QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-0933835 | |||||||
(States of Incorporation) | (I.R.S. Employer Identification Nos.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated Filer | ☐ | |||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||||||||
Emerging Growth Company |
Page | ||||||||
PART I | ||||||||
Item 1 | ||||||||
Item 2 | ||||||||
Item 3 | ||||||||
Item 4 | ||||||||
PART II | ||||||||
Item 1 | ||||||||
Item 1A | ||||||||
Item 2 | ||||||||
Item 5 | ||||||||
Item 6 | ||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total current assets | |||||||||||
Rental equipment, net | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Short-term debt and current maturities of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred taxes | |||||||||||
Operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Common stock—$ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock at cost— | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenues: | |||||||||||
Equipment rentals | $ | $ | |||||||||
Sales of rental equipment | |||||||||||
Sales of new equipment | |||||||||||
Contractor supplies sales | |||||||||||
Service and other revenues | |||||||||||
Total revenues | |||||||||||
Cost of revenues: | |||||||||||
Cost of equipment rentals, excluding depreciation | |||||||||||
Depreciation of rental equipment | |||||||||||
Cost of rental equipment sales | |||||||||||
Cost of new equipment sales | |||||||||||
Cost of contractor supplies sales | |||||||||||
Cost of service and other revenues | |||||||||||
Total cost of revenues | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Restructuring charge | |||||||||||
Non-rental depreciation and amortization | |||||||||||
Operating income | |||||||||||
Interest expense, net | |||||||||||
Other income, net | ( | ( | |||||||||
Income before provision for income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | $ | $ | |||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Foreign currency translation adjustments (1) | ( | ||||||||||
Fixed price diesel swaps | ( | ||||||||||
Other comprehensive (loss) income (1) | ( | ||||||||||
Comprehensive income | $ | $ |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
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, 2023 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Dividends declared (3) | ( | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||||||||||||||||||||||||||
Stock compensation expense, net | — | ||||||||||||||||||||||||||||||||||||||||
Tax withholding for share based compensation | — | ( | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | ( |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
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, 2022 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||
Dividends declared (3) | ( | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||||||||||||||||||||||||||
Fixed price diesel swaps | ( | ||||||||||||||||||||||||||||||||||||||||
Stock compensation expense, net | |||||||||||||||||||||||||||||||||||||||||
Tax withholding for share based compensation | — | ( | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | ( |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred financing costs and original issue discounts | |||||||||||
Gain on sales of rental equipment | ( | ( | |||||||||
Gain on sales of non-rental equipment | ( | ( | |||||||||
Insurance proceeds from damaged equipment | ( | ( | |||||||||
Stock compensation expense, net | |||||||||||
Restructuring charge | |||||||||||
Loss on repurchase/redemption/amendment of debt securities | |||||||||||
(Decrease) increase in deferred taxes | ( | ||||||||||
Changes in operating assets and liabilities, net of amounts acquired: | |||||||||||
Decrease (increase) in accounts receivable | ( | ||||||||||
Increase in inventory | ( | ( | |||||||||
Decrease in prepaid expenses and other assets | |||||||||||
Decrease in accounts payable | ( | ( | |||||||||
Decrease in accrued expenses and other liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash Flows From Investing Activities: | |||||||||||
Payments for purchases of rental equipment | ( | ( | |||||||||
Payments for purchases of non-rental equipment and intangible assets | ( | ( | |||||||||
Proceeds from sales of rental equipment | |||||||||||
Proceeds from sales of non-rental equipment | |||||||||||
Insurance proceeds from damaged equipment | |||||||||||
Purchases of other companies, net of cash acquired | ( | ( | |||||||||
Purchases of investments | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows From Financing Activities: | |||||||||||
Proceeds from debt | |||||||||||
Payments of debt | ( | ( | |||||||||
Common stock repurchased, including tax withholdings for share based compensation | ( | ( | |||||||||
Payments of financing costs | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of foreign exchange rates | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for income taxes, net | $ | $ | |||||||||
Cash paid for interest |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
Topic 842 | Topic 606 | Total | Topic 842 | Topic 606 | Total | ||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Owned equipment rentals | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||
Re-rent revenue | — | — | |||||||||||||||||||||||||||||||||
Ancillary and other rental revenues: | |||||||||||||||||||||||||||||||||||
Delivery and pick-up | — | — | |||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Total ancillary and other rental revenues | |||||||||||||||||||||||||||||||||||
Total equipment rentals | |||||||||||||||||||||||||||||||||||
Sales of rental equipment | — | — | |||||||||||||||||||||||||||||||||
Sales of new equipment | — | — | |||||||||||||||||||||||||||||||||
Contractor supplies sales | — | — | |||||||||||||||||||||||||||||||||
Service and other revenues | — | — | |||||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | ||||||||||
Beginning balance | $ | $ | |||||||||
Charged to costs and expenses (1) | |||||||||||
Charged to revenue (2) | |||||||||||
Deductions and other (3) | ( | ( | |||||||||
Ending balance | $ | $ |
Accounts receivable (1) | $ | ||||
Rental equipment | |||||
Property and equipment | |||||
Operating lease right-of-use assets | |||||
Other assets | |||||
Total identifiable assets acquired | |||||
Accounts payable, accrued expenses and other liabilities | ( | ||||
Operating lease liabilities | ( | ||||
Total liabilities assumed | ( | ||||
Net identifiable assets acquired | |||||
Goodwill (2) | |||||
Net assets acquired | $ |
Three Months Ended | ||||||||
March 31, | ||||||||
2023 | ||||||||
United Rentals historic revenue | $ | |||||||
Yak historic revenue (1) | ||||||||
Pro forma revenue | ||||||||
General rentals | Specialty | Total | |||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||
Equipment rentals | $ | $ | $ | ||||||||||||||
Sales of rental equipment | |||||||||||||||||
Sales of new equipment | |||||||||||||||||
Contractor supplies sales | |||||||||||||||||
Service and other revenues | |||||||||||||||||
Total revenue | |||||||||||||||||
Depreciation and amortization expense | |||||||||||||||||
Equipment rentals gross profit | |||||||||||||||||
Capital expenditures (1) | |||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
Equipment rentals | $ | $ | $ | ||||||||||||||
Sales of rental equipment | |||||||||||||||||
Sales of new equipment | |||||||||||||||||
Contractor supplies sales | |||||||||||||||||
Service and other revenues | |||||||||||||||||
Total revenue | |||||||||||||||||
Depreciation and amortization expense | |||||||||||||||||
Equipment rentals gross profit | |||||||||||||||||
Capital expenditures (1) |
March 31, 2024 | December 31, 2023 | ||||||||||
Total reportable segment assets | |||||||||||
General rentals | $ | $ | |||||||||
Specialty (1) | |||||||||||
Total assets | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Total equipment rentals gross profit | $ | $ | |||||||||
Gross profit from other lines of business | |||||||||||
Selling, general and administrative expenses | ( | ( | |||||||||
Restructuring charge (1) | ( | ( | |||||||||
Non-rental depreciation and amortization | ( | ( | |||||||||
Interest expense, net | ( | ( | |||||||||
Other income, net | |||||||||||
Income before provision for income taxes | $ | $ |
General rentals | Specialty | Total | |||||||||||||||
Balance at January 1, 2024 (1) | $ | $ | $ | ||||||||||||||
Goodwill related to acquisitions (2) | |||||||||||||||||
Foreign currency translation and other adjustments | ( | ( | ( | ||||||||||||||
Balance at March 31, 2024 (1) | $ | $ | $ |
March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
Weighted-Average Remaining Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Amount | ||||||||||||||||||||||||||||||||||||||
Non-compete agreements | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Trade names and associated trademarks | $ | $ | $ |
December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
Weighted-Average Remaining Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Amount | ||||||||||||||||||||||||||||||||||||||
Non-compete agreements | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Trade names and associated trademarks | $ | $ | $ |
2024 | $ | ||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
Thereafter | |||||||||||
Total | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Senior notes | $ | $ | $ | $ | |||||||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
Repurchase facility expiring 2024 (1) | $ | $ | |||||||||
Accounts receivable securitization facility expiring 2024 (1) (2) | |||||||||||
$ | |||||||||||
Term loan facility expiring 2031 (1) (3) | |||||||||||
5 1/2 percent Senior Notes due 2027 | |||||||||||
3 7/8 percent Senior Secured Notes due 2027 | |||||||||||
4 7/8 percent Senior Notes due 2028 (4) | |||||||||||
5 1/4 percent Senior Notes due 2030 | |||||||||||
3 7/8 percent Senior Notes due 2031 | |||||||||||
3 3/4 percent Senior Notes due 2032 | |||||||||||
6 1/8 percent Senior Notes due 2034 (5) | |||||||||||
Finance leases | |||||||||||
Total debt | |||||||||||
Less short-term portion (6) | ( | ( | |||||||||
Total long-term debt | $ | $ |
ABL facility | Accounts receivable securitization facility | Term loan facility | |||||||||||||||
Borrowing capacity, net of letters of credit | $ | $ | $ | ||||||||||||||
Letters of credit | |||||||||||||||||
Interest rate at March 31, 2024 | % | % | % | ||||||||||||||
Average month-end debt outstanding | |||||||||||||||||
Weighted-average interest rate on average debt outstanding | % | % | % | ||||||||||||||
Maximum month-end debt outstanding |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Numerator: | |||||||||||
Net income available to common stockholders | |||||||||||
Denominator: | |||||||||||
Denominator for basic earnings per share—weighted-average common shares | |||||||||||
Effect of dilutive securities: | |||||||||||
Employee stock options | |||||||||||
Restricted stock units | |||||||||||
Denominator for diluted earnings per share—adjusted weighted-average common shares | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net income | $ | 542 | $ | 451 | |||||||
Diluted earnings per share | $ | 8.04 | $ | 6.47 |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Tax rate applied to items below | 25.2 | % | 25.3 | % | |||||||||||||||||||
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 intangible asset amortization (1) | $ | (33) | $ | (0.49) | $ | (49) | $ | (0.70) | |||||||||||||||
Impact on depreciation related to acquired fleet and property and equipment (2) | (27) | (0.40) | (22) | (0.32) | |||||||||||||||||||
Impact of the fair value mark-up of acquired fleet (3) | (13) | (0.19) | (31) | (0.44) | |||||||||||||||||||
Restructuring charge (4) | (1) | (0.01) | (1) | (0.02) | |||||||||||||||||||
Asset impairment charge (5) | — | (0.01) | — | — | |||||||||||||||||||
Loss on repurchase/redemption/amendment of debt securities | (1) | (0.01) | — | — | |||||||||||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net income | $ | 542 | $ | 451 | |||||||
Provision for income taxes | 153 | 143 | |||||||||
Interest expense, net | 160 | 150 | |||||||||
Depreciation of rental equipment | 582 | 575 | |||||||||
Non-rental depreciation and amortization | 104 | 118 | |||||||||
EBITDA | $ | 1,541 | $ | 1,437 | |||||||
Restructuring charge (1) | 1 | 1 | |||||||||
Stock compensation expense, net (2) | 28 | 24 | |||||||||
Impact of the fair value mark-up of acquired fleet (3) | 17 | 41 | |||||||||
Adjusted EBITDA | $ | 1,587 | $ | 1,503 | |||||||
Net income margin | 15.6 | % | 13.7 | % | |||||||
Adjusted EBITDA margin | 45.5 | % | 45.8 | % |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash provided by operating activities | $ | 1,029 | $ | 939 | |||||||
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 | (4) | (4) | |||||||||
Gain on sales of rental equipment | 187 | 190 | |||||||||
Gain on sales of non-rental equipment | 3 | 4 | |||||||||
Insurance proceeds from damaged equipment | 13 | 9 | |||||||||
Restructuring charge (1) | (1) | (1) | |||||||||
Stock compensation expense, net (2) | (28) | (24) | |||||||||
Loss on repurchase/redemption/amendment of debt securities | (1) | — | |||||||||
Changes in assets and liabilities | 17 | 117 | |||||||||
Cash paid for interest | 195 | 178 | |||||||||
Cash paid for income taxes, net | 131 | 29 | |||||||||
EBITDA | $ | 1,541 | $ | 1,437 | |||||||
Add back: | |||||||||||
Restructuring charge (1) | 1 | 1 | |||||||||
Stock compensation expense, net (2) | 28 | 24 | |||||||||
Impact of the fair value mark-up of acquired fleet (3) | 17 | 41 | |||||||||
Adjusted EBITDA | $ | 1,587 | $ | 1,503 |
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Equipment rentals* | $ | 2,929 | $ | 2,740 | 6.9 | % | |||||||||||
Sales of rental equipment | 383 | 388 | (1.3) | % | |||||||||||||
Sales of new equipment | 48 | 44 | 9.1 | % | |||||||||||||
Contractor supplies sales | 36 | 34 | 5.9 | % | |||||||||||||
Service and other revenues | 89 | 79 | 12.7 | % | |||||||||||||
Total revenues | $ | 3,485 | $ | 3,285 | 6.1 | % | |||||||||||
*Equipment rentals variance components: | |||||||||||||||||
Year-over-year change in average OEC | 3.6 | % | |||||||||||||||
Assumed year-over-year inflation impact (1) | (1.5) | % | |||||||||||||||
Fleet productivity (2) | 4.0 | % | |||||||||||||||
Contribution from ancillary and re-rent revenue (3) | 0.8 | % | |||||||||||||||
Total change in equipment rentals | 6.9 | % | |||||||||||||||
General rentals | Specialty | Total | |||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||
Equipment rentals | $ | 2,070 | $ | 859 | $ | 2,929 | |||||||||||
Sales of rental equipment | 346 | 37 | 383 | ||||||||||||||
Sales of new equipment | 29 | 19 | 48 | ||||||||||||||
Contractor supplies sales | 20 | 16 | 36 | ||||||||||||||
Service and other revenues | 81 | 8 | 89 | ||||||||||||||
Total revenue | $ | 2,546 | $ | 939 | $ | 3,485 | |||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
Equipment rentals | $ | 2,018 | $ | 722 | $ | 2,740 | |||||||||||
Sales of rental equipment | 350 | 38 | 388 | ||||||||||||||
Sales of new equipment | 18 | 26 | 44 | ||||||||||||||
Contractor supplies sales | 21 | 13 | 34 | ||||||||||||||
Service and other revenues | 72 | 7 | 79 | ||||||||||||||
Total revenue | $ | 2,479 | $ | 806 | $ | 3,285 |
General rentals | Specialty | Total | |||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||
Equipment Rentals Gross Profit | $ | 681 | $ | 422 | $ | 1,103 | |||||||||||
Equipment Rentals Gross Margin | 32.9 | % | 49.1 | % | 37.7 | % | |||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
Equipment Rentals Gross Profit | $ | 663 | $ | 340 | $ | 1,003 | |||||||||||
Equipment Rentals Gross Margin | 32.9 | % | 47.1 | % | 36.6 | % |
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
Total gross margin | 38.6% | 37.8% | 80 bps | ||||||||||||||
Equipment rentals | 37.7% | 36.6% | 110 bps | ||||||||||||||
Sales of rental equipment | 48.8% | 49.0% | (20) bps | ||||||||||||||
Sales of new equipment | 20.8% | 18.2% | 260 bps | ||||||||||||||
Contractor supplies sales | 30.6% | 29.4% | 120 bps | ||||||||||||||
Service and other revenues | 39.3% | 38.0% | 130 bps |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | Change | ||||||||||||
Selling, general and administrative ("SG&A") expense | $389 | $382 | 1.8% | |||||||||||
SG&A expense as a percentage of revenue | 11.2% | 11.6% | (40) bps | |||||||||||
Restructuring charge | 1 | 1 | —% | |||||||||||
Non-rental depreciation and amortization | 104 | 118 | (11.9)% | |||||||||||
Interest expense, net | 160 | 150 | 6.7% | |||||||||||
Other income, net | (3) | (4) | (25.0)% | |||||||||||
Provision for income taxes | 153 | 143 | 7.0% | |||||||||||
Effective tax rate | 22.0% | 24.1% | (210) bps | |||||||||||
ABL facility: | |||||
Borrowing capacity, net of letters of credit | $ | 2,853 | |||
Outstanding debt, net of debt issuance costs | 1,371 | ||||
Interest rate at March 31, 2024 | 6.5 | % | |||
Average month-end principal amount of debt outstanding | 1,346 | ||||
Weighted-average interest rate on average debt outstanding | 6.5 | % | |||
Maximum month-end principal amount of debt outstanding | 1,457 | ||||
Accounts receivable securitization facility (1): | |||||
Borrowing capacity | 279 | ||||
Outstanding debt, net of debt issuance costs | 1,021 | ||||
Interest rate at March 31, 2024 | 6.3 | % | |||
Average month-end principal amount of debt outstanding | 1,093 | ||||
Weighted-average interest rate on average debt outstanding | 6.3 | % | |||
Maximum month-end principal amount of debt outstanding | 1,132 |
2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |||||||||||||||||
Debt and finance leases (1) | $ | 1,077 | $ | 65 | $ | 52 | $ | 2,664 | $ | 1,688 | $ | 6,937 | $ | 12,483 | |||||||||
Interest due on debt (2) | 469 | 602 | 601 | 533 | 371 | 854 | 3,430 | ||||||||||||||||
Operating leases (1) | 239 | 286 | 248 | 197 | 144 | 312 | 1,426 | ||||||||||||||||
Purchase obligations (3) | 3,843 | 28 | — | — | — | — | 3,871 | ||||||||||||||||
Total | $ | 5,628 | $ | 981 | $ | 901 | $ | 3,394 | $ | 2,203 | $ | 8,103 | $ | 21,210 |
Corporate Rating | Outlook | ||||||||||
Moody’s | Ba1 | Stable | |||||||||
Standard & Poor’s | BB+ | Stable |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash provided by operating activities | $ | 1,029 | $ | 939 | |||||||
Payments for purchases of rental equipment | (511) | (797) | |||||||||
Payments for purchases of non-rental equipment and intangible assets | (58) | (73) | |||||||||
Proceeds from sales of rental equipment | 383 | 388 | |||||||||
Proceeds from sales of non-rental equipment | 13 | 12 | |||||||||
Insurance proceeds from damaged equipment | 13 | 9 | |||||||||
Free cash flow | $ | 869 | $ | 478 |
March 31, 2024 | |||||
Current receivable from non-guarantor subsidiaries | $4 | ||||
Other current assets | 386 | ||||
Total current assets | 390 | ||||
Long-term receivable from non-guarantor subsidiaries | 100 | ||||
Other long-term assets | 21,640 | ||||
Total long-term assets | 21,740 | ||||
Total assets | 22,130 | ||||
Current liabilities | 2,147 | ||||
Long-term liabilities | 14,804 | ||||
Total liabilities | 16,951 | ||||
Three Months Ended March 31, 2024 | |||||
Total revenues | $3,175 | ||||
Gross profit | 1,246 | ||||
Net income | 495 | ||||
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) | |||||||||||||||||||
January 1, 2024 to January 31, 2024 | 122,211 | (1) | $ | 563.68 | 98,889 | ||||||||||||||||||
February 1, 2024 to February 29, 2024 | 92,211 | (1) | $ | 651.92 | 91,553 | ||||||||||||||||||
March 1, 2024 to March 31, 2024 | 411,453 | (1) | $ | 695.41 | 373,885 | ||||||||||||||||||
Total | 625,875 | $ | 663.28 | 564,327 | $ | 1,374,999,648 |
UNITED RENTALS, INC. | ||||||||||||||
Dated: | April 24, 2024 | By: | /S/ ANDREW B. LIMOGES | |||||||||||
Andrew B. Limoges Vice President, Controller and Principal Accounting Officer | ||||||||||||||
UNITED RENTALS (NORTH AMERICA), INC. | ||||||||||||||
Dated: | April 24, 2024 | By: | /S/ ANDREW B. LIMOGES | |||||||||||
Andrew B. Limoges Vice President, Controller and Principal Accounting Officer | ||||||||||||||
/S/ MATTHEW J. FLANNERY | ||
Matthew J. Flannery | ||
Chief Executive Officer |
/S/ WILLIAM E. GRACE | ||
William E. Grace | ||
Chief Financial Officer |
/S/ MATTHEW J. FLANNERY | ||
Matthew J. Flannery | ||
Chief Executive Officer |
/S/ WILLIAM E. GRACE | ||
William E. Grace | ||
Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 115,101,951 | 115,010,396 |
Common stock, shares outstanding (in shares) | 66,796,805 | 67,269,577 |
Treasury stock, shares (in shares) | 48,305,146 | 47,740,819 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 542 | $ 451 | ||
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments | [1] | (51) | 1 | |
Fixed price diesel swaps | 0 | (1) | ||
Other comprehensive (loss) income | [1] | (51) | 0 | |
Comprehensive income (loss) | $ 491 | $ 451 | ||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Reclassification from AOCI, current period, net of tax, attributable to parent | $ 0 | $ 0 |
Other comprehensive income (loss), tax, portion attributable to parent | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive Loss |
[2] | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance (in shares) at Dec. 31, 2022 | [1] | 69,000,000 | |||||||||||||||
Balance at Dec. 31, 2022 | $ 1 | $ 2,626 | $ 9,656 | $ (4,957) | $ (264) | ||||||||||||
Balance (in shares) at Dec. 31, 2022 | 45,000,000 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income | $ 451 | 451 | |||||||||||||||
Dividends declared | [3] | (104) | |||||||||||||||
Foreign currency translation adjustments | 1 | [4] | 1 | ||||||||||||||
Fixed price diesel swaps | $ (1) | (1) | |||||||||||||||
Stock compensation expense, net (in shares) | [1] | 1,000,000 | |||||||||||||||
Stock compensation expense, net | 24 | ||||||||||||||||
Tax withholding for share based compensation | (52) | ||||||||||||||||
Repurchase of common stock (in shares) | (1,000,000) | [1] | (1,000,000) | ||||||||||||||
Repurchase of common stock | $ (251) | ||||||||||||||||
Balance (in shares) at Mar. 31, 2023 | [1] | 69,000,000 | |||||||||||||||
Balance at Mar. 31, 2023 | $ 1 | 2,598 | 10,003 | $ (5,208) | (264) | ||||||||||||
Balance (in shares) at Mar. 31, 2023 | 46,000,000 | ||||||||||||||||
Balance (in shares) at Dec. 31, 2023 | 67,269,577 | 67,000,000 | [1] | ||||||||||||||
Balance at Dec. 31, 2023 | $ 8,130 | $ 1 | 2,650 | 11,672 | $ (5,965) | (228) | |||||||||||
Balance (in shares) at Dec. 31, 2023 | 47,740,819 | 48,000,000 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net income | $ 542 | 542 | |||||||||||||||
Dividends declared | [3] | (111) | |||||||||||||||
Foreign currency translation adjustments | (51) | [4] | (51) | ||||||||||||||
Fixed price diesel swaps | $ 0 | ||||||||||||||||
Stock compensation expense, net | 28 | ||||||||||||||||
Tax withholding for share based compensation | (40) | ||||||||||||||||
Repurchase of common stock | $ (378) | ||||||||||||||||
Balance (in shares) at Mar. 31, 2024 | 66,796,805 | 67,000,000 | [1] | ||||||||||||||
Balance at Mar. 31, 2024 | $ 8,120 | $ 1 | $ 2,638 | $ 12,103 | $ (6,343) | $ (279) | |||||||||||
Balance (in shares) at Mar. 31, 2024 | 48,305,146 | 48,000,000 | |||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares shares in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Dividends declared (in usd per share) | $ 1.63 | $ 1.48 | |
Common Stock | |||
Change in common stock outstanding (in shares, approximately) | (2) |
Organization, Description of Business and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
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. We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand. 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, 2023 (the “2023 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 2023 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 Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements are not expected to have an impact on our financial statements, but will result in significantly expanded reportable segment disclosures. Improvements to Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption. These requirements are not expected to have an impact on our financial statements, but will impact our income tax disclosures.
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Revenue Recognition |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Revenue Recognition Accounting Standards We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard.
Revenues by reportable segment are presented in note 4 of the condensed consolidated financial statements, 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 three months ended March 31, 2024, 73 percent and 91 percent, respectively). We believe that the disaggregation of our revenue from contracts to customers as reflected above, coupled with the further discussion below and the reportable segment disclosures in note 4, depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 69 percent of total revenues for the three months ended March 31, 2024) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $146 and $138 as of March 31, 2024 and December 31, 2023, respectively. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment. Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 76 percent of our total revenues for the three months ended March 31, 2024). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowance for credit losses address receivables arising from revenues from both Topic 606 and Topic 842. 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 one percent or less of total revenues for the three months ended March 31, 2024, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent of total receivables at March 31, 2024 and December 31, 2023. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowance for credit losses reflects our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for credit losses. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 76 percent of our total revenues for the three months ended March 31, 2024, and these revenues account for corresponding portions of the $2.221 billion of net accounts receivable and the associated allowance for credit losses of $174 as of March 31, 2024). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for credit losses (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below.
_________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects credit losses associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity. 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 months ended March 31, 2024 or 2023 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2024 and 2023 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2024. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: •The transaction price is generally fixed and stated in our contracts; •As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation; •Our revenues do not include material amounts of variable consideration, or result in significant obligations associated with returns, refunds or warranties; and •Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis.
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions On March 15, 2024, we completed the acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”). Yak was a leader in the North American matting industry with a fleet of approximately 600,000 hardwood, softwood, and composite mats that provide surface protection across both construction and maintenance, repair and operations (“MRO”) applications, and served customers primarily in the industrial sector across over 40 states. The acquisition is expected to: • Provide entry into the matting market via an industry leader with established scale across fleet, operations, and talent; • Augment exposure to the energy and power verticals, where significant investment is expected over the next several decades; and • Enhance our one-stop-shop value proposition with immediate cross-selling opportunities to existing and new construction and MRO customers. The acquisition date fair value of the purchase price to acquire Yak was $1.165 billion, comprised of cash and $50 of estimated contingent consideration (such amount is also the maximum possible amount due) that could become payable to the seller based on revenue attainment in the first two years after closing. The acquisition and related fees and expenses were funded through the issuance of $1.100 billion principal amount of 6 1/8 Senior Notes (see note 7 to the condensed consolidated financial statements for further information) and drawings on our senior secured asset-based revolving credit facility (“ABL facility”). The following table summarizes the net book values of the assets acquired and liabilities assumed as of the acquisition date. The initial accounting for the acquisition is incomplete, principally related to finalizing 1) the measurement of the acquired net working capital, 2) the valuation of the acquired equipment (inclusive of the completion of our usual and customary procedures to validate the existence of the acquired rental fleet) and intangible assets, 3) the impact of lease accounting, 4) the valuation of the contingent consideration noted above and 5) the associated income tax considerations. All amounts below could change, potentially materially, as there is significant additional information that we must obtain to finalize the valuations of the assets acquired and liabilities assumed, and to establish the value of the potential intangible assets, primarily because of the proximity of the acquisition date to the balance sheet date of March 31, 2024.
(1)The estimated fair value of accounts receivables acquired was $99, and the gross contractual amount was $102. We estimated that $3 would be uncollectible. (2)All of the goodwill was assigned to our specialty segment. As noted above, we have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, primarily because of the proximity of the acquisition date to the balance sheet date of March 31, 2024. As such, we expect that goodwill will change materially from the amount noted above. Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of Yak's going-concern value, the value of Yak's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes (because the acquired Yak entities were sold as disregarded entities, the acquisition was treated as an asset purchase for income tax purposes, which resulted in the goodwill that is deductible for income tax purposes equaling the total acquired goodwill). The debt issuance costs associated with the issuance of debt to partially fund the acquisition are reflected, net of amortization subsequent to the acquisition date, in long-term debt in our consolidated balance sheets. It is not practicable to reasonably estimate the amounts of revenue and earnings of Yak since the acquisition date, primarily due to the movement of fleet between URI locations and the acquired Yak locations, as well as our corporate structure and the allocation of corporate costs. Pro forma financial information The pro forma information below gives effect to the Yak acquisition as if it had been completed on January 1, 2023. The table below presents unaudited pro forma revenue information as if the Yak acquisition had been included in our consolidated results for the entire period reflected. The pro forma information is not necessarily indicative of our revenue results had the acquisition been completed on the above date, nor is it necessarily indicative of our future results. The pro forma revenue information reflects the historic revenue of Yak as explained in the table below, and does not include any additional revenue opportunities following the acquisition. Pro forma revenue information is presented below for 2023, but not for 2024, as we do not yet have all the required information to determine the amount of 2024 revenue prior to the acquisition date, primarily because of the proximity of the acquisition date to March 31, 2024. Pro forma income information is also not presented, as we expect that there will be material adjustments to the values of the assets acquired, including establishing the value of the potential intangible assets, and liabilities assumed, and, as such, we cannot presently provide meaningful pro forma income information. The opening balance sheet values assigned to the Yak 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. We expect that such valuation changes could be material, primarily because of the proximity of the acquisition date to March 31, 2024. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. In future periods, we expect to provide pro forma revenue and income information for both 2024 and 2023.
(1)Yak revenue reflects only the historical results of the entities being acquired, and includes an estimate of revenue from mat rentals to a commonly controlled entity that were eliminated in consolidation by Yak. During 2024 and 2023, we completed other acquisitions that were not significant individually or in the aggregate. See the condensed consolidated statements of cash flows for the total cash outflow for purchases of other companies (including Yak), net of cash acquired.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our reportable segments are i) general rentals and ii) specialty. For general rentals, the divisions discussed below, which are our operating segments, are aggregated into the reportable segment. The specialty segment is a single division that is both an operating segment and a reportable segment. We believe that the divisions that are aggregated into our reportable segments have similar economic characteristics, as each division is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our divisions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of four geographic divisions—Central, Northeast, Southeast and West—and operates throughout the United States and Canada. The specialty segment, which, as noted above, is a single division that is both an operating segment and a reportable segment, rents products (and provides setup and other services on such rented equipment) including i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, iv) mobile storage equipment and modular office space and v) surface protection mats. The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a limited presence in Europe, Australia and New Zealand. The following tables set forth financial information by segment.
___________________ (1)The condensed consolidated statements of cash flows include the payments for capital expenditures, while the table above reflects the gross capital expenditures. Accounts payable as of March 31, 2024 and December 31, 2023 included $158 and $74, respectively, of amounts due but unpaid for purchases of rental equipment. The net impact of accrued purchases of rental equipment was not material for the three months ended March 31, 2023.
___________________ (1)The increase in the specialty segment assets primarily reflects the impact of the Yak acquisition discussed in note 3 to the condensed consolidated financial statements. 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:
___________________ (1)Primarily reflects severance and branch closure charges associated with our restructuring programs. The restructuring charges generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition. As of March 31, 2024, there were no open restructuring programs.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following table presents the changes in the carrying amount of goodwill for the three months ended March 31, 2024:
_________________ (1)The total carrying amount of goodwill for all periods in the table above is reflected net of $1.557 billion of accumulated impairment charges, which were primarily recorded in our general rentals segment. (2)Includes goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period. The goodwill related to acquisitions above primarily reflects the March 2024 acquisition of Yak, which is discussed note 3 to our condensed consolidated financial statements. Other intangible assets were comprised of the following at March 31, 2024 and December 31, 2023:
As discussed in note 3 to our condensed consolidated financial statements, in March 2024, we completed the acquisition of Yak. We have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, and to establish the value of the potential intangible assets, primarily because of the proximity of the acquisition date to the balance sheet date of March 31, 2024. As such, we have not yet recorded, as of March 31, 2024, any intangible assets associated with the acquisition. Amortization expense for other intangible assets was $60 and $79 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, estimated amortization expense for other intangible assets for each of the next five years and thereafter is as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements As of March 31, 2024 and December 31, 2023, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include: a)quoted prices for similar assets or liabilities in active markets; b)quoted prices for identical or similar assets or liabilities in inactive markets; c)inputs other than quoted prices that are observable for the asset or liability; d)inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our 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 variable rate debt facilities and finance leases approximated their book values as of March 31, 2024 and December 31, 2023. The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2024 and December 31, 2023 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:
___________________ (1)The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2024. The repurchase facility is not included below because there were no borrowings under it during the three months ended March 31, 2024. The repurchase facility expires on June 14, 2024, and may be extended by the mutual consent of the parties to the repurchase facility agreement. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation.
(2)Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of March 31, 2024, there were $1.348 billion of receivables, net of applicable reserves and other deductions, in the collateral pool. The accounts receivable securitization facility expires on June 24, 2024 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility. (3)In February 2024, the term loan facility was amended, primarily to extend the maturity date to February 14, 2031 and to increase the facility size to $1.000 billion (at the time of the amendment, the facility size was $948). (4)URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, URNA consummated an exchange offer pursuant to which most of the 4 7/8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7/8 percent Senior Notes issued in August 2017. As of March 31, 2024, the total above is comprised of two separate 4 7/8 percent Senior Notes, one with a book value of $1.661 billion and one with a book value of $4. (5)In March 2024, URNA issued $1.100 billion aggregate principal amount of 6 1/8 percent Senior Notes (the “6 1/8 percent Notes”) which are due March 15, 2034. The 6 1/8 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 6 1/8 percent Notes may be redeemed on or after March 15, 2029, at specified redemption prices that range from 103.063 percent in 2029, to 100 percent in 2032 and thereafter, in each case, plus accrued and unpaid interest, if any. At any time prior to March 15, 2029, URNA may, at its option, redeem some or all of the 6 1/8 percent Notes at a redemption price equal to 100 percent of the aggregate principal amount of the notes to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to the redemption date. In addition, at any time on or prior to March 15, 2027, up to 40 percent of the aggregate principal amount of the 6 1/8 percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 106.125 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 6 1/8 percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens and (ii) mergers and consolidations, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the requirements to provide subsidiary guarantees and to make an offer to repurchase the notes upon the occurrence of a change of control will not apply to URNA and its restricted subsidiaries during any period when the 6 1/8 percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 6 1/8 percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon. (6)Short-term debt primarily reflects borrowings under the accounts receivable securitization and repurchase facilities and the short-term portion of our finance leases. Loan Covenants and Compliance As of March 31, 2024, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization, term loan and repurchase facilities and our senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of March 31, 2024, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility. Covenants in the agreements governing our ABL facility, term loan facility and certain other debt instruments impose limitations on our ability to make share repurchases and dividend payments, subject to important exceptions that would allow us to make such repurchases or payments under certain conditions. Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of March 31, 2024, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
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Legal and Regulatory Matters |
3 Months Ended |
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Mar. 31, 2024 | |
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 conduct of our business. These matters include, but are not limited to, general liability claims (including personal injury, product liability, and property and automobile claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations and contract and real estate matters. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals included in our consolidated balance sheets for matters where we have established them, we currently believe that any liabilities ultimately resulting from these ordinary course claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.
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Earnings Per Share |
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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. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
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Pay vs Performance Disclosure - USD ($) $ in Millions |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 542 | $ 451 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
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 Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued ASU 2023-07, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements are not expected to have an impact on our financial statements, but will result in significantly expanded reportable segment disclosures. Improvements to Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption. These requirements are not expected to have an impact on our financial statements, but will impact our income tax disclosures.
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Lease revenues (Topic 842) | Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 69 percent of total revenues for the three months ended March 31, 2024) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $146 and $138 as of March 31, 2024 and December 31, 2023, respectively. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment.
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Revenues from contracts with customers (Topic 606) | Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 76 percent of our total revenues for the three months ended March 31, 2024). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowance for credit losses address receivables arising from revenues from both Topic 606 and Topic 842. 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 one percent or less of total revenues for the three months ended March 31, 2024, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent of total receivables at March 31, 2024 and December 31, 2023. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowance for credit losses reflects our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for credit losses. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 76 percent of our total revenues for the three months ended March 31, 2024, and these revenues account for corresponding portions of the $2.221 billion of net accounts receivable and the associated allowance for credit losses of $174 as of March 31, 2024). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for credit losses (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below.
_________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects credit losses associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity. 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 months ended March 31, 2024 or 2023 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2024 and 2023 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2024. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: •The transaction price is generally fixed and stated in our contracts; •As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation; •Our revenues do not include material amounts of variable consideration, or result in significant obligations associated with returns, refunds or warranties; and •Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [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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SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure | The rollforward of our allowance for credit losses (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below.
_________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects credit losses associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity.
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Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets acquired and liabilities assumed | The following table summarizes the net book values of the assets acquired and liabilities assumed as of the acquisition date. The initial accounting for the acquisition is incomplete, principally related to finalizing 1) the measurement of the acquired net working capital, 2) the valuation of the acquired equipment (inclusive of the completion of our usual and customary procedures to validate the existence of the acquired rental fleet) and intangible assets, 3) the impact of lease accounting, 4) the valuation of the contingent consideration noted above and 5) the associated income tax considerations. All amounts below could change, potentially materially, as there is significant additional information that we must obtain to finalize the valuations of the assets acquired and liabilities assumed, and to establish the value of the potential intangible assets, primarily because of the proximity of the acquisition date to the balance sheet date of March 31, 2024.
(1)The estimated fair value of accounts receivables acquired was $99, and the gross contractual amount was $102. We estimated that $3 would be uncollectible. (2)All of the goodwill was assigned to our specialty segment. As noted above, we have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, primarily because of the proximity of the acquisition date to the balance sheet date of March 31, 2024. As such, we expect that goodwill will change materially from the amount noted above. Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of Yak's going-concern value, the value of Yak's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes (because the acquired Yak entities were sold as disregarded entities, the acquisition was treated as an asset purchase for income tax purposes, which resulted in the goodwill that is deductible for income tax purposes equaling the total acquired goodwill).
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Summary of business acquisition, pro forma information |
(1)Yak revenue reflects only the historical results of the entities being acquired, and includes an estimate of revenue from mat rentals to a commonly controlled entity that were eliminated in consolidation by Yak.
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information by segment | The following tables set forth financial information by segment.
___________________ (1)The condensed consolidated statements of cash flows include the payments for capital expenditures, while the table above reflects the gross capital expenditures. Accounts payable as of March 31, 2024 and December 31, 2023 included $158 and $74, respectively, of amounts due but unpaid for purchases of rental equipment. The net impact of accrued purchases of rental equipment was not material for the three months ended March 31, 2023.
___________________ (1)The increase in the specialty segment assets primarily reflects the impact of the Yak acquisition discussed in note 3 to the condensed consolidated financial statements.
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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:
___________________ (1)Primarily reflects severance and branch closure charges associated with our restructuring programs. The restructuring charges generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition. As of March 31, 2024, there were no open restructuring programs.
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | The following table presents the changes in the carrying amount of goodwill for the three months ended March 31, 2024:
_________________ (1)The total carrying amount of goodwill for all periods in the table above is reflected net of $1.557 billion of accumulated impairment charges, which were primarily recorded in our general rentals segment. (2)Includes goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period. The goodwill related to acquisitions above primarily reflects the March 2024 acquisition of Yak, which is discussed note 3 to our condensed consolidated financial statements.
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Schedule of finite-lived intangible assets | Other intangible assets were comprised of the following at March 31, 2024 and December 31, 2023:
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Schedule of finite-lived intangible assets, future amortization expense | As of March 31, 2024, estimated amortization expense for other intangible assets for each of the next five years and thereafter is as follows:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2024 and December 31, 2023 have been calculated based upon available market information, and were as follows:
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Debt (Tables) |
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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:
___________________ (1)The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2024. The repurchase facility is not included below because there were no borrowings under it during the three months ended March 31, 2024. The repurchase facility expires on June 14, 2024, and may be extended by the mutual consent of the parties to the repurchase facility agreement. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation.
(2)Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of March 31, 2024, there were $1.348 billion of receivables, net of applicable reserves and other deductions, in the collateral pool. The accounts receivable securitization facility expires on June 24, 2024 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility. (3)In February 2024, the term loan facility was amended, primarily to extend the maturity date to February 14, 2031 and to increase the facility size to $1.000 billion (at the time of the amendment, the facility size was $948). (4)URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, URNA consummated an exchange offer pursuant to which most of the 4 7/8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7/8 percent Senior Notes issued in August 2017. As of March 31, 2024, the total above is comprised of two separate 4 7/8 percent Senior Notes, one with a book value of $1.661 billion and one with a book value of $4. (5)In March 2024, URNA issued $1.100 billion aggregate principal amount of 6 1/8 percent Senior Notes (the “6 1/8 percent Notes”) which are due March 15, 2034. The 6 1/8 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 6 1/8 percent Notes may be redeemed on or after March 15, 2029, at specified redemption prices that range from 103.063 percent in 2029, to 100 percent in 2032 and thereafter, in each case, plus accrued and unpaid interest, if any. At any time prior to March 15, 2029, URNA may, at its option, redeem some or all of the 6 1/8 percent Notes at a redemption price equal to 100 percent of the aggregate principal amount of the notes to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to the redemption date. In addition, at any time on or prior to March 15, 2027, up to 40 percent of the aggregate principal amount of the 6 1/8 percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 106.125 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 6 1/8 percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens and (ii) mergers and consolidations, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the requirements to provide subsidiary guarantees and to make an offer to repurchase the notes upon the occurrence of a change of control will not apply to URNA and its restricted subsidiaries during any period when the 6 1/8 percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 6 1/8 percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon. (6)Short-term debt primarily reflects borrowings under the accounts receivable securitization and repurchase facilities and the short-term portion of our finance leases.
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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Revenue Recognition (Allowance for Doubtful Accounts Rollforward) (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 169 | $ 134 |
Charged to costs and expenses | 4 | 3 |
Charged to revenue | 9 | 13 |
Deductions | (8) | (4) |
Ending balance | $ 174 | $ 146 |
Acquisitions (Narrative) (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 15, 2024
USD ($)
mat
state
|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
|
Business Acquisition [Line Items] | |||
Amortization expense | $ 60 | $ 79 | |
Senior Notes, 6.125 Percent | Senior notes | |||
Business Acquisition [Line Items] | |||
Debt instrument, face amount | $ 1,100 | ||
Stated interest rate | 6.125% | 6.125% | |
Yak | |||
Business Acquisition [Line Items] | |||
Number of service protection mats | mat | 600,000 | ||
Number of states | state | 40 | ||
Aggregate consideration paid | $ 1,165 | ||
Business combination, contingent consideration, liability | $ 50 | ||
Business combination, contingent consideration, period | 2 years |
Acquisitions (Assets Acquired and Liabilities Assumed - Yak) (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Mar. 15, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 6,863 | $ 5,940 | |
Yak | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 99 | ||
Rental equipment | 152 | ||
Property and equipment | 19 | ||
Operating lease right-of-use assets | 6 | ||
Other assets | 18 | ||
Total identifiable assets acquired | 294 | ||
Accounts payable, accrued expenses and other liabilities | (104) | ||
Operating lease liabilities | (6) | ||
Total liabilities assumed | (110) | ||
Net identifiable assets acquired | 184 | ||
Goodwill | 981 | ||
Net assets acquired | 1,165 | ||
Business combination, acquired receivable, fair value | 99 | ||
Gross contractual amount | 102 | ||
Estimated amount uncollectible | $ 3 |
Acquisitions (Pro Forma Information) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenues | $ 3,485 | $ 3,285 |
Pro forma revenue | 3,376 | |
Yak | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenues | $ 91 |
Segment Information (Reconciliation to Income (loss) from Continuing Operations) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 1,346 | $ 1,241 |
Selling, general and administrative expenses | (389) | (382) |
Restructuring charge | (1) | (1) |
Non-rental depreciation and amortization | (104) | (118) |
Interest expense, net | (160) | (150) |
Other income, net | 3 | 4 |
Income before provision for income taxes | 695 | 594 |
Total equipment rentals gross profit | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | 1,103 | 1,003 |
Gross profit from other lines of business | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 243 | $ 238 |
Goodwill and Other Intangible Assets (Goodwill) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 5,940 |
Goodwill related to acquisitions | 936 |
Foreign currency translation and other adjustments | (13) |
Ending balance | 6,863 |
Goodwill accumulated impairment loss | 1,557 |
General rentals | |
Goodwill [Roll Forward] | |
Beginning balance | 4,775 |
Goodwill related to acquisitions | 2 |
Foreign currency translation and other adjustments | (4) |
Ending balance | 4,773 |
Specialty | |
Goodwill [Roll Forward] | |
Beginning balance | 1,165 |
Goodwill related to acquisitions | 934 |
Foreign currency translation and other adjustments | (9) |
Ending balance | $ 2,090 |
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Net Amount | $ 666 | $ 670 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Amortization Period | 3 years | 4 years |
Gross Carrying Amount | $ 171 | $ 176 |
Accumulated Amortization | 63 | 58 |
Net Amount | $ 108 | $ 118 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Amortization Period | 6 years | 6 years |
Gross Carrying Amount | $ 2,523 | $ 2,468 |
Accumulated Amortization | 1,967 | 1,919 |
Net Amount | $ 556 | $ 549 |
Trade names and associated trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Amortization Period | 2 years | 2 years |
Gross Carrying Amount | $ 8 | $ 9 |
Accumulated Amortization | 6 | 6 |
Net Amount | $ 2 | $ 3 |
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 60 | $ 79 |
Goodwill and Other Intangible Assets (Maturity Schedule) (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 162 | |
2025 | 177 | |
2026 | 132 | |
2027 | 87 | |
2028 | 45 | |
Thereafter | 63 | |
Net Amount | $ 666 | $ 670 |
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 8,813 | $ 7,720 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 8,466 | $ 7,442 |
Debt (Narrative) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
ABL Facility | Line of Credit | |
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 | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Numerator: | ||
Net income available to common stockholders | $ 542 | $ 451 |
Denominator: | ||
Denominator for basic earnings per share—weighted-average common shares (in shares) | 67,213 | 69,414 |
Effect of dilutive securities: | ||
Denominator for diluted earnings per share—adjusted weighted-average common shares (in shares) | 67,417 | 69,745 |
Basic earnings per share (in dollars per share) | $ 8.06 | $ 6.50 |
Diluted earnings per share (in dollars per share) | $ 8.04 | $ 6.47 |
Employee stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 3 | 4 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 201 | 327 |
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