts receivable securitization facility: 
Borrowing capacity9
Outstanding debt, net of debt issuance costs666
Interest rate at September 30, 20172.0%
Average month-end debt outstanding584
Weighted-average interest rate on average debt outstanding1.8%
Maximum month-end debt outstanding667
_________________
(1)    The average and maximum
ABL facility:
Borrowing capacity, net of letters of credit$3,640 
Outstanding debt, net of debt issuance costs (1)47 
Interest rate at June 30, 20201.6 %
Average month-end principal amount of debt outstanding (1)765 
Weighted-average interest rate on average debt outstanding2.4 %
Maximum month-end principal amount of debt outstanding (1)1,494 
Accounts receivable securitization facility (2):
Borrowing capacity56 
Outstanding debt, net of debt issuance costs743 
Interest rate at June 30, 20201.6 %
Average month-end principal amount of debt outstanding784 
Weighted-average interest rate on average debt outstanding2.0 %
Maximum month-end principal amount of debt outstanding811 
 ___________________
(1)The outstanding amount of debt under the ABL facility exceededand the average outstanding amount are less than the maximum outstanding as of September 30, 2017amount primarily due to the pay downuse of proceeds (i) from the issuance of 4 percent Senior Notes discussed in note 6 to the condensed consolidated financial statements and (ii) from operations to reduce borrowings under the ABL facility usingfacility. At the time of the 4 percent Senior Notes offering, we indicated our expectation that we would re-borrow an amount equal to the net proceeds from debt issued in the third quarter of 2017. Following the closing of the Neff acquisition on October 2, 2017, we usedoffering, along with additional borrowings under the ABL facility, to partially fundredeem the Neff acquisition. For additional detail, see$800 principal amount of our 5 1/2 percent Senior Notes due 2025 on or after July 15, 2020. Prior to issuing any redemption notice for the 5 1/2 percent Senior Notes due 2025, we considered the impact of COVID-19 on liquidity, and assessed our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. In July 2020, we issued a redemption notice for the 5 1/2 percent Senior Notes due 2025, and the redemption is expected to occur in August 2020.
(2)As discussed in note 86 to the condensed consolidated financial statements.statements, in April 2020, we amended the accounts receivable securitization facility to adjust, on a temporary basis, the financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The adjustments to these tests were intended to make compliance with such tests more likely for the calendar months ending April 30, 2020 and May 31, 2020, and we were in compliance with such tests for these months. In June 2020, the accounts receivable securitization facility was further amended to (a) extend the maturity date, which may be further extended on a 364-day basis by mutual agreement with the purchasers under the facility, to June 25, 2021, (b) reduce the size of the facility from $975 to $800 and (c) adjust, for the calendar months ending on or after June 30, 2020, the financial tests (including the method of calculation) relating to (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding.
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We expect that our principal needs for cash relating to our operations over the next 12 months will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service, (v) share repurchases and (vi) acquisitions. We plan to fund such

cash requirements from our existing sources of cash. In addition, we may seek additional financing through the securitization of some of our real estate, the use of additional operating leases or other financing sources as market conditions permit.
To access the capital markets, we rely on credit rating agencies to assign ratings to our securities as an indicator of credit quality. Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. Credit ratings also affect the costs of derivative transactions, including interest rate and foreign currency derivative transactions. As a result, negative changes in our credit ratings could adversely impact our costs of funding. Our credit ratings as of October 16, 2017July 27, 2020 were as follows:
Corporate RatingOutlook
Moody’sBa2Stable
Standard & Poor’sBB-BBPositiveStable
A security rating is not a recommendation to buy, sell or hold securities. There is no assurance that any rating will remain in effect for a given period of time or that any rating will not be revised or withdrawn by a rating agency in the future.
Loan Covenants and Compliance. As of SeptemberJune 30, 2017,2020, we were in compliance with the covenants and other provisions of the ABL, facility, the accounts receivable securitization facilityand 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 maintenance 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 SeptemberJune 30, 2017,2020, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial maintenance 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.outstanding (as noted above, in April 2020 and in June 2020, we amended the accounts receivable securitization facility to adjust these financial tests). 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.
URNA’s payment capacity is restricted under the covenants in the ABL facilityand term loan facilities and the indentures governing its outstanding indebtedness. Although this restricted capacity limits our ability to move operating cash flows to Holdings, because of certain intercompany arrangements, we do not expect any material adverse impact on Holdings’ ability to meet its cash obligations.
Sources and Uses of Cash. During the ninesix months ended SeptemberJune 30, 2017,2020, we (i) generated cash from operating activities of $1.766$1.461 billion and (ii) generated cash from the sale of rental and non-rental equipment of $388 and (iii) received cash from debt proceeds, net of payments, of $546.$404. We used cash during this period principally to (i) purchase rental and non-rental equipment of $1.572$455, (ii) make debt payments, net of proceeds, of $1.060 billion and (ii) purchase other companies for $1.063 billion, (iii) purchase shares of our common stock for $26 and (iv) pay financing costs of $44.$276. During the ninesix months ended SeptemberJune 30, 2016,2019, we (i) generated cash from operating activities of $1.630$1.590 billion and (ii) generated cash from the sale of rental and non-rental equipment of $373.$404. We used cash during this period principally to (i) purchase rental and non-rental equipment of $1.210$1.226 billion, (ii) purchase other companies for $195, (iii) make debt payments, net of proceeds, of $209$89 and (iii)(iv) purchase shares of our common stock for $488.$454.
Free Cash Flow GAAP Reconciliation. We define “free cash flow” as (i) net cash provided by operating activities less (ii) purchases of, rental and non-rental equipment plus (iii) proceeds from, sales of rentalequipment. The equipment purchases and non-rental equipment and excess tax benefitsproceeds are included in cash flows from share-based payment arrangements.investing activities. Management believes that free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements. However, free cash flow is not a measure of financial performance or liquidity under GAAP. Accordingly, free cash flow should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. The table below provides a reconciliation between net cash provided by operating activities and free cash flow.

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 Nine Months Ended
 September 30,
 2017 2016
Net cash provided by operating activities$1,766
 $1,630
Purchases of rental equipment(1,485) (1,145)
Purchases of non-rental equipment(87) (65)
Proceeds from sales of rental equipment378
 361
Proceeds from sales of non-rental equipment10
 12
Excess tax benefits from share-based payment arrangements (1)—
 53
Free cash flow$582
 $846
(1)As discussed in note 1 to our condensed consolidated financial statements, we adopted accounting guidance in the first quarter of 2017 that changed the cash flow presentation of excess tax benefits from share-based payment arrangements. In the table above, the excess tax benefits from share-based payment arrangements for 2017 are presented as a component of net cash provided by operating activities, while, for 2016, they are presented as a separate line item. Because we historically included the excess tax benefits from share-based payment arrangements in the free cash flow calculation, the adoption of this guidance did not change the calculation of free cash flow.

Six Months Ended
 June 30,
 20202019
Net cash provided by operating activities$1,461  $1,590  
Purchases of rental equipment(353) (1,129) 
Purchases of non-rental equipment(102) (97) 
Proceeds from sales of rental equipment384  389  
Proceeds from sales of non-rental equipment20  15  
Insurance proceeds from damaged equipment13  12  
Free cash flow$1,423  $780  
Free cash flow for the ninesix months ended SeptemberJune 30, 20172020 was $582, a decrease$1.423 billion, an increase of $264$643 as compared to $846$780 for the ninesix months ended SeptemberJune 30, 2016.2019. Free cash flow decreasedincreased primarily due to increaseddecreased net rental capital expenditures (defined as purchases of rental equipment less the proceeds from sales of rental equipment), partially offset by increasedreduced net cash provided by operating activities. Net rental capital expenditures decreased $771, or 104 percent, year-over-year.
Certain Information Concerning Contractual Obligations. Obligations. The table below provides certain information concerning the payments coming due under certain categories of our existing contractual obligations as of SeptemberJune 30, 2017:
 20172018201920202021ThereafterTotal 
Debt and capital leases (1)$7
$698
$18
$5
$644
$7,080
$8,452
Interest due on debt (2)101
398
388
388
378
1,566
3,219
Operating leases (1):       
Real estate27
101
82
63
46
55
374
Non-rental equipment11
41
34
28
18
11
143
Service agreements (3)4
13
3
1
—
—
21
Purchase obligations (4)301
20
—
—
—
—
321
Total (5)$451
$1,271
$525
$485
$1,086
$8,712
$12,530
2020:
 
20202021202220232024ThereafterTotal
Debt and finance leases (1)$30  $809  $41  $31  $871  $8,716  $10,498  
Interest due on debt (2)225  441  434  433  420  1,110  3,063  
Operating leases (1)105  192  158  124  90  132  801  
Service agreements (3)7  15  32  —  —  —  54  
Purchase obligations (4)511  10  —  —  —  —  521  
Transition tax on unremitted foreign earnings and profits (5)—  —  —  —  —  5  5  
Total (6)$878  $1,467  $665  $588  $1,381  $9,963  $14,942  
_________________
(1)
The payments due with respect to a period represent (i) in the case of debt and capital leases, the scheduled principal payments due in such period, and (ii) in the case of operating leases, the minimum lease payments due in such period under non-cancelable operating leases. We have given notice of our intention to redeem the remaining $225 principal amount of our 7 5/8 percent Senior Notes in October 2017 using borrowings available under our ABL facility. The 7 5/8 percent Senior Notes are reflected in the table above using the 2021 maturity date of the ABL facility.
(2)
Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of September 30, 2017. As discussed above, in October 2017, we expect to redeem the remaining $225 principal amount of our 7 5/8 percent Senior Notes using borrowings available under our ABL facility. Interest on the 7 5/8 percent Senior Notes is reflected in the table above using the interest rate on the ABL facility and the 2021 maturity date of the ABL facility.
(3)These primarily represent service agreements with third parties to provide wireless and network services.
(4)As of September 30, 2017, 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 2017 and 2018.
(5)This information excludes $4 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.
(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 6 to the condensed consolidated financial statements for further debt information, and note 7 for further finance lease and operating lease information. As discussed in note 6, we have given notice of our intention to redeem the remaining $800 principal amount of our 5 1/2 percent Senior Notes due 2025 in August 2020 using borrowings available under our ABL facility. The 5 1/2 percent Senior Notes due 2025 are reflected in the table above using the 2024 maturity date of the ABL facility.
(2) Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of June 30, 2020. As discussed above, in August 2020, we expect to redeem the remaining $800 principal amount of our 5 1/2 percent Senior Notes due 2025 using borrowings available under our ABL facility. Interest on the 5 1/2 percent Senior Notes due 2025 is reflected in the table above using the interest rate on the ABL facility and the 2024 maturity date of the ABL facility.
(3) These primarily represent service agreements with third parties to provide wireless and network services.
(4) As of June 30, 2020, 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 primarily expected to be completed throughout 2020. As of December 31, 2019, we had $1.552 billion of outstanding purchase orders, which we could generally cancel with 30 days' notice and without cancellation penalties. In 2020, due primarily to COVID-19, we canceled a significant portion of our purchase orders. We will make future purchase order determinations based on our continuing assessment of the impact of COVID-19.
(5) The Tax Cuts and Jobs Act, which was enacted in December 2017, included a transition tax on unremitted foreign earnings and profits. We have elected to pay the transition tax amount payable of $55 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 $12 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 $122 at June 30, 2020. Self-
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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.
Relationship between Holdings and URNA. Holdings is principally a holding company and primarily conducts its operations through its wholly owned subsidiary, URNA, and subsidiaries of URNA. Holdings licenses its tradename and other intangibles and provides certain services to URNA in connection with its operations. These services principally include:

(i) senior management services; (ii) finance and tax-related services and support; (iii) information technology systems and support; (iv) acquisition-related services; (v) legal services; and (vi) human resource support. In addition, Holdings leases certain equipment and real property that are made available for use by URNA and its subsidiaries.

53
Item 3.Quantitative and Qualitative Disclosures about Market Risk
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Item 3.Quantitative and Qualitative Disclosures about Market Risk
Our exposure to market risk primarily consists of (i) interest rate risk associated with our variable and fixed rate debt and (ii) foreign currency exchange rate risk associated with our Canadianforeign operations.
Interest Rate Risk. As of SeptemberJune 30, 2017,2020, we had an aggregate of $1.1$1.8 billion of indebtedness that bears interest at variable rates, comprised of borrowings under the ABL, facility and the accounts receivable securitization facility.and term loan facilities. The amount of variable rate indebtedness outstanding under the ABL facility and accounts receivable securitization facilitythese facilities may fluctuate significantly. See "Liquidity and Capital Resources" abovenote 6 to the condensed consolidated financial statements for the amounts outstanding, and the interest rates thereon, as of SeptemberJune 30, 20172020 under the ABL facility and the accounts receivable securitization facility.these facilities. As of SeptemberJune 30, 2017,2020, based upon the amount of our variable rate debt outstanding, our annual after-tax earnings would decrease by approximately $7$14 for each one percentage point increase in the interest rates applicable to our variable rate debt.
At SeptemberJune 30, 2017,2020, we had an aggregate of $7.3$8.6 billion of indebtedness that bears interest at fixed rates. A one percentage point decrease in market interest rates as of SeptemberJune 30, 20172020 would increase the fair value of our fixed rate indebtedness by approximately seven percent.six percent. For additional information concerning the fair value of our fixed rate debt, see note 75 (see “Fair Value of Financial Instruments”) to our condensed consolidated financial statements.
Currency Exchange Risk. The functional currencyWe operate in the U.S., Canada and Europe. In July 2018, we completed the acquisition of BakerCorp, which allowed for our Canadian operations isentry into select European markets. During the Canadian dollar. As a result,six months ended June 30, 2020, our future earnings could be affected by fluctuations in the exchange rate between the U.S. and Canadian dollars. Based upon the levelforeign subsidiaries accounted for $336, or 8 percent, of our Canadiantotal revenue of $4.064 billion, and $14, or 3 percent, of our total pretax income of $477. Based on the size of our foreign operations during 2016 relative to the Company as a whole, we do not believe that a 10 percent change in this exchange raterates would causehave a material impact on our annual after-tax earnings to change by approximately $5.earnings. We do not engage in purchasing forward exchange contracts for speculative purposes.


Item 4.Controls and Procedures
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Item 4.Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act, as of SeptemberJune 30, 2017.2020. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of SeptemberJune 30, 2017.2020.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended SeptemberJune 30, 20172020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION
 
Item 1.Legal Proceedings
Item 1.Legal Proceedings
The information set forth under note 98 to our unaudited condensed consolidated financial statements of this quarterly report on Form 10-Q is incorporated by reference in answer to this item. Such information is limited to certain recent developments.


Item 1A.Risk Factors
Item 1A.Risk Factors
Our results of operations and financial condition are subject to numerous risks and uncertainties described in our 20162019 Form 10-K and first quarter 2020 Form 10-Q, which risk factors are incorporated herein by reference. You should carefully consider thesethe risk factors in our 2019 Form 10-K and first quarter 2020 Form 10-Q in conjunction with the other information contained in this report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively impacted.


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
(c) The following table provides information about purchases of Holdings’ common stock by Holdings during the thirdsecond quarter of 2017:2020:
PeriodTotal Number of
Shares Purchased		Average Price
Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program (2)
April 1, 2020 to April 30, 20201,262  (1)$93.65  —  
May 1, 2020 to May 31, 2020876  (1)$123.94  —  
June 1, 2020 to June 30, 2020558  (1)$146.43  —  
Total2,696  $114.42  —  $243,081,785  
(1)All shares purchased 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 January 28, 2020, our Board authorized a $500 million share repurchase program, which commenced in the first quarter of 2020. The program was paused on March 18, 2020 due to the COVID-19 pandemic. We are currently unable to estimate when, or if, the program will be restarted, and we expect to provide an update at a future date.


56
Period
Total Number of
Shares Purchased
 
Average Price
Paid Per Share
 Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program (2)
July 1, 2017 to July 31, 2017619
(1)$91.80
 —
 —
August 1, 2017 to August 31, 201717,452
(1)$116.54
 —
 —
September 1, 2017 to September 30, 2017923
(1)$73.09
 —
 —
Total18,994
 $113.62
 —
 $372,997,032
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Item 6.Exhibits
(1)Reflects shares 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 July 21, 2015, our Board authorized a $1 billion share repurchase program which commenced in November 2015. In October 2016, we paused repurchases under the program as we evaluated potential acquisition opportunities. As discussed in note 2 to the condensed consolidated financial statements, we completed the acquisitions of NES in April 2017 and Neff in October 2017. In October 2017, our Board authorized the resumption of the share repurchase program, and we intend to complete the program in 2018.



Item 6.Exhibits

2(a)
Agreement and Plan of Merger, dated as of August 16, 2017,June 30, 2018, by and among United Rentals, (North America), Inc., UR Merger Sub IIIIV Corporation and Neff CorporationBakerCorp International Holdings, Inc. (incorporated herein by reference to Exhibit 2.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on July 2, 2018)
2(b)
Agreement and Plan of Merger, dated as of September 10, 2018, by and among United Rentals, Inc., UR Merger Sub V Corporation, Vander Holding Corporation and Platinum Equity Advisors, LLC, solely in its capacity as the initial Holder Representative thereunder (incorporated by reference to Exhibit 2.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on August 17, 2017September 10, 2018)
3(a)
3(b)
Amended and Restated By-Laws of United Rentals, Inc., amended as of May 4, 2017 (incorporated by reference to Exhibit 3.4 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on May 4, 20178, 2020))
3(c)3(b)
3(c)
Restated Certificate of Incorporation of United Rentals (North America), Inc., dated April 30, 2012 (incorporated by reference to Exhibit 3(c) of the United Rentals, Inc. and United Rentals (North America), Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
3(d)
By-laws of United Rentals (North America), Inc. dated May 8, 2013 (incorporated by reference to Exhibit 3(d) of the United Rentals, Inc. and United Rentals (North America), Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
4(a)10(a)
Indenture for the 4 7/8 percent Notes due 2028, dated as of August 11, 2017, among United Rentals (North America), Inc., United Rentals, Inc., each of United Rentals (North America), Inc.’s subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the Form of 2028 Note) (incorporated by reference to Exhibit 4.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on August 11, 2017)
4(b)
Indenture for the 4 5/8 percent Notes due 2025, dated as of September 22, 2017, among United Rentals (North America), Inc., United Rentals, Inc., each of United Rentals (North America), Inc.’s subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the Form of 2025 Note) (incorporated by reference to Exhibit 4.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on September 22, 2017)
4(c)
Indenture for the 4 7/8 percent Notes due 2028, dated as of September 22, 2017, among United Rentals (North America), Inc., United Rentals, Inc., each of United Rentals (North America), Inc.’s subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the Form of 2028 Note) (incorporated by reference to Exhibit 4.2 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on September 22, 2017)
10(a)
Assignment and Acceptance Agreement and Amendment No. 611 to Third Amended and Restated Receivables Purchase Agreement, and Amendment No. 4 to Third Amended and Restated Purchase and Contribution Agreement, dated as of August 29, 2017,April 27, 2020, by and among United Rentals (North America), Inc., United Rentals Receivables LLC II, United Rentals, Inc., Liberty Street Funding LLC, Gotham Funding Corporation, Fairway Finance Company, LLC, The Bank of Nova Scotia, PNC Bank, National Association, Truist Bank (successor by merger to SunTrust Bank), MUFG Bank, TheLtd. (formerly known as the Bank of Tokyo-Mitsubishi UFJ, Ltd.) and The Toronto-Dominion Bank (incorporated by reference to Exhibit 10 of the United Rentals, Inc. and United Rentals (North America), New York Branch,Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)
10(b)
10(b)
Lender Joinder Agreement, dated as of September 29, 2017, among United Rentals, Inc., United Rentals (North America), Inc., United Rentals of Canada, Inc., United Rentals Financing Limited Partnership and certain other subsidiaries of United Rentals, Inc. and Bank of America, N.A., as agent and the lenders party thereto (incorporated by reference to Exhibit 10.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on September 29, 2017)
12*
Computation of Ratio of Earnings to Fixed Charges
31(a)*
31(b)*
32(a)**
32(b)**

101101.INSThe following materials fromXBRL Instance Document - the Quarterly Report on Form 10-Q for United Rentals, Inc. and United Rentals (North America), Inc., forinstance document does not appear in the quarter ended September 30, 2017 filed on October 18, 2017, formatted inInteractive Data File because its XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes totags are embedded within the Unaudited Condensed Consolidated Financial Statements.Inline XBRL document

*101.SCHFiled herewith.XBRL Taxonomy Extension Schema Document
**101.CALFurnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act.XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document


* Filed herewith.

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

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
UNITED RENTALS, INC.
Dated:July 29, 2020UNITED RENTALS, INC.
By:
Dated:October 18, 2017By:
/S/ JESSICA T. GRAZIANO        ANDREW B. LIMOGES
Jessica T. Graziano
Senior Andrew B. Limoges
Vice President, Controller and Principal Accounting Officer
UNITED RENTALS (NORTH AMERICA), INC.
Dated:October 18, 2017July 29, 2020By:
/S/ JESSICA T. GRAZIANOANDREW B. LIMOGES
Jessica T. Graziano
Senior Andrew B. Limoges
Vice President, Controller and Principal Accounting Officer


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