x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware Delaware | 06-1522496 86-0933835 | |
(States of Incorporation) | (I.R.S. Employer Identification Nos.) | |
100 First Stamford Place, Suite 700 Stamford, Connecticut | 06902 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated Filer | x | Accelerated Filer | o | ||
Non-Accelerated Filer | o | Smaller Reporting Company | o | ||
Emerging Growth Company | o |
Page | ||
PART I | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
PART II | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 6 | ||
• | the possibility that companies that we have acquired or may acquire, including NES Rentals Holdings II, Inc. (“NES”), Neff Corporation ("Neff") and BakerCorp International Holdings, Inc. (“BakerCorp”), 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 $9.0 billion at June 30, 2018) requires us to use a substantial portion of our cash flow for debt service and can constrain our flexibility in responding to unanticipated or adverse business conditions; |
• | inability to refinance our indebtedness on terms that are favorable to us, or at all; |
• | incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness; |
• | noncompliance with financial or other covenants in our debt agreements, which could result in our lenders terminating the agreements and requiring us to repay outstanding borrowings; |
• | restrictive covenants and amount of borrowings permitted in our debt instruments, which can limit our financial and operational flexibility; |
• | overcapacity of fleet in the equipment rental industry; |
• | inability to benefit from government spending, including spending associated with infrastructure projects; |
• | fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated; |
• | rates we charge and time utilization we achieve being less than anticipated; |
• | inability to manage credit risk adequately or to collect on contracts with a large number of customers; |
• | inability to access the capital that our businesses or growth plans may require; |
• | incurrence of impairment charges; |
• | trends in oil and natural gas could adversely affect the demand for our services and products; |
• | the fact that our holding company structure requires us to depend in part on distributions from subsidiaries and such distributions could be limited by contractual or legal restrictions; |
• | increases in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves; |
• | incurrence of additional expenses (including indemnification obligations) and other costs in connection with litigation, regulatory and investigatory matters; |
• | the outcome or other potential consequences of regulatory matters and commercial litigation; |
• | shortfalls in our insurance coverage; |
• | our charter provisions as well as provisions of certain debt agreements and our significant indebtedness may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; |
• | turnover in our management team and inability to attract and retain key personnel; |
• | costs we incur being more than anticipated, and the inability to realize expected savings in the amounts or time frames planned; |
• | dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms; |
• | inability to sell our new or used fleet in the amounts, or at the prices, we expect; |
• | competition from existing and new competitors; |
• | risks related to security breaches, cybersecurity attacks 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; |
• | labor disputes, work stoppages or other labor difficulties, which may impact our productivity, and potential enactment of new legislation or other changes in law affecting our labor relations or operations generally; |
• | increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment; and |
• | the effect of changes in tax law, such as the effect of the Tax Cuts and Jobs Act that was enacted on December 22, 2017. |
Item 1. | Financial Statements |
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 117 | $ | 352 | |||
Accounts receivable, net of allowance for doubtful accounts of $65 at June 30, 2018 and $68 at December 31, 2017 | 1,203 | 1,233 | |||||
Inventory | 94 | 75 | |||||
Prepaid expenses and other assets | 92 | 112 | |||||
Total current assets | 1,506 | 1,772 | |||||
Rental equipment, net | 8,213 | 7,824 | |||||
Property and equipment, net | 480 | 467 | |||||
Goodwill | 4,096 | 4,082 | |||||
Other intangible assets, net | 798 | 875 | |||||
Other long-term assets | 15 | 10 | |||||
Total assets | $ | 15,108 | $ | 15,030 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Short-term debt and current maturities of long-term debt | $ | 900 | $ | 723 | |||
Accounts payable | 859 | 409 | |||||
Accrued expenses and other liabilities | 470 | 536 | |||||
Total current liabilities | 2,229 | 1,668 | |||||
Long-term debt | 8,086 | 8,717 | |||||
Deferred taxes | 1,509 | 1,419 | |||||
Other long-term liabilities | 120 | 120 | |||||
Total liabilities | 11,944 | 11,924 | |||||
Common stock—$0.01 par value, 500,000,000 shares authorized, 112,863,784 and 82,895,244 shares issued and outstanding, respectively, at June 30, 2018 and 112,394,395 and 84,463,662 shares issued and outstanding, respectively, at December 31, 2017 | 1 | 1 | |||||
Additional paid-in capital | 2,351 | 2,356 | |||||
Retained earnings | 3,458 | 3,005 | |||||
Treasury stock at cost—29,968,540 and 27,930,733 shares at June 30, 2018 and December 31, 2017, respectively | (2,450 | ) | (2,105 | ) | |||
Accumulated other comprehensive loss | (196 | ) | (151 | ) | |||
Total stockholders’ equity | 3,164 | 3,106 | |||||
Total liabilities and stockholders’ equity | $ | 15,108 | $ | 15,030 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Equipment rentals | $ | 1,631 | $ | 1,367 | $ | 3,090 | $ | 2,533 | |||||||
Sales of rental equipment | 157 | 133 | 338 | 239 | |||||||||||
Sales of new equipment | 44 | 47 | 86 | 86 | |||||||||||
Contractor supplies sales | 24 | 21 | 42 | 39 | |||||||||||
Service and other revenues | 35 | 29 | 69 | 56 | |||||||||||
Total revenues | 1,891 | 1,597 | 3,625 | 2,953 | |||||||||||
Cost of revenues: | |||||||||||||||
Cost of equipment rentals, excluding depreciation | 620 | 525 | 1,212 | 999 | |||||||||||
Depreciation of rental equipment | 323 | 266 | 645 | 514 | |||||||||||
Cost of rental equipment sales | 92 | 81 | 199 | 141 | |||||||||||
Cost of new equipment sales | 38 | 40 | 75 | 74 | |||||||||||
Cost of contractor supplies sales | 16 | 15 | 28 | 28 | |||||||||||
Cost of service and other revenues | 20 | 15 | 38 | 28 | |||||||||||
Total cost of revenues | 1,109 | 942 | 2,197 | 1,784 | |||||||||||
Gross profit | 782 | 655 | 1,428 | 1,169 | |||||||||||
Selling, general and administrative expenses | 239 | 218 | 471 | 411 | |||||||||||
Merger related costs | 2 | 14 | 3 | 16 | |||||||||||
Restructuring charge | 4 | 19 | 6 | 19 | |||||||||||
Non-rental depreciation and amortization | 67 | 64 | 138 | 126 | |||||||||||
Operating income | 470 | 340 | 810 | 597 | |||||||||||
Interest expense, net | 112 | 113 | 221 | 207 | |||||||||||
Other income, net | (1 | ) | (2 | ) | (2 | ) | — | ||||||||
Income before provision for income taxes | 359 | 229 | 591 | 390 | |||||||||||
Provision for income taxes | 89 | 88 | 138 | 140 | |||||||||||
Net income | $ | 270 | $ | 141 | $ | 453 | $ | 250 | |||||||
Basic earnings per share | $ | 3.22 | $ | 1.67 | $ | 5.40 | $ | 2.95 | |||||||
Diluted earnings per share | $ | 3.20 | $ | 1.65 | $ | 5.34 | $ | 2.92 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 270 | $ | 141 | $ | 453 | $ | 250 | |||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||
Foreign currency translation adjustments | (21 | ) | 25 | (46 | ) | 34 | |||||||||
Fixed price diesel swaps | 1 | — | 1 | (1 | ) | ||||||||||
Other comprehensive (loss) income | (20 | ) | 25 | (45 | ) | 33 | |||||||||
Comprehensive income (1) | $ | 250 | $ | 166 | $ | 408 | $ | 283 |
Common Stock | Treasury Stock | ||||||||||||||||||||||||
Number of Shares (1) | Amount | Additional Paid-in Capital | Retained Earnings | Number of Shares | Amount | Accumulated Other Comprehensive Loss (2) | |||||||||||||||||||
Balance at December 31, 2017 | 84 | $ | 1 | $ | 2,356 | $ | 3,005 | 28 | $ | (2,105 | ) | $ | (151 | ) | |||||||||||
Net income | 453 | ||||||||||||||||||||||||
Foreign currency translation adjustments | (46 | ) | |||||||||||||||||||||||
Fixed price diesel swaps | 1 | ||||||||||||||||||||||||
Stock compensation expense, net | 1 | 43 | |||||||||||||||||||||||
Exercise of common stock options | 2 | ||||||||||||||||||||||||
Shares repurchased and retired | (50 | ) | |||||||||||||||||||||||
Repurchase of common stock | (2 | ) | 2 | (345 | ) | ||||||||||||||||||||
Balance at June 30, 2018 | 83 | $ | 1 | $ | 2,351 | $ | 3,458 | 30 | $ | (2,450 | ) | $ | (196 | ) |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 453 | $ | 250 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 783 | 640 | |||||
Amortization of deferred financing costs and original issue discounts | 6 | 4 | |||||
Gain on sales of rental equipment | (139 | ) | (98 | ) | |||
Gain on sales of non-rental equipment | (3 | ) | (3 | ) | |||
Gain on insurance proceeds from damaged equipment | (14 | ) | (8 | ) | |||
Stock compensation expense, net | 43 | 40 | |||||
Merger related costs | 3 | 16 | |||||
Restructuring charge | 6 | 19 | |||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | — | 12 | |||||
Increase in deferred taxes | 93 | 40 | |||||
Changes in operating assets and liabilities, net of amounts acquired: | |||||||
Decrease (increase) in accounts receivable | 29 | (16 | ) | ||||
Increase in inventory | (19 | ) | (5 | ) | |||
Decrease (increase) in prepaid expenses and other assets | 25 | (7 | ) | ||||
Increase in accounts payable | 451 | 429 | |||||
(Decrease) increase in accrued expenses and other liabilities | (68 | ) | 16 | ||||
Net cash provided by operating activities | 1,649 | 1,329 | |||||
Cash Flows From Investing Activities: | |||||||
Purchases of rental equipment | (1,226 | ) | (913 | ) | |||
Purchases of non-rental equipment | (80 | ) | (55 | ) | |||
Proceeds from sales of rental equipment | 338 | 239 | |||||
Proceeds from sales of non-rental equipment | 8 | 6 | |||||
Insurance proceeds from damaged equipment | 14 | 8 | |||||
Purchases of other companies, net of cash acquired | (58 | ) | (965 | ) | |||
Purchases of investments | (1 | ) | (4 | ) | |||
Net cash used in investing activities | (1,005 | ) | (1,684 | ) | |||
Cash Flows From Financing Activities: | |||||||
Proceeds from debt | 4,330 | 3,943 | |||||
Payments of debt | (4,806 | ) | (3,543 | ) | |||
Proceeds from the exercise of common stock options | 2 | 1 | |||||
Common stock repurchased | (395 | ) | (24 | ) | |||
Payments of financing costs | (1 | ) | (7 | ) | |||
Net cash (used in) provided by financing activities | (870 | ) | 370 | ||||
Effect of foreign exchange rates | (9 | ) | 11 | ||||
Net (decrease) increase in cash and cash equivalents | (235 | ) | 26 | ||||
Cash and cash equivalents at beginning of period | 352 | 312 | |||||
Cash and cash equivalents at end of period | $ | 117 | $ | 338 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for income taxes, net | $ | 39 | $ | 59 | |||
Cash paid for interest | 213 | 177 |
Three Months Ended June 30, | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Topic 840 | Topic 606 | Total | Topic 840 | Topic 605 | Total | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Owned equipment rentals | $ | 1,406 | $ | — | $ | 1,406 | $ | 1,179 | $ | — | $ | 1,179 | |||||||||||
Re-rent revenue | 29 | — | 29 | 25 | — | 25 | |||||||||||||||||
Ancillary and other rental revenues: | |||||||||||||||||||||||
Delivery and pick-up | — | 112 | 112 | — | 96 | 96 | |||||||||||||||||
Other | 64 | 20 | 84 | 54 | 13 | 67 | |||||||||||||||||
Total ancillary and other rental revenues | 64 | 132 | 196 | 54 | 109 | 163 | |||||||||||||||||
Total equipment rentals | 1,499 | 132 | 1,631 | 1,258 | 109 | 1,367 | |||||||||||||||||
Sales of rental equipment | — | 157 | 157 | — | 133 | 133 | |||||||||||||||||
Sales of new equipment | — | 44 | 44 | — | 47 | 47 | |||||||||||||||||
Contractor supplies sales | — | 24 | 24 | — | 21 | 21 | |||||||||||||||||
Service and other revenues | — | 35 | 35 | — | 29 | 29 | |||||||||||||||||
Total revenues | $ | 1,499 | $ | 392 | $ | 1,891 | $ | 1,258 | $ | 339 | $ | 1,597 |
Six Months Ended June 30, | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Topic 840 | Topic 606 | Total | Topic 840 | Topic 605 | Total | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Owned equipment rentals | $ | 2,671 | $ | — | $ | 2,671 | $ | 2,188 | $ | — | $ | 2,188 | |||||||||||
Re-rent revenue | 54 | — | 54 | 46 | — | 46 | |||||||||||||||||
Ancillary and other rental revenues: | |||||||||||||||||||||||
Delivery and pick-up | — | 204 | 204 | — | 172 | 172 | |||||||||||||||||
Other | 120 | 41 | 161 | 99 | 28 | 127 | |||||||||||||||||
Total ancillary and other rental revenues | 120 | 245 | 365 | 99 | 200 | 299 | |||||||||||||||||
Total equipment rentals | 2,845 | 245 | 3,090 | 2,333 | 200 | 2,533 | |||||||||||||||||
Sales of rental equipment | — | 338 | 338 | — | 239 | 239 | |||||||||||||||||
Sales of new equipment | — | 86 | 86 | — | 86 | 86 | |||||||||||||||||
Contractor supplies sales | — | 42 | 42 | — | 39 | 39 | |||||||||||||||||
Service and other revenues | — | 69 | 69 | — | 56 | 56 | |||||||||||||||||
Total revenues | $ | 2,845 | $ | 780 | $ | 3,625 | $ | 2,333 | $ | 620 | $ | 2,953 |
• | The transaction price is generally fixed and stated on 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; 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. |
Accounts receivable, net of allowance for doubtful accounts (1) | $ | 49 | |
Inventory | 4 | ||
Rental equipment | 571 | ||
Property and equipment | 48 | ||
Intangibles (2) | 139 | ||
Other assets | 7 | ||
Total identifiable assets acquired | 818 | ||
Short-term debt and current maturities of long-term debt (3) | (3 | ) | |
Current liabilities | (33 | ) | |
Deferred taxes | (15 | ) | |
Long-term debt (3) | (11 | ) | |
Other long-term liabilities | (5 | ) | |
Total liabilities assumed | (67 | ) | |
Net identifiable assets acquired | 751 | ||
Goodwill (4) | 209 | ||
Net assets acquired | $ | 960 |
Fair value | Life (years) | |||
Customer relationships | $ | 138 | 10 | |
Non-compete agreements | 1 | 1 | ||
Total | $ | 139 |
Accounts receivable, net of allowance for doubtful accounts (1) | $ | 72 | |
Inventory | 5 | ||
Rental equipment | 550 | ||
Property and equipment | 45 | ||
Intangibles (customer relationships) (2) | 153 | ||
Other assets | 5 | ||
Total identifiable assets acquired | 830 | ||
Current liabilities | (61 | ) | |
Deferred taxes | (35 | ) | |
Other long-term liabilities | (3 | ) | |
Total liabilities assumed | (99 | ) | |
Net identifiable assets acquired | 731 | ||
Goodwill (3) | 585 | ||
Net assets acquired | $ | 1,316 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
June 30, 2017 | June 30, 2017 | |||||||||||||||||||||||||||||||
United Rentals | NES | Neff | Total | United Rentals | NES | Neff | Total | |||||||||||||||||||||||||
Historic/pro forma revenues | $ | 1,597 | $ | — | $ | 105 | $ | 1,702 | $ | 2,953 | $ | 81 | $ | 201 | $ | 3,235 | ||||||||||||||||
Historic/combined pretax income (loss) | 229 | — | 15 | 244 | 390 | (12 | ) | 22 | 400 | |||||||||||||||||||||||
Pro forma adjustments to pretax income (loss): | ||||||||||||||||||||||||||||||||
Impact of fair value mark-ups/useful life changes on depreciation (1) | — | (2 | ) | (2 | ) | (9 | ) | (5 | ) | (14 | ) | |||||||||||||||||||||
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2) | — | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (2 | ) | |||||||||||||||||||||
Intangible asset amortization (3) | — | (7 | ) | (7 | ) | (6 | ) | (14 | ) | (20 | ) | |||||||||||||||||||||
Interest expense (4) | — | (17 | ) | (17 | ) | (9 | ) | (34 | ) | (43 | ) | |||||||||||||||||||||
Elimination of historic interest (5) | — | 12 | 12 | 12 | 23 | 35 | ||||||||||||||||||||||||||
Elimination of merger related costs (6) | 14 | — | 14 | 16 | — | 16 | ||||||||||||||||||||||||||
Restructuring charges (7) | 9 | (2 | ) | 7 | (9 | ) | (16 | ) | (25 | ) | ||||||||||||||||||||||
Pro forma pretax income | $ | 250 | $ | 347 |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended June 30, 2018 | |||||||||||
Equipment rentals | $ | 1,332 | $ | 299 | $ | 1,631 | |||||
Sales of rental equipment | 145 | 12 | 157 | ||||||||
Sales of new equipment | 38 | 6 | 44 | ||||||||
Contractor supplies sales | 19 | 5 | 24 | ||||||||
Service and other revenues | 32 | 3 | 35 | ||||||||
Total revenue | 1,566 | 325 | 1,891 | ||||||||
Depreciation and amortization expense | 334 | 56 | 390 | ||||||||
Equipment rentals gross profit | 543 | 145 | 688 | ||||||||
Three Months Ended June 30, 2017 | |||||||||||
Equipment rentals | $ | 1,143 | $ | 224 | $ | 1,367 | |||||
Sales of rental equipment | 122 | 11 | 133 | ||||||||
Sales of new equipment | 43 | 4 | 47 | ||||||||
Contractor supplies sales | 18 | 3 | 21 | ||||||||
Service and other revenues | 26 | 3 | 29 | ||||||||
Total revenue | 1,352 | 245 | 1,597 | ||||||||
Depreciation and amortization expense | 285 | 45 | 330 | ||||||||
Equipment rentals gross profit | 465 | 111 | 576 | ||||||||
Six Months Ended June 30, 2018 | |||||||||||
Equipment rentals | $ | 2,533 | $ | 557 | $ | 3,090 | |||||
Sales of rental equipment | 316 | 22 | 338 | ||||||||
Sales of new equipment | 75 | 11 | 86 | ||||||||
Contractor supplies sales | 33 | 9 | 42 | ||||||||
Service and other revenues | 62 | 7 | 69 | ||||||||
Total revenue | 3,019 | 606 | 3,625 | ||||||||
Depreciation and amortization expense | 671 | 112 | 783 | ||||||||
Equipment rentals gross profit | 969 | 264 | 1,233 | ||||||||
Capital expenditures | 1,153 | 153 | 1,306 | ||||||||
Six Months Ended June 30, 2017 | |||||||||||
Equipment rentals | $ | 2,120 | $ | 413 | $ | 2,533 | |||||
Sales of rental equipment | 218 | 21 | 239 | ||||||||
Sales of new equipment | 78 | 8 | 86 | ||||||||
Contractor supplies sales | 32 | 7 | 39 | ||||||||
Service and other revenues | 50 | 6 | 56 | ||||||||
Total revenue | 2,498 | 455 | 2,953 | ||||||||
Depreciation and amortization expense | 549 | 91 | 640 | ||||||||
Equipment rentals gross profit | 825 | 195 | 1,020 | ||||||||
Capital expenditures | 863 | 105 | 968 |
June 30, 2018 | December 31, 2017 | ||||||
Total reportable segment assets | |||||||
General rentals | $ | 13,370 | $ | 13,351 | |||
Trench, power and pump | 1,738 | 1,679 | |||||
Total assets | $ | 15,108 | $ | 15,030 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total equipment rentals gross profit | $ | 688 | $ | 576 | $ | 1,233 | $ | 1,020 | |||||||
Gross profit from other lines of business | 94 | 79 | 195 | 149 | |||||||||||
Selling, general and administrative expenses | (239 | ) | (218 | ) | (471 | ) | (411 | ) | |||||||
Merger related costs | (2 | ) | (14 | ) | (3 | ) | (16 | ) | |||||||
Restructuring charge | (4 | ) | (19 | ) | (6 | ) | (19 | ) | |||||||
Non-rental depreciation and amortization | (67 | ) | (64 | ) | (138 | ) | (126 | ) | |||||||
Interest expense, net | (112 | ) | (113 | ) | (221 | ) | (207 | ) | |||||||
Other income, net | 1 | 2 | 2 | — | |||||||||||
Income before provision for income taxes | $ | 359 | $ | 229 | $ | 591 | $ | 390 |
Reserve Balance at | Charged to Costs and Expenses (1) | Payments and Other | Reserve Balance at | |||||||||||||
December 31, 2017 | June 30, 2018 | |||||||||||||||
Closed Restructuring Programs | ||||||||||||||||
Branch closure charges | $ | 13 | $ | — | $ | (3 | ) | $ | 10 | |||||||
Severance and other | — | — | — | — | ||||||||||||
Total | $ | 13 | $ | — | $ | (3 | ) | $ | 10 | |||||||
NES/Neff/Project XL Restructuring Program | ||||||||||||||||
Branch closure charges | $ | 8 | $ | 1 | $ | (3 | ) | $ | 6 | |||||||
Severance and other | 12 | 5 | (11 | ) | 6 | |||||||||||
Total | $ | 20 | $ | 6 | $ | (14 | ) | $ | 12 | |||||||
Total | ||||||||||||||||
Branch closure charges | $ | 21 | $ | 1 | $ | (6 | ) | $ | 16 | |||||||
Severance and other | 12 | 5 | (11 | ) | 6 | |||||||||||
Total | $ | 33 | $ | 6 | $ | (17 | ) | $ | 22 |
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. |
June 30, 2018 | December 31, 2017 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Senior notes | $ | 7,010 | $ | 6,907 | $ | 7,008 | $ | 7,340 |
June 30, 2018 | December 31, 2017 | ||||||
Accounts Receivable Securitization Facility expiring 2018 (1) | $ | 869 | $ | 695 | |||
$3.0 billion ABL Facility expiring 2021 (2) | 1,033 | 1,670 | |||||
4 5/8 percent Senior Secured Notes due 2023 | 993 | 992 | |||||
5 3/4 percent Senior Notes due 2024 | 841 | 841 | |||||
5 1/2 percent Senior Notes due 2025 | 794 | 793 | |||||
4 5/8 percent Senior Notes due 2025 | 740 | 740 | |||||
5 7/8 percent Senior Notes due 2026 | 998 | 998 | |||||
5 1/2 percent Senior Notes due 2027 | 991 | 990 | |||||
4 7/8 percent Senior Notes due 2028 (3) | 1,649 | 1,648 | |||||
4 7/8 percent Senior Notes due 2028 (3) | 4 | 6 | |||||
Capital leases | 74 | 67 | |||||
Total debt | 8,986 | 9,440 | |||||
Less short-term portion (4) | (900 | ) | (723 | ) | |||
Total long-term debt | $ | 8,086 | $ | 8,717 |
(1) | In June 2018, 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 of the facility, which expires on June 29, 2019, was increased to $875. At June 30, 2018, $5 was available under our accounts receivable securitization facility. The interest rate applicable to the accounts receivable securitization facility was 2.9 percent at June 30, 2018. During the six months ended June 30, 2018, the monthly average principal amount outstanding under the accounts receivable securitization facility was $749, and the weighted-average interest rate thereon was 2.7 percent. The maximum month-end principal amount outstanding under the accounts receivable securitization facility during the six months ended June 30, 2018 was $870. 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 June 30, 2018, there were $879 of receivables, net of applicable reserves and other deductions, in the collateral pool. |
(2) | At June 30, 2018, $1.923 billion was available under our ABL facility, net of $37 of letters of credit. The interest rate applicable to the ABL facility was 3.5 percent at June 30, 2018. During the six months ended June 30, 2018, the monthly average principal amount outstanding under the ABL facility was $1.184 billion, and the weighted-average interest rate thereon was 3.2 percent. The maximum month-end principal amount outstanding under the ABL facility during the six months ended June 30, 2018 was $1.373 billion. |
(3) | URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, we consummated an exchange offer pursuant to which most of the 4 7/8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7/8 percent Senior Notes issued in August 2017. |
(4) | As of June 30, 2018, our short-term debt primarily reflects $869 of borrowings under our accounts receivable securitization facility. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Numerator: | |||||||||||||||
Net income available to common stockholders | $ | 270 | $ | 141 | 453 | 250 | |||||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per share—weighted-average common shares | 83,456 | 84,635 | 83,854 | 84,546 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock options | 370 | 394 | 393 | 403 | |||||||||||
Restricted stock units | 373 | 379 | 476 | 452 | |||||||||||
Denominator for diluted earnings per share—adjusted weighted-average common shares | 84,199 | 85,408 | 84,723 | 85,401 | |||||||||||
Basic earnings per share | $ | 3.22 | $ | 1.67 | $ | 5.40 | $ | 2.95 | |||||||
Diluted earnings per share | $ | 3.20 | $ | 1.65 | $ | 5.34 | $ | 2.92 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 44 | $ | — | $ | 73 | $ | — | $ | — | $ | 117 | |||||||||||||
Accounts receivable, net | — | — | — | 109 | 1,094 | — | 1,203 | ||||||||||||||||||||
Intercompany receivable (payable) | 1,197 | (1,083 | ) | (98 | ) | (16 | ) | — | — | — | |||||||||||||||||
Inventory | — | 85 | — | 9 | — | — | 94 | ||||||||||||||||||||
Prepaid expenses and other assets | — | 89 | — | 3 | — | — | 92 | ||||||||||||||||||||
Total current assets | 1,197 | (865 | ) | (98 | ) | 178 | 1,094 | — | 1,506 | ||||||||||||||||||
Rental equipment, net | — | 7,642 | — | 571 | — | — | 8,213 | ||||||||||||||||||||
Property and equipment, net | 45 | 354 | 41 | 40 | — | — | 480 | ||||||||||||||||||||
Investments in subsidiaries | 1,939 | 1,053 | 908 | — | — | (3,900 | ) | — | |||||||||||||||||||
Goodwill | — | 3,842 | — | 254 | — | — | 4,096 | ||||||||||||||||||||
Other intangible assets, net | — | 758 | — | 40 | — | — | 798 | ||||||||||||||||||||
Other long-term assets | 6 | 9 | — | — | — | — | 15 | ||||||||||||||||||||
Total assets | $ | 3,187 | $ | 12,793 | $ | 851 | $ | 1,083 | $ | 1,094 | $ | (3,900 | ) | $ | 15,108 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||||||||||||||||||
Short-term debt and current maturities of long-term debt | $ | 1 | $ | 28 | $ | — | $ | 2 | $ | 869 | $ | — | $ | 900 | |||||||||||||
Accounts payable | — | 787 | — | 72 | — | — | 859 | ||||||||||||||||||||
Accrued expenses and other liabilities | — | 429 | 13 | 27 | 1 | — | 470 | ||||||||||||||||||||
Total current liabilities | 1 | 1,244 | 13 | 101 | 870 | — | 2,229 | ||||||||||||||||||||
Long-term debt | — | 8,074 | 9 | 3 | — | — | 8,086 | ||||||||||||||||||||
Deferred taxes | 22 | 1,416 | — | 71 | — | — | 1,509 | ||||||||||||||||||||
Other long-term liabilities | — | 120 | — | — | — | — | 120 | ||||||||||||||||||||
Total liabilities | 23 | 10,854 | 22 | 175 | 870 | — | 11,944 | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 3,164 | 1,939 | 829 | 908 | 224 | (3,900 | ) | 3,164 | |||||||||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 3,187 | $ | 12,793 | $ | 851 | $ | 1,083 | $ | 1,094 | $ | (3,900 | ) | $ | 15,108 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 23 | $ | — | $ | 329 | $ | — | $ | — | $ | 352 | |||||||||||||
Accounts receivable, net | — | 56 | — | 119 | 1,058 | — | 1,233 | ||||||||||||||||||||
Intercompany receivable (payable) | 887 | (677 | ) | (198 | ) | (124 | ) | — | 112 | — | |||||||||||||||||
Inventory | — | 68 | — | 7 | — | — | 75 | ||||||||||||||||||||
Prepaid expenses and other assets | 4 | 219 | 111 | 2 | — | (224 | ) | 112 | |||||||||||||||||||
Total current assets | 891 | (311 | ) | (87 | ) | 333 | 1,058 | (112 | ) | 1,772 | |||||||||||||||||
Rental equipment, net | — | 7,264 | — | 560 | — | — | 7,824 | ||||||||||||||||||||
Property and equipment, net | 41 | 352 | 32 | 42 | — | — | 467 | ||||||||||||||||||||
Investments in subsidiaries | 2,194 | 1,148 | 1,087 | — | — | (4,429 | ) | — | |||||||||||||||||||
Goodwill | — | 3,815 | — | 267 | — | — | 4,082 | ||||||||||||||||||||
Other intangible assets, net | — | 827 | — | 48 | — | — | 875 | ||||||||||||||||||||
Other long-term assets | 3 | 7 | — | — | — | — | 10 | ||||||||||||||||||||
Total assets | $ | 3,129 | $ | 13,102 | $ | 1,032 | $ | 1,250 | $ | 1,058 | $ | (4,541 | ) | $ | 15,030 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||||||||||||||||||
Short-term debt and current maturities of long-term debt | $ | 1 | $ | 25 | $ | — | $ | 2 | $ | 695 | $ | — | $ | 723 | |||||||||||||
Accounts payable | — | 366 | — | 43 | — | — | 409 | ||||||||||||||||||||
Accrued expenses and other liabilities | — | 477 | 17 | 41 | 1 | — | 536 | ||||||||||||||||||||
Total current liabilities | 1 | 868 | 17 | 86 | 696 | — | 1,668 | ||||||||||||||||||||
Long-term debt | 1 | 8,596 | 117 | 3 | — | — | 8,717 | ||||||||||||||||||||
Deferred taxes | 21 | 1,324 | — | 74 | — | — | 1,419 | ||||||||||||||||||||
Other long-term liabilities | — | 120 | — | — | — | — | 120 | ||||||||||||||||||||
Total liabilities | 23 | 10,908 | 134 | 163 | 696 | — | 11,924 | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 3,106 | 2,194 | 898 | 1,087 | 362 | (4,541 | ) | 3,106 | |||||||||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 3,129 | $ | 13,102 | $ | 1,032 | $ | 1,250 | $ | 1,058 | $ | (4,541 | ) | $ | 15,030 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 1,507 | $ | — | $ | 124 | $ | — | $ | — | $ | 1,631 | |||||||||||||
Sales of rental equipment | — | 143 | — | 14 | — | — | 157 | ||||||||||||||||||||
Sales of new equipment | — | 40 | — | 4 | — | — | 44 | ||||||||||||||||||||
Contractor supplies sales | — | 21 | — | 3 | — | — | 24 | ||||||||||||||||||||
Service and other revenues | — | 29 | — | 6 | — | — | 35 | ||||||||||||||||||||
Total revenues | — | 1,740 | — | 151 | — | — | 1,891 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 561 | — | 59 | — | — | 620 | ||||||||||||||||||||
Depreciation of rental equipment | — | 298 | — | 25 | — | — | 323 | ||||||||||||||||||||
Cost of rental equipment sales | — | 85 | — | 7 | — | — | 92 | ||||||||||||||||||||
Cost of new equipment sales | — | 34 | — | 4 | — | — | 38 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 14 | — | 2 | — | — | 16 | ||||||||||||||||||||
Cost of service and other revenues | — | 16 | — | 4 | — | — | 20 | ||||||||||||||||||||
Total cost of revenues | — | 1,008 | — | 101 | — | — | 1,109 | ||||||||||||||||||||
Gross profit | — | 732 | — | 50 | — | — | 782 | ||||||||||||||||||||
Selling, general and administrative expenses | (35 | ) | 242 | — | 23 | 9 | — | 239 | |||||||||||||||||||
Merger related costs | — | 2 | — | — | — | — | 2 | ||||||||||||||||||||
Restructuring charge | — | 4 | — | — | — | — | 4 | ||||||||||||||||||||
Non-rental depreciation and amortization | 4 | 58 | — | 5 | — | — | 67 | ||||||||||||||||||||
Operating income (loss) | 31 | 426 | — | 22 | (9 | ) | — | 470 | |||||||||||||||||||
Interest (income) expense, net | (8 | ) | 115 | — | — | 5 | — | 112 | |||||||||||||||||||
Other (income) expense, net | (156 | ) | 172 | — | 13 | (30 | ) | — | (1 | ) | |||||||||||||||||
Income before provision for income taxes | 195 | 139 | — | 9 | 16 | — | 359 | ||||||||||||||||||||
Provision for income taxes | 43 | 40 | — | 2 | 4 | — | 89 | ||||||||||||||||||||
Income before equity in net earnings (loss) of subsidiaries | 152 | 99 | — | 7 | 12 | — | 270 | ||||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 118 | 19 | 7 | — | — | (144 | ) | — | |||||||||||||||||||
Net income (loss) | 270 | 118 | 7 | 7 | 12 | (144 | ) | 270 | |||||||||||||||||||
Other comprehensive (loss) income | (20 | ) | (20 | ) | (21 | ) | (90 | ) | — | 131 | (20 | ) | |||||||||||||||
Comprehensive income (loss) | $ | 250 | $ | 98 | $ | (14 | ) | $ | (83 | ) | $ | 12 | $ | (13 | ) | $ | 250 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 1,262 | $ | — | $ | 105 | $ | — | $ | — | $ | 1,367 | |||||||||||||
Sales of rental equipment | — | 121 | — | 12 | — | — | 133 | ||||||||||||||||||||
Sales of new equipment | — | 42 | — | 5 | — | — | 47 | ||||||||||||||||||||
Contractor supplies sales | — | 19 | — | 2 | — | — | 21 | ||||||||||||||||||||
Service and other revenues | — | 24 | — | 5 | — | — | 29 | ||||||||||||||||||||
Total revenues | — | 1,468 | — | 129 | — | — | 1,597 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 472 | — | 53 | — | — | 525 | ||||||||||||||||||||
Depreciation of rental equipment | — | 245 | — | 21 | — | — | 266 | ||||||||||||||||||||
Cost of rental equipment sales | — | 75 | — | 6 | — | — | 81 | ||||||||||||||||||||
Cost of new equipment sales | — | 35 | — | 5 | — | — | 40 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 13 | — | 2 | — | — | 15 | ||||||||||||||||||||
Cost of service and other revenues | — | 14 | — | 1 | — | — | 15 | ||||||||||||||||||||
Total cost of revenues | — | 854 | — | 88 | — | — | 942 | ||||||||||||||||||||
Gross profit | — | 614 | — | 41 | — | — | 655 | ||||||||||||||||||||
Selling, general and administrative expenses | 19 | 171 | — | 21 | 7 | — | 218 | ||||||||||||||||||||
Merger related costs | — | 14 | — | — | — | — | 14 | ||||||||||||||||||||
Restructuring charge | — | 19 | — | — | — | — | 19 | ||||||||||||||||||||
Non-rental depreciation and amortization | 4 | 56 | — | 4 | — | — | 64 | ||||||||||||||||||||
Operating (loss) income | (23 | ) | 354 | — | 16 | (7 | ) | — | 340 | ||||||||||||||||||
Interest (income) expense, net | (3 | ) | 115 | — | (1 | ) | 3 | (1 | ) | 113 | |||||||||||||||||
Other (income) expense, net | (131 | ) | 141 | — | 11 | (23 | ) | — | (2 | ) | |||||||||||||||||
Income before provision for income taxes | 111 | 98 | — | 6 | 13 | 1 | 229 | ||||||||||||||||||||
Provision for income taxes | 42 | 39 | — | 2 | 5 | — | 88 | ||||||||||||||||||||
Income before equity in net earnings (loss) of subsidiaries | 69 | 59 | — | 4 | 8 | 1 | 141 | ||||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 72 | 13 | 4 | — | — | (89 | ) | — | |||||||||||||||||||
Net income (loss) | 141 | 72 | 4 | 4 | 8 | (88 | ) | 141 | |||||||||||||||||||
Other comprehensive income (loss) | 25 | 25 | 26 | 21 | — | (72 | ) | 25 | |||||||||||||||||||
Comprehensive income (loss) | $ | 166 | $ | 97 | $ | 30 | $ | 25 | $ | 8 | $ | (160 | ) | $ | 166 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 2,853 | $ | — | $ | 237 | $ | — | $ | — | $ | 3,090 | |||||||||||||
Sales of rental equipment | — | 307 | — | 31 | — | — | 338 | ||||||||||||||||||||
Sales of new equipment | — | 77 | — | 9 | — | — | 86 | ||||||||||||||||||||
Contractor supplies sales | — | 36 | — | 6 | — | — | 42 | ||||||||||||||||||||
Service and other revenues | — | 60 | — | 9 | — | — | 69 | ||||||||||||||||||||
Total revenues | — | 3,333 | — | 292 | — | — | 3,625 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 1,096 | — | 116 | — | — | 1,212 | ||||||||||||||||||||
Depreciation of rental equipment | — | 595 | — | 50 | — | — | 645 | ||||||||||||||||||||
Cost of rental equipment sales | — | 183 | — | 16 | — | — | 199 | ||||||||||||||||||||
Cost of new equipment sales | — | 67 | — | 8 | — | — | 75 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 24 | — | 4 | — | — | 28 | ||||||||||||||||||||
Cost of service and other revenues | — | 33 | — | 5 | — | — | 38 | ||||||||||||||||||||
Total cost of revenues | — | 1,998 | — | 199 | — | — | 2,197 | ||||||||||||||||||||
Gross profit | — | 1,335 | — | 93 | — | — | 1,428 | ||||||||||||||||||||
Selling, general and administrative expenses | 5 | 407 | — | 42 | 17 | — | 471 | ||||||||||||||||||||
Merger related costs | — | 3 | — | — | — | — | 3 | ||||||||||||||||||||
Restructuring charge | — | 6 | — | — | — | — | 6 | ||||||||||||||||||||
Non-rental depreciation and amortization | 8 | 120 | — | 10 | — | — | 138 | ||||||||||||||||||||
Operating (loss) income | (13 | ) | 799 | — | 41 | (17 | ) | — | 810 | ||||||||||||||||||
Interest (income) expense, net | (15 | ) | 227 | 1 | (1 | ) | 10 | (1 | ) | 221 | |||||||||||||||||
Other (income) expense, net | (297 | ) | 333 | — | 24 | (62 | ) | — | (2 | ) | |||||||||||||||||
Income (loss) before provision for income taxes | 299 | 239 | (1 | ) | 18 | 35 | 1 | 591 | |||||||||||||||||||
Provision for income taxes | 60 | 64 | — | 5 | 9 | — | 138 | ||||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 239 | 175 | (1 | ) | 13 | 26 | 1 | 453 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 214 | 39 | 13 | — | — | (266 | ) | — | |||||||||||||||||||
Net income (loss) | 453 | 214 | 12 | 13 | 26 | (265 | ) | 453 | |||||||||||||||||||
Other comprehensive (loss) income | (45 | ) | (45 | ) | (46 | ) | (113 | ) | — | 204 | (45 | ) | |||||||||||||||
Comprehensive income (loss) | $ | 408 | $ | 169 | $ | (34 | ) | $ | (100 | ) | $ | 26 | $ | (61 | ) | $ | 408 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 2,332 | $ | — | $ | 201 | $ | — | $ | — | $ | 2,533 | |||||||||||||
Sales of rental equipment | — | 216 | — | 23 | — | — | 239 | ||||||||||||||||||||
Sales of new equipment | — | 77 | — | 9 | — | — | 86 | ||||||||||||||||||||
Contractor supplies sales | — | 35 | — | 4 | — | — | 39 | ||||||||||||||||||||
Service and other revenues | — | 48 | — | 8 | — | — | 56 | ||||||||||||||||||||
Total revenues | — | 2,708 | — | 245 | — | — | 2,953 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 895 | — | 104 | — | — | 999 | ||||||||||||||||||||
Depreciation of rental equipment | — | 472 | — | 42 | — | — | 514 | ||||||||||||||||||||
Cost of rental equipment sales | — | 129 | — | 12 | — | — | 141 | ||||||||||||||||||||
Cost of new equipment sales | — | 66 | — | 8 | — | — | 74 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 25 | — | 3 | — | — | 28 | ||||||||||||||||||||
Cost of service and other revenues | — | 25 | — | 3 | — | — | 28 | ||||||||||||||||||||
Total cost of revenues | — | 1,612 | — | 172 | — | — | 1,784 | ||||||||||||||||||||
Gross profit | — | 1,096 | — | 73 | — | — | 1,169 | ||||||||||||||||||||
Selling, general and administrative expenses | 42 | 316 | — | 38 | 15 | — | 411 | ||||||||||||||||||||
Merger related costs | — | 16 | — | — | — | — | 16 | ||||||||||||||||||||
Restructuring charge | — | 19 | — | — | — | — | 19 | ||||||||||||||||||||
Non-rental depreciation and amortization | 8 | 108 | — | 10 | — | — | 126 | ||||||||||||||||||||
Operating (loss) income | (50 | ) | 637 | — | 25 | (15 | ) | — | 597 | ||||||||||||||||||
Interest (income) expense, net | (5 | ) | 208 | 1 | — | 5 | (2 | ) | 207 | ||||||||||||||||||
Other (income) expense, net | (243 | ) | 265 | — | 23 | (45 | ) | — | — | ||||||||||||||||||
Income (loss) before provision for income taxes | 198 | 164 | (1 | ) | 2 | 25 | 2 | 390 | |||||||||||||||||||
Provision for income taxes | 63 | 67 | — | — | 10 | — | 140 | ||||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 135 | 97 | (1 | ) | 2 | 15 | 2 | 250 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 115 | 18 | 2 | — | — | (135 | ) | — | |||||||||||||||||||
Net income (loss) | 250 | 115 | 1 | 2 | 15 | (133 | ) | 250 | |||||||||||||||||||
Other comprehensive income (loss) | 33 | 33 | 34 | 28 | — | (95 | ) | 33 | |||||||||||||||||||
Comprehensive income (loss) | $ | 283 | $ | 148 | $ | 35 | $ | 30 | $ | 15 | $ | (228 | ) | $ | 283 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 12 | $ | 1,714 | $ | (1 | ) | $ | (66 | ) | $ | (10 | ) | $ | — | $ | 1,649 | ||||||||||
Net cash used in investing activities | (12 | ) | (920 | ) | — | (73 | ) | — | — | (1,005 | ) | ||||||||||||||||
Net cash (used in) provided by financing activities | — | (773 | ) | 1 | (108 | ) | 10 | — | (870 | ) | |||||||||||||||||
Effect of foreign exchange rates | — | — | — | (9 | ) | — | — | (9 | ) | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 21 | — | (256 | ) | — | — | (235 | ) | ||||||||||||||||||
Cash and cash equivalents at beginning of period | — | 23 | — | 329 | — | — | 352 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 44 | $ | — | $ | 73 | $ | — | $ | — | $ | 117 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 10 | $ | 1,297 | $ | (1 | ) | $ | 78 | $ | (55 | ) | $ | — | $ | 1,329 | |||||||||||
Net cash used in investing activities | (10 | ) | (1,624 | ) | — | (50 | ) | — | — | (1,684 | ) | ||||||||||||||||
Net cash provided by (used in) financing activities | — | 315 | 1 | (1 | ) | 55 | — | 370 | |||||||||||||||||||
Effect of foreign exchange rates | — | — | — | 11 | — | — | 11 | ||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (12 | ) | — | 38 | — | — | 26 | |||||||||||||||||||
Cash and cash equivalents at beginning of period | — | 21 | — | 291 | — | — | 312 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 9 | $ | — | $ | 329 | $ | — | $ | — | $ | 338 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data, unless otherwise indicated) |
• | A consistently superior standard of service to customers, often provided through a single point of contact; |
• | The further optimization of our customer mix and fleet mix, with a dual objective: to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth. We believe these efforts will lead to even better service of our target accounts, primarily large construction and industrial customers, as well as select local contractors. Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns; |
• | A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement. We continue to implement Lean kaizen processes across our branch network, with the objectives of: reducing the cycle time associated with renting our equipment to customers; improving invoice accuracy and service quality; reducing the elapsed time for equipment pickup and delivery; and improving the effectiveness and efficiency of our repair and maintenance operations. We achieved the anticipated run rate savings from the Lean initiatives, including those included in the Project XL work streams discussed below, in 2017 and 2016, and expect to continue to generate savings from these initiatives; |
• | The implementation of 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 pump footprint, as well as our tools offering, and the cross-selling of these services throughout our network, as exhibited by our pending acquisition of BakerCorp discussed in note 11 to the condensed consolidated financial statements. We believe that the expansion of our trench, power and pump business, as well as our tools offering, 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 and Neff. Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals. |
• | Redeemed all of our 7 5/8 percent Senior Notes and 6 1/8 percent Senior Notes; |
• | Issued $750 principal amount of 4 5/8 percent Senior Notes due 2025; |
• | Issued $250 principal amount of 5 7/8 percent Senior Notes due 2026, as an add-on to our existing 5 7/8 percent Senior Notes due 2026; |
• | Issued $250 principal amount of 5 1/2 percent Senior Notes due 2027, as an add-on to our existing 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. Following the issuances, we consummated an exchange offer pursuant to which most of the 4 7/8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7/8 percent Senior Notes issued in August 2017; |
• | Amended and extended our ABL facility, including an increase in the facility size from $2.5 billion to $3.0 billion; and |
• | Amended and extended our accounts receivable securitization facility, including an increase in the facility size from $625 to $875. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 270 | $ | 141 | $ | 453 | $ | 250 | |||||||
Diluted earnings per share | $ | 3.20 | $ | 1.65 | $ | 5.34 | $ | 2.92 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||
Tax rate applied to items below | 25.3 | % | 38.5 | % | 25.3 | % | 38.5 | % | |||||||||||||||||||||||
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) | $ | (2 | ) | $ | (0.02 | ) | $ | (9 | ) | $ | (0.09 | ) | $ | (3 | ) | $ | (0.03 | ) | $ | (10 | ) | $ | (0.11 | ) | |||||||
Merger related intangible asset amortization (2) | (30 | ) | (0.37 | ) | (24 | ) | (0.30 | ) | (64 | ) | (0.76 | ) | (48 | ) | (0.57 | ) | |||||||||||||||
Impact on depreciation related to acquired fleet and property and equipment (3) | (7 | ) | (0.08 | ) | 2 | 0.03 | (15 | ) | (0.17 | ) | 2 | 0.02 | |||||||||||||||||||
Impact of the fair value mark-up of acquired fleet (4) | (12 | ) | (0.15 | ) | (11 | ) | (0.13 | ) | (30 | ) | (0.36 | ) | (16 | ) | (0.19 | ) | |||||||||||||||
Restructuring charge (5) | (2 | ) | (0.03 | ) | (12 | ) | (0.14 | ) | (4 | ) | (0.05 | ) | (12 | ) | (0.14 | ) | |||||||||||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | — | — | (8 | ) | (0.09 | ) | — | — | (8 | ) | (0.09 | ) |
(1) | This reflects transaction costs associated with the NES and Neff acquisitions discussed in note 3 to our condensed consolidated financial statements and the BakerCorp acquisition discussed in note 11 to our condensed consolidated financial statements. The BakerCorp acquisition is expected to close early in the third quarter of 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 and Neff acquisitions. |
(3) | This reflects the impact of extending the useful lives of equipment acquired in the RSC, NES and Neff 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 and Neff acquisitions that was subsequently sold. |
(5) | This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 5 to our condensed consolidated financial statements. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 270 | $ | 141 | $ | 453 | $ | 250 | |||||||
Provision for income taxes | 89 | 88 | 138 | 140 | |||||||||||
Interest expense, net | 112 | 113 | 221 | 207 | |||||||||||
Depreciation of rental equipment | 323 | 266 | 645 | 514 | |||||||||||
Non-rental depreciation and amortization | 67 | 64 | 138 | 126 | |||||||||||
EBITDA | $ | 861 | $ | 672 | $ | 1,595 | $ | 1,237 | |||||||
Merger related costs (1) | 2 | 14 | 3 | 16 | |||||||||||
Restructuring charge (2) | 4 | 19 | 6 | 19 | |||||||||||
Stock compensation expense, net (3) | 24 | 24 | 43 | 40 | |||||||||||
Impact of the fair value mark-up of acquired fleet (4) | 16 | 18 | 40 | 26 | |||||||||||
Adjusted EBITDA | $ | 907 | $ | 747 | $ | 1,687 | $ | 1,338 |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Net cash provided by operating activities | $ | 1,649 | $ | 1,329 | |||
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 | ) | (4 | ) | |||
Gain on sales of rental equipment | 139 | 98 | |||||
Gain on sales of non-rental equipment | 3 | 3 | |||||
Gain on insurance proceeds from damaged equipment | 14 | 8 | |||||
Merger related costs (1) | (3 | ) | (16 | ) | |||
Restructuring charge (2) | (6 | ) | (19 | ) | |||
Stock compensation expense, net (3) | (43 | ) | (40 | ) | |||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | — | (12 | ) | ||||
Changes in assets and liabilities | (404 | ) | (346 | ) | |||
Cash paid for interest | 213 | 177 | |||||
Cash paid for income taxes, net | 39 | 59 | |||||
EBITDA | $ | 1,595 | $ | 1,237 | |||
Add back: | |||||||
Merger related costs (1) | 3 | 16 | |||||
Restructuring charge (2) | 6 | 19 | |||||
Stock compensation expense, net (3) | 43 | 40 | |||||
Impact of the fair value mark-up of acquired fleet (4) | 40 | 26 | |||||
Adjusted EBITDA | $ | 1,687 | $ | 1,338 |
(1) | This reflects transaction costs associated with the NES and Neff acquisitions discussed in note 3 to our condensed consolidated financial statements and the BakerCorp acquisition discussed in note 11 to our condensed consolidated financial statements. The BakerCorp acquisition is expected to close early in the third quarter of 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 5 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 and Neff acquisitions that was subsequently sold. |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended June 30, 2018 | |||||||||||
Equipment rentals | $ | 1,332 | $ | 299 | $ | 1,631 | |||||
Sales of rental equipment | 145 | 12 | 157 | ||||||||
Sales of new equipment | 38 | 6 | 44 | ||||||||
Contractor supplies sales | 19 | 5 | 24 | ||||||||
Service and other revenues | 32 | 3 | 35 | ||||||||
Total revenue | $ | 1,566 | $ | 325 | $ | 1,891 | |||||
Three Months Ended June 30, 2017 | |||||||||||
Equipment rentals | $ | 1,143 | $ | 224 | $ | 1,367 | |||||
Sales of rental equipment | 122 | 11 | 133 | ||||||||
Sales of new equipment | 43 | 4 | 47 | ||||||||
Contractor supplies sales | 18 | 3 | 21 | ||||||||
Service and other revenues | 26 | 3 | 29 | ||||||||
Total revenue | $ | 1,352 | $ | 245 | $ | 1,597 | |||||
Six Months Ended June 30, 2018 | |||||||||||
Equipment rentals | $ | 2,533 | $ | 557 | $ | 3,090 | |||||
Sales of rental equipment | 316 | 22 | 338 | ||||||||
Sales of new equipment | 75 | 11 | 86 | ||||||||
Contractor supplies sales | 33 | 9 | 42 | ||||||||
Service and other revenues | 62 | 7 | 69 | ||||||||
Total revenue | $ | 3,019 | $ | 606 | $ | 3,625 | |||||
Six Months Ended June 30, 2017 | |||||||||||
Equipment rentals | $ | 2,120 | $ | 413 | $ | 2,533 | |||||
Sales of rental equipment | 218 | 21 | 239 | ||||||||
Sales of new equipment | 78 | 8 | 86 | ||||||||
Contractor supplies sales | 32 | 7 | 39 | ||||||||
Service and other revenues | 50 | 6 | 56 | ||||||||
Total revenue | $ | 2,498 | $ | 455 | $ | 2,953 |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended June 30, 2018 | |||||||||||
Equipment Rentals Gross Profit | $ | 543 | $ | 145 | $ | 688 | |||||
Equipment Rentals Gross Margin | 40.8 | % | 48.5 | % | 42.2 | % | |||||
Three Months Ended June 30, 2017 | |||||||||||
Equipment Rentals Gross Profit | $ | 465 | $ | 111 | $ | 576 | |||||
Equipment Rentals Gross Margin | 40.7 | % | 49.6 | % | 42.1 | % | |||||
Six Months Ended June 30, 2018 | |||||||||||
Equipment Rentals Gross Profit | $ | 969 | $ | 264 | $ | 1,233 | |||||
Equipment Rentals Gross Margin | 38.3 | % | 47.4 | % | 39.9 | % | |||||
Six Months Ended June 30, 2017 | |||||||||||
Equipment Rentals Gross Profit | $ | 825 | $ | 195 | $ | 1,020 | |||||
Equipment Rentals Gross Margin | 38.9 | % | 47.2 | % | 40.3 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||
Total gross margin | 41.4 | % | 41.0 | % | 40 bps | 39.4% | 39.6% | (20) bps | |||||
Equipment rentals | 42.2 | % | 42.1 | % | 10 bps | 39.9% | 40.3% | (40) bps | |||||
Sales of rental equipment | 41.4 | % | 39.1 | % | 230 bps | 41.1% | 41.0% | 10 bps | |||||
Sales of new equipment | 13.6 | % | 14.9 | % | (130) bps | 12.8% | 14.0% | (120) bps | |||||
Contractor supplies sales | 33.3 | % | 28.6 | % | 470 bps | 33.3% | 28.2% | 510 bps | |||||
Service and other revenues | 42.9 | % | 48.3 | % | (540) bps | 44.9% | 50.0% | (510) bps |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||
Selling, general and administrative ("SG&A") expense | $239 | $218 | 9.6% | $471 | $411 | 14.6% | |||
SG&A expense as a percentage of revenue | 12.6% | 13.7% | (110) bps | 13.0% | 13.9% | (90) bps | |||
Merger related costs | 2 | 14 | (85.7)% | 3 | 16 | (81.3)% | |||
Restructuring charge | 4 | 19 | (78.9)% | 6 | 19 | (68.4)% | |||
Non-rental depreciation and amortization | 67 | 64 | 4.7% | 138 | 126 | 9.5% | |||
Interest expense, net | 112 | 113 | (0.9)% | 221 | 207 | 6.8% | |||
Other income, net | (1) | (2) | (50.0)% | (2) | — | —% | |||
Provision for income taxes | 89 | 88 | 1.1% | 138 | 140 | (1.4)% | |||
Effective tax rate | 24.8% | 38.4% | (1,360) bps | 23.4% | 35.9% | (1,250) bps |
ABL facility: | |||
Borrowing capacity, net of letters of credit | $ | 1,923 | |
Outstanding debt, net of debt issuance costs | 1,033 | ||
Interest rate at June 30, 2018 | 3.5 | % | |
Average month-end principal amount of debt outstanding | 1,184 | ||
Weighted-average interest rate on average debt outstanding | 3.2 | % | |
Maximum month-end principal amount of debt outstanding | 1,373 | ||
Accounts receivable securitization facility: | |||
Borrowing capacity | 5 | ||
Outstanding debt, net of debt issuance costs | 869 | ||
Interest rate at June 30, 2018 | 2.9 | % | |
Average month-end principal amount of debt outstanding | 749 | ||
Weighted-average interest rate on average debt outstanding | 2.7 | % | |
Maximum month-end principal amount of debt outstanding | 870 |
Corporate Rating | Outlook | ||
Moody’s | Ba2 | Stable | |
Standard & Poor’s | BB | Stable |
Six Months Ended | |||||||
June 30, | |||||||
2018 | 2017 | ||||||
Net cash provided by operating activities | $ | 1,649 | $ | 1,329 | |||
Purchases of rental equipment | (1,226 | ) | (913 | ) | |||
Purchases of non-rental equipment | (80 | ) | (55 | ) | |||
Proceeds from sales of rental equipment | 338 | 239 | |||||
Proceeds from sales of non-rental equipment | 8 | 6 | |||||
Insurance proceeds from damaged equipment | 14 | 8 | |||||
Free cash flow | $ | 703 | $ | 614 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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) | |||||||||
April 1, 2018 to April 30, 2018 | 326,005 | (1) | $ | 169.18 | 325,114 | — | |||||||
May 1, 2018 to May 31, 2018 | 363,650 | (1) | $ | 151.90 | 362,046 | — | |||||||
June 1, 2018 to June 30, 2018 | 357,704 | (1) | $ | 162.73 | 356,268 | — | |||||||
Total | 1,047,359 | $ | 160.98 | 1,043,428 | $ | 1,250,000,000 |
(1) | In April 2018, May 2018 and June 2018, 891, 1,604 and 1,436 shares, respectively, were withheld by Holdings to satisfy tax withholding obligations upon the vesting of restricted stock unit awards. These shares were not acquired pursuant to any repurchase plan or program. |
(2) | On July 21, 2015, our Board authorized a $1 billion share repurchase program which commenced in November 2015. The purchases above were made pursuant to this program, which was completed in June 2018. On April 17, 2018, our Board authorized a new $1.25 billion share repurchase program, which commenced in July 2018 upon completion of the $1 billion share repurchase program. The dollar amount above that may yet be purchased pertains to the $1.25 billion program, which we intend to complete by the end of 2019. |
Item 6. | Exhibits |
2 | Agreement and Plan of Merger, dated as of June 30, 2018, by and among United Rentals, Inc., UR Merger Sub IV Corporation and BakerCorp International Holdings, Inc. (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 July 2, 2018) |
3(a) | Fourth Restated Certificate of Incorporation of United Rentals, Inc., dated June 1, 2017 (incorporated by reference to Exhibit 3.2 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on June 2, 2017) |
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, 2017) |
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) |
10 | Amendment No. 8 to Third Amended and Restated Receivables Purchase Agreement and Amendment No. 5 to Third Amended and Restated Purchase and Contribution Agreement, dated as of June 29, 2018, 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, SunTrust Bank, MUFG Bank, Ltd. (formerly known as the Bank of Tokyo-Mitsubishi UFJ, Ltd.), Bank of Montreal and The Toronto-Dominion Bank (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 June 29, 2018) |
12* | |
31(a)* | |
31(b)* | |
32(a)** | |
32(b)** | |
101 | The following materials from the Quarterly Report on Form 10-Q for United Rentals, Inc. and United Rentals (North America), Inc., for the quarter ended June 30, 2018 filed on July 18, 2018, formatted in 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 to the Unaudited Condensed Consolidated Financial Statements. |
* | Filed herewith. |
** | Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act. |
UNITED RENTALS, INC. | ||||
Dated: | July 18, 2018 | By: | /S/ JESSICA T. GRAZIANO | |
Jessica T. Graziano Senior Vice President, Controller and Principal Accounting Officer | ||||
UNITED RENTALS (NORTH AMERICA), INC. | ||||
Dated: | July 18, 2018 | By: | /S/ JESSICA T. GRAZIANO | |
Jessica T. Graziano Senior Vice President, Controller and Principal Accounting Officer | ||||
Year Ended December 31, | Six Months Ended June 30, | ||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||
Earnings: | |||||||||||||||||||
Income before provision for income taxes | $ | 605 | $ | 850 | $ | 963 | $ | 909 | $ | 1,048 | $ | 591 | |||||||
Add: | |||||||||||||||||||
Fixed charges, net of capitalized interest | 521 | 520 | 492 | 461 | 465 | 249 | |||||||||||||
Total earnings available for fixed charges | 1,126 | 1,370 | 1,455 | 1,370 | 1,513 | 840 | |||||||||||||
Fixed charges (1): | |||||||||||||||||||
Interest expense, net | 475 | 555 | 567 | 511 | 464 | 221 | |||||||||||||
Add back interest income, which is netted in interest expense | 1 | 2 | 2 | 2 | 2 | 1 | |||||||||||||
Add back losses on bond repurchases/retirement of subordinated convertible debentures, included in interest expense | (3 | ) | (80 | ) | (123 | ) | (101 | ) | (54 | ) | — | ||||||||
Interest expense—subordinated convertible debentures | 3 | — | — | — | — | — | |||||||||||||
Capitalized interest | — | — | — | — | — | — | |||||||||||||
Interest component of rent expense | 45 | 43 | 46 | 49 | 53 | 27 | |||||||||||||
Fixed charges | $ | 521 | $ | 520 | $ | 492 | $ | 461 | $ | 465 | $ | 249 | |||||||
Ratio of earnings to fixed charges | 2.2x | 2.6x | 3.0x | 3.0x | 3.3x | 3.4x |
(1) | Fixed charges consist of interest expense, which includes amortization of deferred finance charges, interest expense-subordinated debentures, capitalized interest and imputed interest on our lease obligations. The interest component of rent was determined based on an estimate of a reasonable interest factor at the inception of the leases. |
1. | I have reviewed this quarterly report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc. for the quarterly period ended June 30, 2018; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report; |
4. | The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and. |
d) | disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and |
5. | The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of the registrants' board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting. |
/S/ MICHAEL J. KNEELAND |
Michael J. Kneeland |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc. for the quarterly period ended June 30, 2018; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report; |
4. | The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and. |
d) | disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and |
5. | The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of the registrants' board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting. |
/S/ WILLIAM B. PLUMMER |
William B. Plummer |
Chief Financial Officer |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies. |
/S/ MICHAEL J. KNEELAND |
Michael J. Kneeland |
Chief Executive Officer |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies. |
/S/ WILLIAM B. PLUMMER |
William B. Plummer |
Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2018 |
Jul. 16, 2018 |
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Document And Entity Information [Abstract] | ||
Entity Registrant Name | UNITED RENTALS INC /DE | |
Entity Central Index Key | 0001067701 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 82,748,285 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 65 | $ 68 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 112,863,784 | 112,394,395 |
Common stock, shares outstanding | 82,895,244 | 84,463,662 |
Treasury stock, shares | 29,968,540 | 27,930,733 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 270 | $ 141 | $ 453 | $ 250 | ||
Other comprehensive (loss) income, net of tax: | ||||||
Foreign currency translation adjustments | (21) | 25 | (46) | 34 | ||
Fixed price diesel swaps | 1 | 0 | 1 | (1) | ||
Other comprehensive (loss) income | (20) | 25 | (45) | 33 | ||
Comprehensive income (loss) | [1] | $ 250 | $ 166 | $ 408 | $ 283 | |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||
Reclassifications from accumulated other comprehensive income reflected in other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
Tax impact related to foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Taxes associated with other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 6 months ended Jun. 30, 2018 - USD ($) shares in Millions, $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
[2] | |||||
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Balance (shares) at Dec. 31, 2017 | 84 | [1] | (28) | |||||||||
Balance at Dec. 31, 2017 | $ 3,106 | $ 1 | $ 2,356 | $ 3,005 | $ (2,105) | $ (151) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 453 | 453 | ||||||||||
Foreign currency translation adjustments | (46) | (46) | ||||||||||
Fixed price diesel swaps | 1 | 1 | ||||||||||
Stock compensation expense, net (in shares) | [1] | 1 | ||||||||||
Stock compensation expense, net | 43 | |||||||||||
Exercise of common stock options | 2 | |||||||||||
Shares repurchased and retired | (50) | |||||||||||
Repurchase of common stock (in shares) | (2) | [1] | 2 | |||||||||
Repurchase of common stock | $ (345) | |||||||||||
Balance (shares) at Jun. 30, 2018 | 83 | [1] | (30) | |||||||||
Balance at Jun. 30, 2018 | $ 3,164 | $ 1 | $ 2,351 | $ 3,458 | $ (2,450) | $ (196) | ||||||
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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) shares in Millions |
12 Months Ended |
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Dec. 31, 2017
shares
| |
Common Stock | |
Increase in common stock outstanding (in shares, less than) | 1 |
Organization, Description of Business and Basis of Presentation |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Basis of Presentation | 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 and Canada. 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, 2017 (the “2017 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 2017 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. New Accounting Pronouncements Leases. In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance ("Topic 842") to increase transparency and comparability among organizations by requiring (1) recognition of lease assets and lease liabilities on the balance sheet and (2) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: (1) the lessor accounting guidance with certain changes made to the lessee accounting guidance and (2) key aspects of the lessor accounting model with revenue recognition guidance. 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 use the package of practical expedients that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We additionally expect to use the practical expedient that allows us to treat the lease and non-lease components of our leases as a single component for our real estate leases. We expect to adopt this guidance when effective. As discussed in note 2 to our condensed consolidated financial statements, most of our equipment rental revenues, which accounted for 85 percent of total revenues for the six months ended June 30, 2018, will be accounted for under the current lease accounting standard ("Topic 840") until the adoption of Topic 842. 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. 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 as it will depend on market conditions and our forecast expectations upon, and following, adoption. 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 of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing whether we will early adopt. The guidance is not expected to 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, the guidance is not expected to have a significant impact on our financial statements. Guidance Adopted in 2018 Revenue from Contracts with Customers. See note 2 to our condensed consolidated financial statements for a discussion of our revenue recognition accounting following our adoption in the first quarter of 2018 of FASB guidance addressing the principles for recognizing revenue. Statement of Cash Flows. In 2018, we retrospectively adopted guidance that was issued 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 adoption of this guidance did not have a significant impact on our financial statements for the three and six months ended June 30, 2018 or 2017. Intra-Entity Transfers of Assets Other Than Inventory. In 2018, we adopted guidance that requires 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 adoption of this guidance did not have a significant impact on our financial statements. Clarifying the Definition of a Business. In 2018, we adopted guidance that was issued 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 future impact of this guidance will depend on the nature of our future activities, and fewer transactions may be treated as acquisitions (or disposals) of businesses after adoption. Stock Compensation: Scope of Modification Accounting. In 2018, we prospectively adopted guidance that was issued 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. The majority of our modifications relate to the acceleration of vesting conditions. The accounting for such modifications did not change under the adopted guidance, which did not have a significant impact on our financial statements. Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the "Tax Act") was enacted in December 2017. The Act reduced the U.S. federal corporate tax rate from 35 percent to 21 percent, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2017, we were able to determine a reasonable estimate of (1) the effects on our existing deferred tax balances and (2) the one-time transition tax. We recognized a provisional income tax benefit of $689 in the year ended December 31, 2017 associated with these items that we reasonably estimated. As of June 30, 2018, we have not changed the provisional estimates recognized in 2017. The Tax Act subjects U.S. shareholders to a tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. Entities can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. Given the complexity of the GILTI provisions, we are still evaluating the tax impact and have not yet made the accounting policy election. As of June 30, 2018, we were able to reasonably estimate provisional adjustments, based on current year operations only, related to GILTI that we have recognized in our financial statements. In all cases as it relates to the Tax Act, we will continue to refine our calculations as additional analysis is completed and as we gain a more thorough understanding of the tax law. All amounts recognized associated with the Tax Act as of June 30, 2018 are provisional. Given the complexity of the Tax Act, we are still evaluating the tax impact and obtaining the information required to complete the accounting. The date we expect to complete the accounting is not currently determinable while we continue to obtain the information required to complete the accounting. Given the provisional amounts recognized in 2017, and the fact that we have not changed our provisional estimates, the impact of measurement period adjustments was not material during the three and six months ended June 30, 2018. |
Revenue Recognition |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Adoption of Accounting Standards Codification (“ASC”) Topic 606, “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. Topic 606 is an update to Topic 605, which was the revenue recognition standard in effect through December 31, 2017. Topic 606 includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted Topic 606 on January 1, 2018, using the modified retrospective method. The adoption of Topic 606 did not result in any significant changes to our historic revenue accounting under Topic 605. Results for 2018 are presented under Topic 606, while results for 2017 continue to reflect our historic accounting under Topic 605. Because there were no significant changes to our revenue recognition accounting upon adoption of Topic 606, no changes to our historic financial statements were required, and no cumulative change to retained earnings was required. We applied the Topic 606 practical expedient that allows entities to not restate contracts that begin and are completed within the same annual reporting period. No other practical expedients associated with the adoption of Topic 606 were applied. The only change to our revenue accounting upon adoption of Topic 606 pertains to sales of certain rental equipment. Prior to the adoption of Topic 606, certain sales of rental equipment were deferred until certain contingent future events occurred. Under Topic 606, we are no longer required to defer the revenue. The adoption of Topic 606 results in earlier recognition (primarily in the first quarter) of certain sales of rental equipment, but it does not impact total annual revenue because the contingencies that previously resulted in deferral under Topic 605 are always resolved within the same calendar year. During the three months ended June 30, 2017, we recognized $133 of sales of rental equipment under Topic 605. Under Topic 606, sales of rental equipment during the three months ended June 30, 2017 would have been $12 less because such sales would have been recognized prior to the three months ended June 30, 2017. During the six months ended June 30, 2017, we recognized $239 of sales of rental equipment under Topic 605. Under Topic 606, we would have recognized an additional $12 of sales of rental equipment during the six months ended June 30, 2017. As discussed below, following the adoption of Topic 606, we recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 840 (which addresses lease accounting. As discussed below, we expect to adopt an update to this standard on January 1, 2019). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. As reflected below, most of our revenue is accounted for under Topic 840. Our contracts with customers generally do not include multiple performance obligations. For contracts with multiple Topic 606 performance obligations, we allocate revenue to each performance obligation using our best estimate of the standalone selling price for each performance obligation. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard.
Revenues by reportable segment and geographical market are presented in notes 4 and 10 of the condensed consolidated financial statements, respectively, using the revenue captions reflected in our condensed consolidated statements of operations. The majority of our revenue is recognized in our general rentals segment and in the U.S. (for the six months ended June 30, 2018, 83 percent and 92 percent of total revenues, respectively), and, accordingly, we do not believe that presenting the revenue types above by reportable segment or geographical market would provide information that is material to investors. We believe that the disaggregation of our revenue from contracts to customers as reflected above, coupled with the further discussion below and the reportable segment and geographical market disclosures in notes 4 and 10, depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Lease revenues (Topic 840) The accounting for the types of revenue that are accounted for under Topic 840 is discussed below. As discussed in note 1 to the condensed consolidated financial statements, we expect to adopt Topic 842, which is an update to Topic 840, on January 1, 2019. We have tentatively concluded that no significant changes are expected to our revenue accounting upon adoption of Topic 842. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We account for such rentals as operating leases. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 840 and Topic 606/605) of $52 and $46 as of June 30, 2018 and December 31, 2017, respectively. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, and 3) charges for rented equipment that is damaged by our customers. Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is reasonably assured. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 840 (such revenue represented 78 percent of our total revenues for the six months ended June 30, 2018). 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 840, the discussions below on credit risk and our allowances for doubtful accounts address our total revenues from Topic 606 (Topic 605 for 2017) and Topic 840. Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues for the six months ended June 30, 2018, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent of total receivables at June 30, 2018 and December 31, 2017. We manage credit risk through credit approvals, credit limits and other monitoring procedures. We maintain allowances for doubtful accounts. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. During the six months ended June 30, 2018 and 2017, we recognized expenses of $12 and $15, respectively, primarily within selling, general and administrative expenses in our condensed consolidated statements of income, associated with our allowances for doubtful accounts. We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the three or six months ended June 30, 2018 or 2017 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 amount of such revenue recognized during the three and six months ended June 30, 2018 and 2017 was not material. We also do not expect to recognize material revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2018. 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. Sales tax amounts collected from customers are recorded on a net basis. 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:
We monitor and review our estimated standalone selling prices on a regular basis. |
Acquisitions |
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Acquisitions | Acquisitions NES Acquisition In April 2017, we completed the acquisition of NES Rentals Holdings II, Inc. (“NES”). NES was a provider of rental equipment with 73 branches located throughout the eastern half of the U.S., and had approximately 1,100 employees and approximately $900 of rental assets at original equipment cost as of December 31, 2016. NES had annual revenues of approximately $369. The acquisition: •Increased our density in strategically important markets, including the East Coast, Gulf States and the Midwest; •Strengthened our relationships with local and strategic accounts in the construction and industrial sectors, which enhances cross-selling opportunities and drives revenue synergies; and •Created meaningful opportunities for cost synergies in areas such as corporate overhead, operational efficiencies and purchasing. The aggregate consideration paid to holders of NES common stock and options was approximately $960. The acquisition and related fees and expenses were funded through available cash, drawings on our senior secured asset-based revolving credit facility (“ABL facility”) and new debt issuances. The following table summarizes the fair values of the assets acquired and liabilities assumed.
(1) The fair value of accounts receivables acquired was $49, and the gross contractual amount was $53. We estimated that $4 would be uncollectible. (2) The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
(3) The acquired debt reflects capital lease obligations. (4) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of NES's going-concern value, the value of NES's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $1 of goodwill is expected to be deductible for income tax purposes. The three and six months ended June 30, 2018 and 2017 include NES acquisition-related costs which are included in “Merger related costs” in our condensed consolidated statements of income. In addition to the acquisition-related costs reflected in our condensed consolidated statements of income, the debt issuance costs and the original issue premiums associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our condensed consolidated balance sheets. Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired NES locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of NES since the acquisition date. The impact of the NES acquisition on our equipment rentals revenue is primarily reflected in the increase in the volume of OEC on rent of 20.6 percent for the six months ended June 30, 2018 (such increase also includes the impact of the acquisition of Neff Corporation ("Neff") discussed below). Neff Acquisition In October 2017, we completed the acquisition of Neff. Neff was a provider of earthmoving, material handling, aerial and other equipment, and had 69 branches located in 14 states, with a concentration in southern geographies. Neff had approximately 1,100 employees and approximately $860 of rental assets at original equipment cost as of September 30, 2017. Neff had annual revenues of approximately $413. The acquisition augmented our earthmoving capabilities and efficiencies of scale in key market areas, particularly fast-growing southern geographies, and created opportunities for revenue synergies through the cross-selling of our broader fleet. The aggregate consideration paid to holders of Neff common stock and options was approximately $1.316 billion (including $7 of stock consideration associated with Neff stock options and restricted stock units which were converted into United Rentals stock options). The acquisition and related fees and expenses were funded through new debt issuances. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. We do not expect material changes to the assigned values.
(1) The fair value of accounts receivables acquired was $72, and the gross contractual amount was $74. We estimated that $2 would be uncollectible. (2) The customer relationships are being amortized over a 10 year life. (3) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of Neff's going-concern value, the value of Neff's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $320 of goodwill is expected to be deductible for income tax purposes. The three and six months ended June 30, 2018 include Neff acquisition-related costs which are included in “Merger related costs” in our condensed consolidated statements of income. In addition to the acquisition-related costs reflected in our consolidated statements of income, the debt issuance costs and the original issue premiums associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our condensed consolidated balance sheets. Since the acquisition date, significant amounts of fleet have been moved between URI locations and the acquired Neff locations, and it is not practicable to reasonably estimate the amounts of revenue and earnings of Neff since the acquisition date. The impact of the Neff acquisition on our equipment rentals revenue is primarily reflected in the increases in the volume of OEC on rent of 15.9 percent and 20.6 percent for the three and six months ended June 30, 2018, respectively. Such increase for the six months ended June 30, 2018 also includes the impact of the acquisition of NES discussed above (NES was not a significant driver of the increase for the three months ended June 30, 2018 because the OEC from the NES acquisition was included in our results for both the three months ended June 30, 2018 and 2017). Pro forma financial information The pro forma information below gives effect to the NES and Neff acquisitions as if they had been completed on January 1, 2017 (“the pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions, and also does not reflect additional revenue opportunities following the acquisitions. The pro forma information includes adjustments to record the assets and liabilities of NES and Neff at their respective fair values based on available information and to give effect to the financing for the acquisitions and related transactions. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. The acquisition measurement period for NES has ended and the values assigned to the NES assets acquired and liabilities assumed are final. The opening balance sheet values assigned to the Neff assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. We do not expect material changes to the assigned values. The table below presents unaudited pro forma consolidated income statement information as if NES and Neff had been included in our consolidated results for the entire periods reflected:
(1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the NES and Neff acquisitions. (2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the NES and Neff acquisitions. (3) The intangible assets acquired in the NES and Neff acquisitions were amortized. (4) As discussed above, we issued debt to partially fund the NES and Neff acquisitions. Interest expense was adjusted to reflect these changes in our debt portfolio. (5) Historic interest on debt that is not part of the combined entity was eliminated. (6) Merger related costs primarily comprised of financial and legal advisory fees associated with the NES and Neff acquisitions were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. (7) We expect to recognize restructuring charges primarily comprised of severance costs and branch closure charges associated with the acquisitions over a period of approximately one year following the acquisition dates, which, for the pro forma presentation, was January 1, 2017. The adjustments above reflect the timing of the actual restructuring charges following the acquisitions (the pro forma restructuring charges above for the three and six months ended June 30, 2017 reflect the actual restructuring charges recognized during the three and six months following the acquisitions). |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our reportable segments are i) general rentals and ii) trench, power and pump. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of 11 geographic regions—Carolinas, Gulf South, Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Mid Central, Midwest, Northeast, Pacific West, South, Southeast and Western Canada—and operates throughout the United States and Canada. The trench, power and pump 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) pumps primarily used by municipalities, industrial plants, and mining, construction, and agribusiness customers. The trench, power and pump segment is comprised of the following regions, each of which primarily rents the corresponding equipment type described above: i) the Trench Safety region, ii) the Power and HVAC region, and iii) the Pump Solutions region. The trench, power and pump 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 evaluates and allocates resources. We evaluate segment performance based on segment equipment rentals gross profit. The following tables set forth financial information by segment.
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:
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Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | Restructuring Charges Restructuring 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. 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 three restructuring programs and have incurred total restructuring charges of $290. Closed Restructuring Programs We have three closed restructuring programs. The first was initiated in 2008 in recognition of a challenging economic environment and was completed in 2011. The second was initiated following the April 30, 2012 acquisition of RSC Holdings Inc. ("RSC"), and was completed in 2013. The third was initiated 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, we initiated a restructuring program following the closing of the NES acquisition discussed in note 3 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, and the Neff acquisition that is discussed in note 3 to the condensed consolidated financial statements. We expect to complete the restructuring program in the second half of 2018, and do not expect to incur significant additional expenses in connection with the program. The table below provides certain information concerning restructuring activity during the six months ended June 30, 2018:
_________________ (1) Reflected in our condensed consolidated statements of income as “Restructuring charge.” These charges are not allocated to our reportable segments. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements As of June 30, 2018 and December 31, 2017, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include:
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our 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 capital leases approximated their book values as of June 30, 2018 and December 31, 2017. The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of June 30, 2018 and December 31, 2017 have been calculated based upon available market information, and were as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following:
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Loan Covenants and Compliance As of June 30, 2018, we were in compliance with the covenants and other provisions of the ABL facility, the accounts receivable securitization facility 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 June 30, 2018, 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. |
Legal and Regulatory Matters |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | 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. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 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. Net income and earnings per share for 2018 reflect lower effective tax rates due to the enactment of the Tax Act in December 2017, as discussed further below (see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)"). The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
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Condensed Consolidating Financial Information of Guarantor Subsidiaries |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information of Guarantor Subsidiaries | 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 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 covenants in the ABL facility, accounts receivable securitization facility 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 June 30, 2018, the amount available for distribution under the most restrictive of these covenants was $804. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of June 30, 2018, our total available capacity for making share repurchases and dividend payments, which includes URNA’s capacity to make restricted payments and the intercompany receivable balance of Parent, was $2.001 billion. The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2018
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended June 30, 2018
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended June 30, 2017
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Six Months Ended June 30, 2018
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Six Months Ended June 30, 2017
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Six Months Ended June 30, 2018
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Six Months Ended June 30, 2017
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Subsequent Event |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event BakerCorp Acquisition In June 2018, we entered into a definitive merger agreement with BakerCorp International Holdings, Inc. (“BakerCorp”), pursuant to which we have agreed to acquire BakerCorp in an all cash transaction for approximately $715. The merger and related fees and expenses will be funded through available cash and drawings on current debt facilities. BakerCorp is a provider of rental equipment with approximately 950 employees serving customers in North America and Europe. BakerCorp’s operations are primarily concentrated in the United States and Canada, where it has 46 locations, with another 11 locations in France, Germany, the United Kingdom and the Netherlands. BakerCorp has annual revenues of approximately $295. We expect the merger to close early in the third quarter of 2018. Termination of Master Exchange Agreement On July 17, 2018, URNA terminated the Master Exchange Agreement, dated as of January 1, 2009, by and among United Rentals Exchange, LLC, IPX1031 LLC, a Delaware limited liability company, URNA, and United Rentals Northwest, Inc., an Oregon corporation, as amended by Amendment No. 1, dated as of January 1, 2012 (the “Master Exchange Agreement”). A description of the Master Exchange Agreement is set forth in Item 1.01 of URI and URNA’s Form 8-K filed on January 7, 2009. The Master Exchange Agreement was terminated because, as a result of the Tax Act, we are no longer able to defer gains on the sale of property sold after 2017 under the like-kind exchange asset management program under the Master Exchange Agreement. |
Organization, Description of Business and Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
New Accounting Pronouncements | New Accounting Pronouncements Leases. In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance ("Topic 842") to increase transparency and comparability among organizations by requiring (1) recognition of lease assets and lease liabilities on the balance sheet and (2) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: (1) the lessor accounting guidance with certain changes made to the lessee accounting guidance and (2) key aspects of the lessor accounting model with revenue recognition guidance. 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 use the package of practical expedients that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. We additionally expect to use the practical expedient that allows us to treat the lease and non-lease components of our leases as a single component for our real estate leases. We expect to adopt this guidance when effective. As discussed in note 2 to our condensed consolidated financial statements, most of our equipment rental revenues, which accounted for 85 percent of total revenues for the six months ended June 30, 2018, will be accounted for under the current lease accounting standard ("Topic 840") until the adoption of Topic 842. 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. 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 as it will depend on market conditions and our forecast expectations upon, and following, adoption. 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 of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing whether we will early adopt. The guidance is not expected to 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, the guidance is not expected to have a significant impact on our financial statements. Guidance Adopted in 2018 Revenue from Contracts with Customers. See note 2 to our condensed consolidated financial statements for a discussion of our revenue recognition accounting following our adoption in the first quarter of 2018 of FASB guidance addressing the principles for recognizing revenue. Statement of Cash Flows. In 2018, we retrospectively adopted guidance that was issued 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 adoption of this guidance did not have a significant impact on our financial statements for the three and six months ended June 30, 2018 or 2017. Intra-Entity Transfers of Assets Other Than Inventory. In 2018, we adopted guidance that requires 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 adoption of this guidance did not have a significant impact on our financial statements. Clarifying the Definition of a Business. In 2018, we adopted guidance that was issued 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 future impact of this guidance will depend on the nature of our future activities, and fewer transactions may be treated as acquisitions (or disposals) of businesses after adoption. Stock Compensation: Scope of Modification Accounting. In 2018, we prospectively adopted guidance that was issued 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. The majority of our modifications relate to the acceleration of vesting conditions. The accounting for such modifications did not change under the adopted guidance, which did not have a significant impact on our financial statements. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, and 3) charges for rented equipment that is damaged by our customers. Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is reasonably assured. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 840 (such revenue represented 78 percent of our total revenues for the six months ended June 30, 2018). 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 840, the discussions below on credit risk and our allowances for doubtful accounts address our total revenues from Topic 606 (Topic 605 for 2017) and Topic 840. 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 amount of such revenue recognized during the three and six months ended June 30, 2018 and 2017 was not material. We also do not expect to recognize material revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2018. 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. Sales tax amounts collected from customers are recorded on a net basis. 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:
We monitor and review our estimated standalone selling prices on a regular basis. Adoption of Accounting Standards Codification (“ASC”) Topic 606, “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. Topic 606 is an update to Topic 605, which was the revenue recognition standard in effect through December 31, 2017. Topic 606 includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted Topic 606 on January 1, 2018, using the modified retrospective method. The adoption of Topic 606 did not result in any significant changes to our historic revenue accounting under Topic 605. Results for 2018 are presented under Topic 606, while results for 2017 continue to reflect our historic accounting under Topic 605. Because there were no significant changes to our revenue recognition accounting upon adoption of Topic 606, no changes to our historic financial statements were required, and no cumulative change to retained earnings was required. We applied the Topic 606 practical expedient that allows entities to not restate contracts that begin and are completed within the same annual reporting period. No other practical expedients associated with the adoption of Topic 606 were applied. The only change to our revenue accounting upon adoption of Topic 606 pertains to sales of certain rental equipment. Prior to the adoption of Topic 606, certain sales of rental equipment were deferred until certain contingent future events occurred. Under Topic 606, we are no longer required to defer the revenue. The adoption of Topic 606 results in earlier recognition (primarily in the first quarter) of certain sales of rental equipment, but it does not impact total annual revenue because the contingencies that previously resulted in deferral under Topic 605 are always resolved within the same calendar year. Lease revenues (Topic 840) The accounting for the types of revenue that are accounted for under Topic 840 is discussed below. As discussed in note 1 to the condensed consolidated financial statements, we expect to adopt Topic 842, which is an update to Topic 840, on January 1, 2019. We have tentatively concluded that no significant changes are expected to our revenue accounting upon adoption of Topic 842. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We account for such rentals as operating leases. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We maintain allowances for doubtful accounts. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. As discussed below, following the adoption of Topic 606, we recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 840 (which addresses lease accounting. As discussed below, we expect to adopt an update to this standard on January 1, 2019). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. As reflected below, most of our revenue is accounted for under Topic 840. Our contracts with customers generally do not include multiple performance obligations. For contracts with multiple Topic 606 performance obligations, we allocate revenue to each performance obligation using our best estimate of the standalone selling price for each performance obligation. |
Revenue Recognition (Tables) |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accounting principles | In the following table, revenue is summarized by type and by the applicable accounting standard.
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Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. We do not expect material changes to the assigned values.
(1) The fair value of accounts receivables acquired was $72, and the gross contractual amount was $74. We estimated that $2 would be uncollectible. (2) The customer relationships are being amortized over a 10 year life. (3) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of Neff's going-concern value, the value of Neff's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $320 of goodwill is expected to be deductible for income tax purposes. The following table summarizes the fair values of the assets acquired and liabilities assumed.
(1) The fair value of accounts receivables acquired was $49, and the gross contractual amount was $53. We estimated that $4 would be uncollectible. (2) The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
(3) The acquired debt reflects capital lease obligations. (4) All of the goodwill was assigned to our general rentals segment. The level of goodwill that resulted from the acquisition is primarily reflective of NES's going-concern value, the value of NES's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $1 of goodwill is expected to be deductible for income tax purposes. |
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Schedule of intangible assets acquired | The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments:
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Summary of business acquisition, pro forma information | The table below presents unaudited pro forma consolidated income statement information as if NES and Neff had been included in our consolidated results for the entire periods reflected:
(1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the NES and Neff acquisitions. (2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the NES and Neff acquisitions. (3) The intangible assets acquired in the NES and Neff acquisitions were amortized. (4) As discussed above, we issued debt to partially fund the NES and Neff acquisitions. Interest expense was adjusted to reflect these changes in our debt portfolio. (5) Historic interest on debt that is not part of the combined entity was eliminated. (6) Merger related costs primarily comprised of financial and legal advisory fees associated with the NES and Neff acquisitions were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. (7) We expect to recognize restructuring charges primarily comprised of severance costs and branch closure charges associated with the acquisitions over a period of approximately one year following the acquisition dates, which, for the pro forma presentation, was January 1, 2017. The adjustments above reflect the timing of the actual restructuring charges following the acquisitions (the pro forma restructuring charges above for the three and six months ended June 30, 2017 reflect the actual restructuring charges recognized during the three and six months following the acquisitions). |
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information by segment | The following tables set forth financial information by segment.
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Reconciliation to equipment rentals gross profit | The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes:
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Restructuring Charges (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring reserve by type of cost | The table below provides certain information concerning restructuring activity during the six months ended June 30, 2018:
_________________ (1) Reflected in our condensed consolidated statements of income as “Restructuring charge.” These charges are not allocated to our reportable segments. |
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of June 30, 2018 and December 31, 2017 have been calculated based upon available market information, and were as follows:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following:
___________________
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
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Condensed Consolidating Financial Information of Guarantor Subsidiaries (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2018
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017
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CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME |
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended June 30, 2017
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Six Months Ended June 30, 2018
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Six Months Ended June 30, 2017
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CONDENSED CONSOLIDATING CASH FLOW INFORMATION | CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Six Months Ended June 30, 2018
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Six Months Ended June 30, 2017
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Organization, Description of Business and Basis of Presentation (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
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Jun. 30, 2018 |
Dec. 31, 2017 |
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Business Acquisition [Line Items] | ||
Provisional income tax benefit | $ 689 | |
Owned equipment rentals | Equipment rental revenue | Product concentration risk | ||
Business Acquisition [Line Items] | ||
Concentration risk, percentage | 85.00% |
Acquisitions (Assets Acquired and Liabilities Assumed - NES Acquisition) (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
Apr. 30, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 4,096 | $ 4,082 | |
NES Rentals Holdings II, Inc. | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net of allowance for doubtful accounts | $ 49 | ||
Inventory | 4 | ||
Rental equipment | 571 | ||
Property and equipment | 48 | ||
Intangibles | 139 | ||
Other assets | 7 | ||
Total identifiable assets acquired | 818 | ||
Short-term debt and current maturities of long-term debt | (3) | ||
Current liabilities | (33) | ||
Deferred taxes | (15) | ||
Long-term debt | (11) | ||
Other long-term liabilities | (5) | ||
Total liabilities assumed | (67) | ||
Net identifiable assets acquired | 751 | ||
Goodwill | 209 | ||
Net assets acquired | 960 | ||
Gross contractual amount | 53 | ||
Estimated amount uncollectible | 4 | ||
Goodwill, amount expected to be deductible for income tax purposes | $ 1 |
Acquisitions (Acquired Intangible Assets) (Details) - NES Rentals Holdings II, Inc. $ in Millions |
1 Months Ended |
---|---|
Apr. 30, 2017
USD ($)
| |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 139 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 138 |
Life (years) | 10 years |
Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 1 |
Life (years) | 1 year |
Acquisitions (Assets Acquired and Liabilities Assumed - Neff Acquisition) (Details) - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Oct. 31, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Business Acquisition [Line Items] | |||
Goodwill | $ 4,096 | $ 4,082 | |
Neff Corporation | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net of allowance for doubtful accounts | $ 72 | ||
Inventory | 5 | ||
Rental equipment | 550 | ||
Property and equipment | 45 | ||
Intangibles (customer relationships) | 153 | ||
Other assets | 5 | ||
Total identifiable assets acquired | 830 | ||
Current liabilities | (61) | ||
Deferred taxes | (35) | ||
Other long-term liabilities | (3) | ||
Total liabilities assumed | (99) | ||
Net identifiable assets acquired | 731 | ||
Goodwill | 585 | ||
Net assets acquired | 1,316 | ||
Gross contractual amount | 74 | ||
Estimated amount uncollectible | 2 | ||
Goodwill, amount expected to be deductible for income tax purposes | $ 320 | ||
Customer relationships | Neff Corporation | |||
Business Acquisition [Line Items] | |||
Life (years) | 10 years |
Restructuring Charges (Narrative) (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
work_stream
restructuring_program
| |
Restructuring Cost and Reserve | |
Restructuring costs incurred to date | $ | $ 290 |
Closed Restructuring Programs | |
Restructuring Cost and Reserve | |
Number of restructuring programs | restructuring_program | 3 |
NES/Neff/Project XL Restructuring Program | |
Restructuring Cost and Reserve | |
Number of specific work streams | work_stream | 8 |
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 7,010 | $ 7,008 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,907 | $ 7,340 |
Debt (Narrative) (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Line of Credit | ABL Facility | |
Debt Instrument | |
Minimum available borrowing capacity, percentage | 10.00% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Numerator: | ||||
Net income available to common stockholders | $ 270 | $ 141 | $ 453 | $ 250 |
Denominator: | ||||
Denominator for basic earnings per share—weighted-average common shares (in shares) | 83,456 | 84,635 | 83,854 | 84,546 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share—adjusted weighted-average common shares (in shares) | 84,199 | 85,408 | 84,723 | 85,401 |
Basic earnings per share (in dollars per share) | $ 3.22 | $ 1.67 | $ 5.40 | $ 2.95 |
Diluted earnings per share (in dollars per share) | $ 3.20 | $ 1.65 | $ 5.34 | $ 2.92 |
Employee stock options | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 370 | 394 | 393 | 403 |
Restricted stock units | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 373 | 379 | 476 | 452 |
Condensed Consolidating Financial Information of Guarantor Subsidiaries - CONDENSED CONSOLIDATING CASH FLOW INFORMATION (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ 1,649 | $ 1,329 |
Net cash used in investing activities | (1,005) | (1,684) |
Net cash (used in) provided by financing activities | (870) | 370 |
Effect of foreign exchange rates | (9) | 11 |
Net (decrease) increase in cash and cash equivalents | (235) | 26 |
Cash and cash equivalents at beginning of period | 352 | 312 |
Cash and cash equivalents at end of period | 117 | 338 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Parent | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 12 | 10 |
Net cash used in investing activities | (12) | (10) |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
URNA | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 1,714 | 1,297 |
Net cash used in investing activities | (920) | (1,624) |
Net cash (used in) provided by financing activities | (773) | 315 |
Effect of foreign exchange rates | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 21 | (12) |
Cash and cash equivalents at beginning of period | 23 | 21 |
Cash and cash equivalents at end of period | 44 | 9 |
Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (1) | (1) |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 1 | 1 |
Effect of foreign exchange rates | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Non-Guarantor Subsidiaries - Foreign | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (66) | 78 |
Net cash used in investing activities | (73) | (50) |
Net cash (used in) provided by financing activities | (108) | (1) |
Effect of foreign exchange rates | (9) | 11 |
Net (decrease) increase in cash and cash equivalents | (256) | 38 |
Cash and cash equivalents at beginning of period | 329 | 291 |
Cash and cash equivalents at end of period | 73 | 329 |
Non-Guarantor Subsidiaries - SPV | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (10) | (55) |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 10 | 55 |
Effect of foreign exchange rates | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |
Subsequent Event (Details) $ in Millions |
4 Months Ended | |
---|---|---|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
employee
location
|
|
BakerCorp International Holdings, Inc | ||
Subsequent Event [Line Items] | ||
Number of employees | employee | 950 | |
BakerCorp International Holdings, Inc | United States And Canada | ||
Subsequent Event [Line Items] | ||
Number of rental locations (branch) | location | 46 | |
BakerCorp International Holdings, Inc | France, Germany, United Kingdom And Netherlands | ||
Subsequent Event [Line Items] | ||
Number of rental locations (branch) | location | 11 | |
Scenario, Forecast | BakerCorp International Holdings, Inc | ||
Subsequent Event [Line Items] | ||
Aggregate consideration paid | $ | $ 715 | |
Revenues | $ | $ 295 |
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