COVID-19[feminine]

As discussed in note 1 to our condensed consolidated financial statements, the
COVID-19 pandemic has significantly disrupted supply chains and businesses
around the world. Uncertainty remains regarding the ongoing impact of existing
and emerging variant strains of COVID-19 on the operations and financial
position of United Rentals, and on the global economy. Uncertainty also remains
regarding the length of time it will take for the COVID-19 pandemic to
ultimately subside or become viewed as endemic, which will be impacted by the
effectiveness of vaccines against COVID-19 (including against emerging variant
strains), and by measures that may in the future be implemented to protect
public health.

We began to experience a decline in revenues in March 2020, which is when the
World Health Organization characterized COVID-19 as a pandemic and when our
rental volume first declined in response to shelter-in-place orders and other
market restrictions. The volume declines were more pronounced in 2020 than 2021,
and we have seen continuing evidence of recovery across our construction and
industrial markets, as well as encouraging gains in end-market indicators, as
reflected in our 2022 forecast and performance through June 30, 2022. In early
March 2020, we initiated contingency planning ahead of the impact of COVID-19 on
our end-markets.

Our COVID-19 response plan is focused on five work-streams: 1) ensuring the
safety and well-being of our employees and customers, 2) leveraging our
competitive advantages to support the needs of customers, 3) aggressively
managing capital expenditures, 4) controlling core operating expenses and 5)
proactively managing the balance sheet with a focus on liquidity. We believe
that this response plan has helped mitigate the impact of COVID-19 on our
results. Our previously filed Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q include additional detailed COVID-19 disclosures. The most detailed
disclosures addressing COVID-19 are in the filings for 2021 and 2020, when
COVID-19 had the most pronounced impact on our business. The impact of COVID-19
on our business is discussed throughout this "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Executive Overview

We are the largest equipment rental company in the world, with an integrated
network of 1,390 rental locations. We primarily operate in the United States and
Canada, and have a limited presence in Europe, Australia and New Zealand.
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 $16.6 billion, and a North American branch
network that operates in 49 U.S. states and every Canadian province, and serves
99 of the 100 largest metropolitan areas in the U.S. 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 4,400 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 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 88 percent of total revenues for
the six months ended June 30, 2022.

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.

We are continuing to manage the impact of COVID-19, which is discussed above.
Our general strategy focuses on profitability and return on invested capital,
and, in particular, calls for:

•A consistently superior standard of service to customers, often provided
through a single lead contact who can coordinate the cross-selling of 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
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are aligned with these objectives to identify trends in equipment categories and define action plans likely to generate better returns;

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

•The continued expansion of our specialty footprint, as well as our tools and
onsite services offerings, and the cross-selling of these services throughout
our network. We believe that the expansion of our specialty business, as
exhibited by our acquisition of General Finance discussed in note 3 to the
condensed consolidated financial statements, as well as our tools 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. Strategic acquisitions allow us to invest our capital to expand
our business, further driving our ability to accomplish our strategic goals.

Financial overview

Prior to taking actions pertaining to our financial flexibility and liquidity,
we assess 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 2022, we have taken the following actions to improve our financial
flexibility and liquidity, and to position us to invest the necessary capital in
our business:

• Redeemed $500 the principal amount of our 5 1/2% senior notes due 2027;

•Amended and extended our accounts receivable securitization facility, including
an increase in the size of the facility from $900 to $1.1 billion. The facility
expires in June 2024 and may be extended on a 364-day basis by mutual agreement
with the purchasers under the facility;

•Amended and extended our ABL facility, including an increase in the size of the
facility from $3.75 billion to $4.25 billion. The facility expires in June 2027;
and

• We have entered into a non-committal repurchase facility under which we can obtain short-term financing in an amount of up to $100. See Note 6 to the condensed consolidated financial statements for further details.

From June 30, 2022we had cash $2.830 billionconsisting of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.

Net revenue. Net earnings and diluted earnings per share are presented below.

                                   Three Months Ended              Six Months Ended
                                        June 30,                       June 30,
                                    2022             2021          2022          2021
Net income                   $      493            $  293      $      860      $  496
Diluted earnings per share   $     6.90            $ 4.02      $    11.93      $ 6.82

Net earnings and diluted earnings per share include the after-tax impacts of the items below. The tax rates applied to the items below reflect the legal rates in the entities concerned.

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                                                                             Three Months Ended June 30,                                                                                   Six Months Ended June 30,
                                                            2022                                                 2021                                                    2022                                                   2021
Tax rate applied to items below                         25.3  %                                             25.4      %                                            25.3  %                                                 25.3      %
                                                                        Impact on                                                Impact on                                             Impact on                                                Impact on
                                              Contribution               diluted                                                  diluted                Contribution                   diluted                                                  diluted
                                             to net income              earnings                  Contribution                   earnings               to net income                   earnings                 Contribution  
                earnings
                                              (after-tax)               per share           to net income (after-tax)            per share               (after-tax)                   per share           to net income (after-tax)            per share
Merger related costs (1)                 $                 -          $        -          $                   (2)             $      (0.03)         $                 -               $       -          $                   (2)             $      (0.03)
Merger related intangible asset
amortization (2)                                         (32)              (0.45)                            (34)                    (0.48)                         (69)                  (0.96)                            (70)                    (0.97)
Impact on depreciation related to
acquired fleet and property and
equipment (3)                                            (19)              (0.26)                             (1)                    (0.01)                         (26)                  (0.36)                             (2)                    (0.03)
Impact of the fair value mark-up of
acquired fleet (4)                                        (3)              (0.05)                             (6)                    (0.08)                          (8)                  (0.12)                            (15)                    (0.20)

Restructuring charge (5)                                   -                   -                               -                         -                            -                   (0.01)                             (1)                    (0.01)
Asset impairment charge (6)                               (2)              (0.02)                             (3)                    (0.04)                          (2)                  (0.02)                             (3)                    (0.04)
Loss on repurchase/redemption of debt
securities (7)                                           (13)              (0.18)                              -                         -                          (13)                  (0.18)                              -                         -



(1)This reflects transaction costs associated with the General Finance
acquisition discussed above. Merger related costs only include costs associated
with major acquisitions completed since 2012 that significantly impact our
operations (the "major acquisitions," each of which had annual revenues of over
$200 prior to acquisition). 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 major
acquisitions.
(3)This reflects the impact of extending the useful lives of equipment acquired
in certain major acquisitions, net of the impact of additional depreciation
associated with the fair value mark-up of such equipment.
(4)This reflects additional costs recorded in cost of rental equipment sales
associated with the fair value mark-up of rental equipment acquired in certain
major acquisitions that was subsequently sold.
(5)This primarily reflects severance and branch closure charges associated with
our restructuring programs. For additional information, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Results
of Operations-Other costs/(income)-restructuring charges" below.
(6)This reflects write-offs of leasehold improvements and other fixed assets.
(7)This primarily reflects the difference between the net carrying amount and
the total purchase price of the redeemed notes. For additional information, see
"Results of Operations-Other costs/(income)-Interest expense, net" below.

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 charges, stock compensation
expense, net and the impact of the fair value mark-up of the acquired 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 net income and adjusted EBITDA margins represent net
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.
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The table below provides a reconciliation between net income and EBITDA and
adjusted EBITDA:
                                                                 Three Months Ended                  Six Months Ended
                                                                      June 30,                           June 30,
                                                                2022              2021             2022             2021
Net income                                                 $      493           $  293          $   860          $   496
Provision for income taxes                                        115               84              231              156
Interest expense, net                                             113              100              207              199

Depreciation of rental equipment                                  457              385              892              760
Non-rental depreciation and amortization                           91               90              188              181
EBITDA                                                     $    1,269           $  952          $ 2,378          $ 1,792
Merger related costs (1)                                            -                3                -                3
Restructuring charge (2)                                            1                -                1                1
Stock compensation expense, net (3)                                36               35               60               56
Impact of the fair value mark-up of acquired fleet (4)              5                9               11               20

Adjusted EBITDA                                            $    1,311           $  999          $ 2,450          $ 1,872
Net income margin                                                17.8   %         12.8  %          16.2  %          11.4  %
Adjusted EBITDA margin                                           47.3   %         43.7  %          46.3  %          43.1  %


The table below presents a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA:

                                                                                        Six Months Ended
                                                                                            June 30,
                                                                                    2022                2021
Net cash provided by operating activities                                       $    2,040          $   1,934
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)                (6)
Gain on sales of rental equipment                                                      213                187
Gain on sales of non-rental equipment                                                    4                  4
Insurance proceeds from damaged equipment                                               17                 14
Merger related costs (1)                                                                 -                 (3)
Restructuring charge (2)                                                                (1)                (1)
Stock compensation expense, net (3)                                                    (60)               (56)
Loss on repurchase/redemption of debt securities (5)                                   (17)                 -

Changes in assets and liabilities                                                     (152)              (584)
Cash paid for interest                                                                 188                195
Cash paid for income taxes, net                                                        152                108
EBITDA                                                                          $    2,378          $   1,792
Add back:
Merger related costs (1)                                                                 -                  3
Restructuring charge (2)                                                                 1                  1
Stock compensation expense, net (3)                                                     60                 56
Impact of the fair value mark-up of acquired fleet (4)                                  11                 20

Adjusted EBITDA                                                                 $    2,450          $   1,872


 ___________________

(1) This reflects the transaction costs associated with the acquisition of General Finance mentioned above. Merger-related costs only include costs associated with major acquisitions. For more information, see “Results of Operations-Other Costs/(Revenue)-Merger-Related Costs” below.

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(2)This primarily reflects severance and branch closure charges associated with
our restructuring programs. For additional information, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Results
of Operations-Other costs/(income)-restructuring charges" below.

(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 certain
major acquisitions that was subsequently sold.

(5)This primarily reflects the difference between the net carrying amount and
the total purchase price of the redeemed notes. For additional information, see
"Results of Operations-Other costs/(income)-Interest expense, net" below.

For the three months ended June 30, 2022, net income increased $200, or 68.3
percent, and net income margin increased 500 basis points to 17.8 percent. For
the three months ended June 30, 2022, adjusted EBITDA increased $312, or 31.2
percent, and adjusted EBITDA margin increased 360 basis points to 47.3 percent.

The year-over-year increase in net income margin primarily reflects improved
gross margins from equipment rentals and sales of rental equipment, reductions
in selling, general and administrative ("SG&A") expense and non-rental
depreciation and amortization as a percentage of revenue and lower net interest
expense, excluding debt redemption losses, partially offset by higher income tax
expense as a percentage of revenue and debt redemption losses of $17 recognized
in the three months ended June 30, 2022. The increased gross margin from sales
of rental equipment sales primarily reflected improved pricing. The higher gross
margin from equipment rentals and the favorable margin impact of SG&A expense
and non-rental depreciation and amortization all reflected better fixed cost
absorption on higher revenue. Net interest expense, excluding debt redemption
losses, decreased primarily due to a reduction in the average cost of debt.
While income tax expense increased $31, or 36.9 percent, year-over-year, the
effective income tax rate decreased by 340 basis points to 18.9 percent
primarily due to aligning the legal entity structure in Australia and New
Zealand with our other foreign operations, which resulted in a tax depreciation
benefit of $39 in the three months ended June 30, 2022.

The increase in the adjusted EBITDA margin primarily reflects higher margins
from equipment rentals (excluding depreciation) and sales of rental equipment,
reduced SG&A expense as a percentage of revenue and an increase in the
proportion of revenue from higher margin (excluding depreciation) equipment
rentals. Gross margin from equipment rentals (excluding depreciation) increased
110 basis points primarily due to better fixed cost absorption on higher
revenue. SG&A expense also benefited from better fixed cost absorption. 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)
increased 14.3 percentage points primarily due to improved pricing.

For the six months ended June 30, 2022net income increased $364, or 73.4%, and the net profit margin increased by 480 basis points to 16.2%. For the six months ended June 30, 2022adjusted EBITDA increased $578or 30.9%, and the adjusted EBITDA margin increased by 320 basis points to 46.3%.

The year-over-year increase in net income margin primarily reflects improved
gross margins from equipment rentals and sales of rental equipment, reduced
non-rental depreciation and amortization as a percentage of revenue and lower
net interest expense, excluding debt redemption losses, partially offset by
higher income tax expense as a percentage of revenue and debt redemption losses
of $17 recognized in the six months ended June 30, 2022. Gross margin from sales
of rental equipment increased year-over-year primarily due to improved pricing.
The higher gross margin from equipment rentals and the favorable margin impact
of non-rental depreciation and amortization both reflected better fixed cost
absorption on higher revenue. Net interest expense, excluding debt redemption
losses, decreased year-over-year primarily due to a reduction in the average
cost of debt. While income tax expense increased $75, or 48.1 percent,
year-over-year, the effective income tax rate decreased by 270 basis points,
primarily due to realigning the legal entity structure in Australia and New
Zealand as discussed above.

The increase in the adjusted EBITDA margin primarily reflects higher margins
from equipment rentals (excluding depreciation) and sales of rental equipment,
and an increase in the proportion of revenue from higher margin (excluding
depreciation) equipment rental. Gross margin from equipment rentals (excluding
depreciation) increased 120 basis points primarily due to better fixed cost
absorption on higher revenue. 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) increased 14.8 percentage points primarily
due to improved pricing.

Revenues are noted 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.
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The table below includes the components of the year-over-year change in rental revenue using the fleet productivity methodology.

                                                              Three Months Ended June 30,                                  Six Months Ended June 30,
                                                       2022                2021              Change                2022                2021             Change
Equipment rentals*                               $       2,462          $ 1,951                 26.2  %       $      4,637          $ 3,618                28.2  %
Sales of rental equipment                                  164              194                (15.5) %                375              461               (18.7) %
Sales of new equipment                                      38               57                (33.3) %                 83              106               (21.7) %
Contractor supplies sales                                   33               27                 22.2  %                 62               51                21.6  %
Service and other revenues                                  74               58                 27.6  %                138              108                27.8  %
Total revenues                                   $       2,771          $ 2,287                 21.2  %       $      5,295          $ 4,344                21.9  %
*Equipment rentals variance components:
Year-over-year change in average OEC                                                            13.6  %                                                    15.0  %
Assumed year-over-year inflation impact (1)                                                     (1.5) %                                                    (1.5) %
Fleet productivity (2)                                                                          11.3  %                                                    12.0  %
Contribution from ancillary and re-rent revenue
(3)                                                                                              2.8  %                                                     2.7  %
Total change in equipment rentals                                                               26.2  %                                                    28.2  %


 ___________________

(1) Reflects the estimated impact of inflation on fleet revenue productivity on an OEC basis, 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 the evolution of other types of equipment rental income (see note 2 for more details), excluding own equipment rental income.

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 and other miscellaneous costs and
services. 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, 2022, total revenues of $2.771 billion
increased 21.2 percent compared with 2021. Equipment rentals and sales of rental
equipment are our largest revenue types (together, they accounted for 95 percent
of total revenue for the three months ended June 30, 2022). Equipment rentals
increased $511, or 26.2 percent, primarily due to a 13.6 percent increase in
average OEC and an 11.3 percent increase in fleet productivity, both of which
include the more pronounced impact of COVID-19 during the three months ended
June 30, 2021. Beginning in 2021 and continuing through June 30, 2022, we have
seen evidence of a continuing recovery of activity across our end-markets. As
discussed above, disciplined management of capital expenditures and fleet
capacity is a component of our COVID-19 response plan, which contributed to
rental capital expenditures in 2020 that were significantly below historic
levels. While capital expenditures were significantly reduced in 2020 due to
COVID-19, capital expenditures in 2021 exceeded historic (pre-COVID-19) levels,
which contributed to the increased average OEC. Capital expenditures for the six
months ended June 30, 2022 have exceeded the expenditures in the same period in
2021, and full year 2022 capital expenditures are expected to approximate the
expenditures in 2021. Sales of rental equipment decreased 15.5 percent
year-over-year as we held on to fleet to serve strong customer demand and to
ensure greater fleet availability in the event industry supply chain challenges
persist or worsen. While sales of rental equipment decreased year-over-year,
pricing remained strong, as reflected in the 15.8 percentage point increase in
gross margin from sales of rental equipment.

For the six months ended June 30, 2022, total revenues of $5.295 billion
increased 21.9 percent compared with 2021. Equipment rentals and sales of rental
equipment are our largest revenue types (together, they accounted for 95 percent
of total

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revenue for the six months ended June 30, 2022). Equipment rentals increased
$1.019 billion, or 28.2 percent, primarily due to a 15.0 percent increase in
average OEC and a 12.0 percent increase in fleet productivity, both of which
include the more pronounced impact of COVID-19 during the six months ended
June 30, 2021. Beginning in 2021 and continuing through June 30, 2022, we have
seen evidence of a continuing recovery of activity across our end-markets. The
increase in average OEC includes the impact of the acquisition of General
Finance that is discussed in note 3 to the condensed consolidated financial
statements, as well as increased capital expenditures. As discussed above,
disciplined management of capital expenditures and fleet capacity is a component
of our COVID-19 response plan, which contributed to rental capital expenditures
in 2020 that were significantly below historic levels. While capital
expenditures were significantly reduced in 2020 due to COVID-19, capital
expenditures in 2021 exceeded historic (pre-COVID-19) levels, which contributed
to the increased average OEC. Capital expenditures for the six months ended
June 30, 2022 have exceeded the expenditures in the same period in 2021, and
full year 2022 capital expenditures are expected to approximate the expenditures
in 2021. Sales of rental equipment decreased 18.7 percent year-over-year as we
held on to fleet to serve strong customer demand and to ensure greater fleet
availability in the event industry supply chain challenges persist or worsen.
While sales of rental equipment decreased year-over-year, pricing remained
strong, as reflected in the 16.2 percentage point increase in gross margin from
sales of rental equipment.


Operating results

As discussed in note 4 to our condensed consolidated financial statements, our
reportable segments are general rentals and specialty. 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. This segment
operates throughout the United States and Canada. The specialty segment includes
the rental of specialty construction products such as i) trench safety
equipment, such as trench shields, aluminum hydraulic shoring systems, slide
rails, crossing plates, construction lasers and line testing equipment for
underground work, ii) power and HVAC equipment, such as portable diesel
generators, electrical distribution equipment, and temperature control
equipment, iii) fluid solutions equipment primarily used for fluid containment,
transfer and treatment, and iv) mobile storage equipment and modular office
space. The specialty segment's customers include construction companies involved
in infrastructure projects, municipalities and industrial companies. This
segment primarily operates in the United States and Canada, and has a limited
presence in Europe, Australia and New Zealand.

As discussed in note 4 to our condensed consolidated financial statements, we
aggregate our four geographic divisions-Central, Northeast, Southeast and
West-into our general rentals reporting segment. Historically, there have
occasionally been variances in the levels of equipment rentals gross margins
achieved by these divisions, though such variances have generally been small
(close to or less than 10 percent, measured versus the equipment rentals gross
margins of the aggregated general rentals' divisions). For the five year period
ended June 30, 2022, there was no general rentals' division with an equipment
rentals gross margin that differed materially from the equipment rentals gross
margin of the aggregated general rentals' divisions. The rental industry is
cyclical, and there historically have occasionally been divisions with equipment
rentals gross margins that varied by greater than 10 percent from the equipment
rentals gross margins of the aggregated general rentals' divisions, though the
specific divisions with margin variances of over 10 percent have fluctuated, and
such variances have generally not exceeded 10 percent by a significant amount.
We monitor the margin variances and confirm margin similarity between divisions
on a quarterly basis.

We believe that the divisions that are aggregated into our segments have similar
economic characteristics, as each division 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 divisions
also reflects the management structure that we use for making operating
decisions and assessing performance. Although we believe aggregating these
divisions 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 divisions into separate
reporting segments. Any such disaggregation would have no impact on our
consolidated results of operations.

These reporting 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      Specialty        Total
Three Months Ended June 30, 2022
Equipment rentals                   $ 1,787      $      675      $ 2,462
Sales of rental equipment               138              26          164
Sales of new equipment                   17              21           38
Contractor supplies sales                22              11           33
Service and other revenues               63              11           74
Total revenue                       $ 2,027      $      744      $ 2,771
Three Months Ended June 30, 2021
Equipment rentals                   $ 1,466      $      485      $ 1,951
Sales of rental equipment               166              28          194
Sales of new equipment                   38              19           57
Contractor supplies sales                18               9           27
Service and other revenues               50               8           58
Total revenue                       $ 1,738      $      549      $ 2,287
Six Months Ended June 30, 2022
Equipment rentals                   $ 3,380      $    1,257      $ 4,637
Sales of rental equipment               322              53          375
Sales of new equipment                   46              37           83
Contractor supplies sales                40              22           62
Service and other revenues              121              17          138
Total revenue                       $ 3,909      $    1,386      $ 5,295
Six Months Ended June 30, 2021
Equipment rentals                   $ 2,739      $      879      $ 3,618
Sales of rental equipment               413              48          461
Sales of new equipment                   80              26          106
Contractor supplies sales                34              17           51
Service and other revenues               94              14          108
Total revenue                       $ 3,360      $      984      $ 4,344


Equipment rentals. For the three months ended June 30, 2022, equipment rentals
of $2.462 billion increased $511, or 26.2 percent, as compared to the same
period in 2021, primarily due to a 13.6 percent increase in average OEC and an
11.3 percent increase in fleet productivity, both of which include the more
pronounced impact of COVID-19 during the three months ended June 30, 2021.
Beginning in 2021 and continuing through June 30, 2022, we have seen evidence of
a continuing recovery of activity across our end-markets. As discussed above,
disciplined management of capital expenditures and fleet capacity is a component
of our COVID-19 response plan, which contributed to rental capital expenditures
in 2020 that were significantly below historic levels. While capital
expenditures were significantly reduced in 2020 due to COVID-19, capital
expenditures in 2021 exceeded historic (pre-COVID-19) levels, which contributed
to the increased average OEC. Capital expenditures for the six months ended
June 30, 2022 have exceeded the expenditures in the same period in 2021, and
full year 2022 capital expenditures are expected to approximate the expenditures
in 2021. Equipment rentals represented 89 percent of total revenues for the
three months ended June 30, 2022.

For the six months ended June 30, 2022, equipment rentals of $4.637 billion
increased $1.019 billion, or 28.2 percent, as compared to the same period in
2021, primarily due to a 15.0 percent increase in average OEC and a 12.0 percent
increase in fleet productivity, both of which include the more pronounced impact
of COVID-19 during the six months ended June 30, 2021. Beginning in 2021 and
continuing through June 30, 2022, we have seen evidence of a continuing recovery
of activity across our end-markets. The increase in average OEC includes the
impact of the acquisition of General Finance that is discussed in note 3 to the
condensed consolidated financial statements, as well as increased capital
expenditures. As discussed above, disciplined management of capital expenditures
and fleet capacity is a component of our COVID-19 response plan, which
contributed to rental capital expenditures in 2020 that were significantly below
historic levels. While capital expenditures were significantly reduced in 2020
due to COVID-19, capital expenditures in 2021 exceeded historic (pre-COVID-19)
levels,

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which contributed to the increased average OEC. Capital expenditures for the six
months ended June 30, 2022 have exceeded the expenditures in the same period in
2021, and full year 2022 capital expenditures are expected to approximate the
expenditures in 2021. Equipment rentals represented 88 percent of total revenues
for the six months ended June 30, 2022.

For the three months ended June 30, 2022, general rentals equipment rentals
increased $321, or 21.9 percent, as compared to the same period in 2021,
primarily due to the continuing recovery of activity across our end-markets and
increased average OEC. As noted above, the impact of COVID-19 was more
pronounced in 2021 and the broad recovery we saw as 2021 progressed has
continued through June 30, 2022. As discussed above, capital expenditures were
significantly reduced in 2020 due to COVID-19 and then increased in 2021, which
contributed to the year-over-year increase in average OEC. For the three months
ended June 30, 2022, equipment rentals represented 88 percent of total revenues
for the general rentals segment.

For the six months ended June 30, 2022, general rentals equipment rentals
increased $641, or 23.4 percent, as compared to the same period in 2021,
primarily due to the continuing recovery of activity across our end-markets and
increased average OEC. As noted above, the impact of COVID-19 was more
pronounced in 2021 and the broad recovery we saw as 2021 progressed has
continued through June 30, 2022. As discussed above, capital expenditures were
significantly reduced in 2020 due to COVID-19 and then increased in 2021, which
contributed to the year-over-year increase in average OEC. For the six months
ended June 30, 2022, equipment rentals represented 86 percent of total revenues
for the general rentals segment.

For the three months ended June 30, 2022, specialty equipment rentals increased
$190, or 39.2 percent, as compared to the same period in 2021, including the
impact of the General Finance acquisition. On a pro forma basis including the
standalone, pre-acquisition revenues of General Finance, equipment rentals
increased 29 percent. The increase in equipment rentals reflects the continuing
recovery of activity across our end-markets, as well as increased average OEC,
both of which are discussed above. For the three months ended June 30, 2022,
equipment rentals represented 91 percent of total revenues for the specialty
segment.

For the six months ended June 30, 2022, specialty equipment rentals increased
$378, or 43.0 percent, as compared to the same period in 2021, including the
impact of the General Finance acquisition. On a pro forma basis including the
standalone, pre-acquisition revenues of General Finance, equipment rentals
increased 29 percent. The increase in equipment rentals reflects the continuing
recovery of activity across our end-markets, as well as increased average OEC,
both of which are discussed above. For the six months ended June 30, 2022,
equipment rentals represented 91 percent of total revenues for the specialty
segment.

Sales of rental equipment. For the six months ended June 30, 2022, sales of
rental equipment represented approximately 7 percent of our total revenues. For
the three and six months ended June 30, 2022, sales of rental equipment
decreased 15.5 percent and 18.7 percent year-over-year, respectively, as we held
on to fleet to serve strong customer demand and to ensure greater fleet
availability in the event industry supply chain challenges persist or worsen.
While sales of rental equipment decreased year-over-year, pricing remained
strong, as reflected in the increases in gross margin from sales of rental
equipment of 15.8 percentage points and 16.2 percentage points for the three and
six months ended June 30, 2022, respectively.

Sales of new equipment. For the six months ended June 30, 2022, sales of new
equipment represented approximately 2 percent of our total revenues. For the
three and six months ended June 30, 2022, sales of new equipment decreased 33.3
percent and 21.7 percent year-over-year, respectively, primarily due to supply
chain constraints.

The contractor provides the sales. Sales of contractor supplies represent our revenue associated with the sale of a variety of supplies, including construction consumables, tools, small equipment and safety supplies. For the six months ended June 30, 2022, sales of contractor supplies accounted for approximately 1% of our total revenue. For the three and six months ended June 30, 2022sales of contractor supplies were up slightly year-over-year.

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 six months ended June 30, 2022, service
and other revenues represented approximately 3 percent of our total revenues.
For the three and six months ended June 30, 2022, service and other revenues
increased 27.6 percent and 27.8 percent year-over-year, respectively, primarily
due to growth initiatives.

Equipment rental segment gross profit

Gross profit and gross margin for the Equipment Rental segment were as follows:

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                                     General
                                     rentals       Specialty       Total
Three Months Ended June 30, 2022
Equipment Rentals Gross Profit      $   691       $    312       $ 1,003
Equipment Rentals Gross Margin         38.7  %        46.2  %       40.7  %
Three Months Ended June 30, 2021
Equipment Rentals Gross Profit      $   526       $    225       $   751
Equipment Rentals Gross Margin         35.9  %        46.4  %       38.5  %
Six Months Ended June 30, 2022
Equipment Rentals Gross Profit      $ 1,266       $    571       $ 1,837
Equipment Rentals Gross Margin         37.5  %        45.4  %       39.6  %
Six Months Ended June 30, 2021
Equipment Rentals Gross Profit      $   937       $    391       $ 1,328
Equipment Rentals Gross Margin         34.2  %        44.5  %       36.7  %


General rentals. For the three months ended June 30, 2022, equipment rentals
gross profit increased by $165, and equipment rentals gross margin increased 280
basis points, from 2021, primarily due to better fixed cost absorption on higher
revenue. As discussed above, equipment rental revenue increased 21.9 percent
from 2021, primarily due to increased average OEC and the continuing recovery of
activity across our end-markets.

For the six months ended June 30, 2022, equipment rentals gross profit increased
by $329, and equipment rentals gross margin increased 330 basis points, from
2021, primarily due to better fixed cost absorption on higher revenue. As
discussed above, equipment rental revenue increased 23.4 percent from 2021,
primarily due to increased average OEC and the continuing recovery of activity
across our end-markets.

Specialty. For the three months ended June 30, 2022, equipment rentals gross
profit increased by $87, and equipment rentals gross margin decreased by 20
basis points, from 2021. Gross margin decreased primarily due to a 2022
depreciation adjustment associated with the finalization of purchase accounting
for the General Finance acquisition, which included a one-time impact of $10,
and a higher proportion of revenue from certain lower margin ancillary fees in
2022, partially offset by better fixed cost absorption on higher revenue. As
discussed above, equipment rental revenue increased 39.2 percent from 2021,
including the impact of the General Finance acquisition, primarily due to
increased average OEC and the continuing recovery of activity across our
end-markets.

For the six months ended June 30, 2022, equipment rentals gross profit increased
by $180, and equipment rentals gross margin increased by 90 basis points, from
2021. Gross margin increased primarily due to better fixed cost absorption on
higher revenue, partially offset by a higher proportion of revenue from certain
lower margin ancillary fees in 2022 and the 2022 depreciation adjustment
associated with the finalization of purchase accounting for the General Finance
acquisition discussed above. As discussed above, equipment rental revenue
increased 43.0 percent from 2021, including the impact of the General Finance
acquisition, primarily due to increased average OEC and the continuing recovery
of activity across our end-markets.

Gross margin. Gross margins by revenue category were as follows:

                                                 Three Months Ended June 30,                                      Six Months Ended June 30,
                                        2022                2021                Change                2022                  2021                 Change
Total gross margin                        41.5  %             38.3  %           320 bps              40.5%                 36.6%                 390 bps
Equipment rentals                         40.7  %             38.5  %           220 bps              39.6%                 36.7%                 290 bps
Sales of rental equipment                 59.1  %             43.3  %          1,580 bps             56.8%                 40.6%                1,620 bps
Sales of new equipment                    18.4  %             15.8  %           260 bps              18.1%                 15.1%                 300 bps
Contractor supplies sales                 30.3  %             29.6  %           70 bps               30.6%                 29.4%                 120 

basis points

Service and other revenues                44.6  %             39.7  %           490 bps              42.0%                 39.8%                 220 

basis points


For the three months ended June 30, 2022, total gross margin increased 320 basis
points from the same period in 2021. Equipment rentals gross margin increased
220 basis points from 2021, primarily due to better fixed cost absorption on
higher revenue. As discussed above, equipment rentals increased 26.2 percent
from 2021, primarily due to increased average OEC and the continuing recovery of
activity across our end-markets. Gross margin from sales of rental equipment
increased 15.8 percentage points from the same period in 2021 primarily due to
improved pricing. The gross margin fluctuations from sales of

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new equipment, contractor supplies sales and service and other revenues
generally reflect normal variability, 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 three months ended
June 30, 2022).

For the six months ended June 30, 2022, total gross margin increased 390 basis
points from the same period in 2021. Equipment rentals gross margin increased
290 basis points from 2021, primarily due to better fixed cost absorption on
higher revenue. As discussed above, equipment rentals increased 28.2 percent
from 2021, primarily due to increased average OEC and the continuing recovery of
activity across our end-markets. Gross margin from sales of rental equipment
increased 16.2 percentage points from the same period in 2021 primarily due to
improved pricing. The gross margin fluctuations from sales of new equipment,
contractor supplies sales and service and other revenues generally reflect
normal variability, 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, 2022).

Other costs/(income)

The table below includes other costs/(income) from our Condensed Consolidated Statements of Income, together with related key metrics:

                                                   Three Months Ended June 30,                                          Six Months Ended June 30,
                                        2022                         2021            Change                 2022                        2021           Change
Selling, general and
administrative ("SG&A") expense         $343                         $301            14.0%                  $666                        $551            

20.9%

SG&A expense as a percentage of
revenue                                12.4%                        13.2%           (80) bps                12.6%                       12.7%         (10) bps
Merger related costs                     -                            3             (100.0)%                  -                           3           (100.0)%
Restructuring charge                     1                            -                -%                     1                           1              -%
Non-rental depreciation and
amortization                             91                           90              1.1%                   188                         181            3.9%
Interest expense, net                   113                          100             13.0%                   207                         199            4.0%
Other (income) expense, net             (6)                           4             (250.0)%                (11)                          2           (650.0)%
Provision for income taxes              115                           84             36.9%                   231                         156            48.1%
Effective tax rate                     18.9%                        22.3%          (340) bps                21.2%                       23.9%         (270) 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. SG&A expense as a percentage of revenue
for the three months ended June 30, 2022 decreased from the same period in 2021
primarily due to better fixed cost absorption on higher revenue. SG&A expense as
a percentage of revenue for the six months ended June 30, 2022 did not change
materially from the same period in 2021, as the impact of better fixed cost
absorption on higher revenue was offset by increases in certain discretionary
expenses, including travel and entertainment. Certain discretionary expenses
were reduced significantly in 2020 and early 2021 due to COVID-19, and have
increased more recently as rental volume has increased (as noted above, the
broad recovery we saw across our end-markets as 2021 progressed has continued
through June 30, 2022).

The merger related costs reflect transaction costs associated with the General
Finance acquisition that was completed in May 2021, as discussed in note 3 to
the condensed consolidated financial statements. 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, each
of which had annual revenues of over $200 prior to acquisition, that
significantly impact our operations.

The restructuring charges primarily reflect severance and branch closure charges
associated with our restructuring programs. We incur severance costs and branch
closure charges in the ordinary course of our business. We only include such
costs that are part of a restructuring program as restructuring charges. Since
the first such program was initiated in 2008, we have completed six
restructuring programs and have incurred total restructuring charges of $353. As
of June 30, 2022, there were no open restructuring programs, and the total
liability associated with the closed restructuring programs was $8.

Non-rental depreciation and amortization includes i) the amortization of other
intangible assets and 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 trade names and
associated trademarks.
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Interest expense, net for the three and six months ended June 30, 2022 increased
13.0 percent and 4.0 percent year-over-year, respectively. Interest expense, net
for the three and six months ended June 30, 2022 included debt redemption losses
of $17, which primarily reflected the difference between the net carrying amount
and the total purchase price of the redeemed notes. Excluding the impact of
these losses, interest expense, net decreased by 4.0 percent and 4.5 percent
year-over-year for the three and six months ended June 30, 2022, respectively,
primarily due to decreases in the average cost of debt.

Other (income) expense, net primarily includes i) currency gains and losses, ii)
finance charges, iii) gains and losses on sales of non-rental equipment and iv)
other miscellaneous items.

The effective tax rates for 2022 and 2021 differed from the federal statutory
rate of 21 percent primarily due to the geographical mix of income between
foreign and domestic operations, the impact of state and local taxes, stock
compensation, other deductible and nondeductible charges, the release in 2021 of
a valuation allowance on state tax credits and a 2022 realignment of the legal
entity structure in Australia and New Zealand as discussed below. The
year-over-year decreases in the effective income tax rates for the three and six
months ended June 30, 2022 primarily reflect the impact of aligning the legal
entity structure in Australia and New Zealand with our other foreign operations,
which resulted in a tax depreciation benefit of $39 in the three and six months
ended June 30, 2022, partially offset by the release in 2021 of a valuation
allowance on state tax credits.

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 2021, and is not expected to impact our effective tax
rate in 2022. As of June 30, 2022, we had deferred employer payroll taxes of $27
under the CARES Act, all of which is due in 2022.

Balance sheet. Accounts payable increased by $249, or 30.5 percent, from
December 31, 2021 to June 30, 2022, primarily due to increased business
activity, which reflected seasonality and improved economic conditions. See the
condensed consolidated statements of cash flows for further information on
changes in cash and cash equivalents, the condensed consolidated statements of
stockholders' equity for further information on changes in stockholders' equity
and note 6 to the condensed consolidated financial statements for further
information on debt changes.


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Cash 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 the 2022 capital
structure actions taken to improve our financial flexibility and liquidity.

On January 25, 2022, our Board of Directors authorized a $1 billion share
repurchase program, which commenced in the first quarter of 2022. As of June 30,
2022, we have repurchased $762 of Holdings' common stock under this program,
which we intend to complete in the third quarter of 2022. Since 2012, we have
repurchased a total of $4.719 billion of Holdings' common stock under our share
repurchase programs (comprised of six programs that have ended and the current
program).

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 June 30, 2022,
we had cash and cash equivalents of $68. Cash equivalents at June 30, 2022
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 six
months ended June 30, 2022:

ABL installation:

      Borrowing capacity, net of letters of credit                   $ 

2,564

      Outstanding debt, net of debt issuance costs (1)                 

1,610

       Interest rate at June 30, 2022                                   

2.7%

Average debt principal outstanding at the end of the month (1) 1,036

Weighted average interest rate on average outstanding debt 2.1%

Maximum debt principal outstanding at the end of the month (1) 1,621

      Accounts receivable securitization facility:
      Borrowing capacity                                                 198
      Outstanding debt, net of debt issuance costs                       901
       Interest rate at June 30, 2022                                    2.2  %
      Average month-end principal amount of debt outstanding             887
      Weighted-average interest rate on average debt outstanding         1.4  %
      Maximum month-end principal amount of debt outstanding             902


 ___________________

(1)As discussed in note 6 to the condensed consolidated financial statements, in
May 2022, we redeemed $500 principal amount of our 5 1/2 percent Senior Notes,
using cash and borrowings under the ABL facility. The outstanding and maximum
amounts of debt under the ABL facility exceeded the average outstanding amount
primarily due to the use of borrowings under the ABL facility to fund the
partial redemption of the 5 1/2 percent Senior Notes.

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 July 25, 2022
were as follows:

                      Corporate Rating        Outlook
Moody's                     Ba1               Stable
Standard & Poor's           BB+               Stable


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.
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Loan Covenants and Compliance. As of June 30, 2022, we were in compliance with
the covenants and other provisions of the ABL, accounts receivable
securitization and term loan facilities and the senior notes. Any failure to be
in compliance with any material provision or covenant of these agreements could
have a material adverse effect on our liquidity and operations.

The only financial covenant that currently exists under the ABL facility is the
fixed charge coverage ratio. Subject to certain limited exceptions specified in
the ABL facility, the fixed charge coverage ratio covenant under the ABL
facility will only apply in the future if specified availability under the ABL
facility falls below 10 percent of the maximum revolver amount under the ABL
facility. When certain conditions are met, cash and cash equivalents and
borrowing base collateral in excess of the ABL facility size may be included
when calculating specified availability under the ABL facility. As of June 30,
2022, specified availability under the ABL facility exceeded the required
threshold and, as a result, this financial covenant was inapplicable. Under our
accounts receivable securitization facility, we are required, among other
things, to maintain certain financial tests relating to: (i) the default ratio,
(ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales
outstanding. The accounts receivable securitization facility also requires us to
comply with the fixed charge coverage ratio under the ABL facility, to the
extent the ratio is applicable under the ABL facility.

URNA’s ability to pay is limited under ABL’s covenants and term loan facilities and indentures governing its outstanding indebtedness. While this restricted ability limits our ability to transfer operating cash flow to Holdings, due to certain intercompany agreements, we do not expect any material adverse impact on Holdings’ ability to meet its cash obligations.

Sources and Uses of Cash. During the six months ended June 30, 2022, we
(i) generated cash from operating activities of $2.040 billion, (ii) generated
cash from the sale of rental and non-rental equipment of $384 and (iii) received
cash from debt proceeds, net of payments, of $106. We used cash during this
period principally to (i) purchase rental and non-rental equipment and
intangible assets of $1.477 billion, (ii) purchase other companies for $312 and
(iii) purchase shares of our common stock for $819. During the six months ended
June 30, 2021, we (i) generated cash from operating activities of $1.934
billion, (ii) generated cash from the sale of rental and non-rental equipment of
$475 and (iii) received cash from debt proceeds, net of payments, of $430. We
used cash during this period principally to (i) purchase rental and non-rental
equipment and intangible assets of $1.261 billion and (ii) purchase other
companies for $1.435 billion.

Free Cash Flow GAAP Reconciliation. We define "free cash flow" as net cash
provided by operating activities less purchases of, and plus proceeds from,
equipment and intangible assets. The equipment and intangible asset purchases
and proceeds are included in cash flows from 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.
                                                              Six Months Ended
                                                                  June 30,
                                                             2022          2021
Net cash provided by operating activities                 $   2,040      $ 

1,934

Purchases of rental equipment                                (1,354)      

(1,208)

Purchases of non-rental equipment and intangible assets (123)

(53)

Proceeds from sales of rental equipment                         375         

461

Proceeds from sales of non-rental equipment                       9         

14

Insurance proceeds from damaged equipment                        17           14

Free cash flow                                            $     964      $ 1,162


Free cash flow for the six months ended June 30, 2022 was $964, a decrease of
$198 as compared to $1.162 billion for the six months ended June 30, 2021. Free
cash flow decreased primarily due to increased net rental capital expenditures
(purchases of rental equipment less the proceeds from sales of rental equipment)
and increased purchases of non-rental equipment and intangible assets, partially
offset by increased net cash provided by operating activities. Net rental
capital expenditures increased $232 year-over-year.

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
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Support; (iv) acquisition-related services; (v) legal services; and (vi) support for human resources. In addition, Holdings leases certain equipment and real estate which is made available to URNA and its subsidiaries.

Information about URNA debt guarantors

URNA is 100 percent owned by Holdings and has certain outstanding indebtedness
that is guaranteed by both Holdings 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"), captive insurance subsidiary and
immaterial subsidiaries acquired in connection with the General Finance
acquisition, all of URNA's U.S. subsidiaries (the "guarantor subsidiaries").
Other than the guarantee by our Canadian subsidiary of URNA's indebtedness under
the ABL facility, none of URNA's indebtedness is guaranteed by URNA's foreign
subsidiaries, the SPV, captive insurance subsidiary or immaterial subsidiaries
acquired in connection with the General Finance acquisition (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 Holdings' other subsidiaries. Holdings consolidates each
of URNA and the guarantor subsidiaries in its consolidated financial statements.
URNA and the guarantor subsidiaries are all 100 percent-owned and controlled by
Holdings. Holdings' guarantees of URNA's indebtedness are full and
unconditional, except that the guarantees may be automatically released and
relieved upon satisfaction of the requirements for legal defeasance or covenant
defeasance under the applicable indenture being met. The Holdings 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 Holdings will not exceed the maximum amount that can be
guaranteed without making the guarantee void under fraudulent conveyance laws.

The guarantees of Holdings and the guarantor subsidiaries are made on a joint
and several basis. The guarantees of the guarantor subsidiaries are not full and
unconditional because a guarantor subsidiary can be automatically released and
relieved of its obligations under certain circumstances, including sale of the
guarantor subsidiary, the sale of all or substantially all of the guarantor
subsidiary's assets, the requirements for legal defeasance or covenant
defeasance under the applicable indenture being met, designating the guarantor
subsidiary as an unrestricted subsidiary for purposes of the applicable
covenants or the notes being rated investment grade by both Standard & Poor's
Ratings Services and Moody's Investors Service, Inc., or, in certain
circumstances, another rating agency selected by URNA. Like the Holdings
guarantees, the guarantees of the guarantor subsidiaries are 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.

All of the existing guarantees by Holdings and the guarantor subsidiaries rank
equally in right of payment with all of the guarantors' existing and future
senior indebtedness. The secured indebtedness of Holdings and the guarantor
subsidiaries (including guarantees of URNA's existing and future secured
indebtedness) will rank effectively senior to guarantees of any unsecured
indebtedness to the extent of the value of the assets securing such
indebtedness. Future guarantees of subordinated indebtedness will rank junior to
any existing and future senior indebtedness of the guarantors. The guarantees of
URNA's indebtedness are effectively junior to any indebtedness of our
subsidiaries that are not guarantors, including our foreign subsidiaries. As of
June 30, 2022, the indebtedness of our non-guarantors was comprised of (i) $901
of outstanding borrowings by the SPV in connection with the Company's accounts
receivable securitization facility, (ii) $143 of outstanding borrowings under
the ABL facility by non-guarantor subsidiaries and (iii) $10 of finance leases
of our non-guarantor subsidiaries.

Covenants in the ABL facility, accounts receivable securitization and term loan
facilities, and the other agreements governing our debt, impose operating and
financial restrictions on URNA, Holdings and the guarantor subsidiaries,
including limitations on the ability to make share repurchases and dividend
payments. As of June 30, 2022, the amount available for distribution under the
most restrictive of these covenants was $1.151 billion. The Company's total
available capacity for making share repurchases and dividend payments includes
the intercompany receivable balance of Holdings. As of June 30, 2022, 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 Holdings, was $5.382 billion.

Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we
believe that Holdings' guarantees of URNA indebtedness comply with the
conditions set forth in Rule 3-10, which enable us to present summarized
financial information for Holdings, URNA and the consolidated guarantor
subsidiaries in accordance with Rule 13-01 of Regulation S-X. The summarized
financial information excludes the financial information of the non-guarantor
subsidiaries. In accordance with Rule 3-10, separate financial statements of the
guarantor subsidiaries have not been presented. Our presentation below excludes
the investment in the non-guarantor subsidiaries and the related income from the
non-guarantor subsidiaries.

The summary financial information of Holdings, URNA and the Guarantor Subsidiaries on a combined basis is as follows:

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                                                                                June 30, 2022
Current receivable from non-guarantor subsidiaries                                   $20
Other current assets                                                                 310
Total current assets                                                                 330
Long-term receivable from non-guarantor subsidiaries                                 100
Other long-term assets                                                             16,908
Total long-term assets                                                             17,008
Total assets                                                                       17,338
Current liabilities                                                                 1,815
Long-term liabilities                                                              11,490
Total liabilities                                                                  13,305
                                                                              Six Months Ended
                                                                                June 30, 2022
Total revenues                                                                     $4,744
Gross profit                                                                        1,941
Net income                                                                           717




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Contents

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