Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 17, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | UNITED RENTALS INC /DE | |
Entity Central Index Key | 1,067,701 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 84,513,378 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 337 | $ 312 |
Accounts receivable, net of allowance for doubtful accounts of $55 at March 31, 2017 and $54 at December 31, 2016 | 854 | 920 |
Inventory | 75 | 68 |
Prepaid expenses and other assets | 54 | 61 |
Total current assets | 1,320 | 1,361 |
Goodwill | 3,262 | 3,260 |
Other intangible assets, net | 701 | 742 |
Other long-term assets | 6 | 6 |
Total assets | 11,822 | 11,988 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Short-term debt and current maturities of long-term debt | 577 | 597 |
Accounts payable | 382 | 243 |
Accrued expenses and other liabilities | 358 | 344 |
Total current liabilities | 1,317 | 1,184 |
Long-term debt | 6,772 | 7,193 |
Deferred taxes | 1,911 | 1,896 |
Other long-term liabilities | 69 | 67 |
Total liabilities | 10,069 | 10,340 |
Common stock—$0.01 par value, 500,000,000 shares authorized, 112,270,415 and 84,507,242 shares issued and outstanding, respectively, at March 31, 2017 and 111,985,215 and 84,222,042 shares issued and outstanding, respectively, at December 31, 2016 | 1 | 1 |
Additional paid-in capital | 2,276 | 2,288 |
Retained earnings | 1,763 | 1,654 |
Treasury stock at cost—27,763,173 shares at March 31, 2017 and December 31, 2016 | (2,077) | (2,077) |
Accumulated other comprehensive loss | (210) | (218) |
Total stockholders’ equity (deficit) | 1,753 | 1,648 |
Total liabilities and stockholders’ equity | 11,822 | 11,988 |
Rental equipment, net | ||
ASSETS | ||
Property, plant and equipment, net | 6,107 | 6,189 |
Property and equipment, net | ||
ASSETS | ||
Property, plant and equipment, net | $ 426 | $ 430 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 55 | $ 54 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 112,270,415 | 111,985,215 |
Common stock, shares outstanding | 84,507,242 | 84,222,042 |
Treasury stock, shares | 27,763,173 | 27,763,173 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Equipment rentals | $ 1,166 | $ 1,117 |
Sales of rental equipment | 106 | 115 |
Sales of new equipment | 39 | 30 |
Contractor supplies sales | 18 | 19 |
Service and other revenues | 27 | 29 |
Total revenues | 1,356 | 1,310 |
Cost of revenues: | ||
Cost of equipment rentals, excluding depreciation | 474 | 449 |
Depreciation of rental equipment | 248 | 243 |
Cost of rental equipment sales | 60 | 68 |
Cost of new equipment sales | 34 | 25 |
Cost of contractor supplies sales | 13 | 13 |
Cost of service and other revenues | 13 | 12 |
Total cost of revenues | 842 | 810 |
Gross profit | 514 | 500 |
Selling, general and administrative expenses | 193 | 177 |
Merger related costs | 2 | 0 |
Restructuring charge | 0 | 2 |
Non-rental depreciation and amortization | 62 | 67 |
Operating income | 257 | 254 |
Interest expense, net | 94 | 107 |
Other expense, net | 2 | 0 |
Income before provision for income taxes | 161 | 147 |
Provision for income taxes | 52 | 55 |
Net income | $ 109 | $ 92 |
Basic earnings per share (in dollars per share) | $ 1.29 | $ 1.01 |
Diluted earnings per share (in dollars per share) | $ 1.27 | $ 1.01 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 109 | $ 92 | |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 9 | 62 | |
Fixed price diesel swaps | (1) | 1 | |
Other comprehensive income | 8 | 63 | |
Comprehensive income | [1] | $ 117 | $ 155 |
[1] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income during 2017 or 2016. There is no tax impact related to the foreign currency translation adjustments, as the earnings are considered permanently reinvested. There were no material taxes associated with other comprehensive income during 2017 or 2016. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2017 - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | [2] | ||
Balance (in shares) at Dec. 31, 2016 | 84 | [1] | 28 | ||||||
Balance at Dec. 31, 2016 | $ 1,648 | $ 1 | $ 2,288 | $ 1,654 | $ (2,077) | $ (218) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 109 | 109 | |||||||
Foreign currency translation adjustments | 9 | 9 | |||||||
Fixed price diesel swaps | (1) | (1) | |||||||
Stock compensation expense, net (in shares) | [1] | 1 | |||||||
Stock compensation expense, net | 16 | ||||||||
Exercise of common stock options | 1 | ||||||||
Shares repurchased and retired | (23) | ||||||||
Other | (6) | ||||||||
Balance (in shares) at Mar. 31, 2017 | 85 | [1] | 28 | ||||||
Balance at Mar. 31, 2017 | $ 1,753 | $ 1 | $ 2,276 | $ 1,763 | $ (2,077) | $ (210) | |||
[1] | Common stock outstanding decreased by approximately 8 million net shares during the year ended December 31, 2016. | ||||||||
[2] | The Accumulated Other Comprehensive Loss balance primarily reflects foreign currency translation adjustments. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) shares in Millions | 12 Months Ended |
Dec. 31, 2016shares | |
Statement of Stockholders' Equity [Abstract] | |
Increase (decrease) in common stock outstanding (in shares) | (8) |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities: | ||
Net income | $ 109 | $ 92 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 310 | 310 |
Amortization of deferred financing costs and original issue discounts | 2 | 2 |
Gain on sales of rental equipment | (46) | (47) |
Gain on sales of non-rental equipment | (1) | (1) |
Stock compensation expense, net | 16 | 9 |
Merger related costs | 2 | 0 |
Restructuring charge | 0 | 2 |
Excess tax benefits from share-based payment arrangements | 0 | (27) |
Increase in deferred taxes | 10 | 25 |
Changes in operating assets and liabilities, net of amounts acquired: | ||
Decrease in accounts receivable | 65 | 103 |
Increase in inventory | (6) | (4) |
Decrease in prepaid expenses and other assets | 9 | 64 |
Increase in accounts payable | 139 | 56 |
Increase in accrued expenses and other liabilities | 14 | 20 |
Net cash provided by operating activities | 623 | 604 |
Cash Flows From Investing Activities: | ||
Purchases of other companies, net of cash acquired | 0 | (13) |
Purchases of investments | (1) | 0 |
Net cash used in investing activities | (134) | (17) |
Cash Flows From Financing Activities: | ||
Proceeds from debt | 1,502 | 914 |
Payments of debt | (1,939) | (1,337) |
Proceeds from the exercise of common stock options | 1 | 0 |
Common stock repurchased | (23) | (164) |
Payments of financing costs | (7) | 0 |
Excess tax benefits from share-based payment arrangements | 0 | 27 |
Net cash used in financing activities | (466) | (560) |
Effect of foreign exchange rates | 2 | 13 |
Net increase in cash and cash equivalents | 25 | 40 |
Cash and cash equivalents at beginning of period | 312 | 179 |
Cash and cash equivalents at end of period | 337 | 219 |
Supplemental disclosure of cash flow information: | ||
Cash paid (received) for income taxes, net | 1 | (53) |
Cash paid for interest | 90 | 69 |
Rental equipment | ||
Cash Flows From Investing Activities: | ||
Purchases of equipment | (219) | (100) |
Proceeds from sales of equipment | 106 | 115 |
Nonrental equipment | ||
Cash Flows From Investing Activities: | ||
Purchases of equipment | (22) | (23) |
Proceeds from sales of equipment | $ 2 | $ 4 |
Organization, Description of Bu
Organization, Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Basis of Presentation | Organization, Description of Business and Basis of Presentation United Rentals, Inc. (“Holdings,” “URI” or the “Company”) is principally a holding company and conducts its operations primarily through its wholly owned subsidiary, United Rentals (North America), Inc. (“URNA”), and subsidiaries of URNA. Holdings’ primary asset is its sole ownership of all issued and outstanding shares of common stock of URNA. URNA’s various credit agreements and debt instruments place restrictions on its ability to transfer funds to its shareholder. We rent equipment to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities in the United States and Canada. In addition to renting equipment, we sell new and used rental equipment, as well as related contractor supplies, parts and service. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the accounting policies described in our annual report on Form 10-K for the year ended December 31, 2016 (the “ 2016 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 2016 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 Revenue from Contracts with Customers . In May 2014, and in subsequent updates, the Financial Accounting Standards Board (“FASB”) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption (for fiscal years and interim periods beginning after December 15, 2016) is permitted. We expect to adopt this guidance when effective. Owned equipment rental revenue is a component of our rental revenue that accounted for 87 percent and 74 percent of our equipment rental revenue and total revenue, respectively, during the three months ended March 31, 2017 . We believe the accounting for owned equipment rental revenue is outside of the scope of the revenue guidance and will be evaluated under the new lease guidance described in more detail in the “Leases” disclosure below. Additionally, we have reviewed the accounting for sales of rental equipment, sales of new equipment and contractor supplies sales, which collectively accounted for 12 percent of our total revenues during the three months ended March 31, 2017 . While our review of these revenue items is ongoing, we do not expect the adoption of this guidance to have a significant impact on our financial statements associated with these items. The impact on our financial statements associated with our other revenue components is not currently estimable. We are also evaluating the impact of the new revenue standard on our internal controls over financial reporting. Leases . In March 2016, the FASB issued guidance (“Topic 842”) to increase transparency and comparability among organizations by requiring i) recognition of lease assets and lease liabilities on the balance sheet and ii) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: i) the lessor accounting guidance with certain changes made to the lessee accounting guidance and ii) key aspects of the lessor accounting model with revenue recognition guidance. Topic 842 will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable. Statement of Cash Flows. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. The guidance addresses the following specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued guidance that will require companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective or prospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued guidance that will require companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Simplifying the Test for Goodwill Impairment . In January 2017, the FASB issued guidance intended to simplify the subsequent accounting for goodwill acquired in a business combination. Prior guidance required utilizing a two-step process to review goodwill for impairment. A second step was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of the reporting unit's goodwill (as if purchase accounting were performed on the testing date) with the carrying amount of the goodwill. The new guidance eliminates the second step from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss should not exceed the total amount of goodwill allocated to the reporting unit). The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt this guidance when effective, and do not expect it to have a significant impact on our financial statements. Guidance Adopted in 2017 Improvements to Employee Share-Based Payment Accounting. In the first quarter of 2017, we adopted guidance that simplified several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. We prospectively adopted the amendments in this guidance that relate to the classification of excess tax benefits from share-based payment arrangements on the statement of cash flows. The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes. In the three months ended March 31, 2017 , we recognized $ 8 of such excess tax benefits, and, pursuant to the adopted guidance, net income increased by $ 8 , or $0.09 per basic and diluted share, reflecting the tax reduction associated with the excess tax benefits. Prior periods have not been adjusted to reflect the new guidance related to the classification of the excess tax benefits, as we have elected to prospectively adopt such guidance. Accordingly, our statement of cash flows for the three months ended March 31, 2016 reflects $ 27 of such excess tax benefits within net cash used in financing activities. All of the excess tax benefits for the three months ended March 31, 2016 pertain to share based payments that vested prior to 2016, and, accordingly, would not have impacted net income under the new guidance. Other significant components of the adopted guidance include: • Certain aspects of the guidance require a cumulative change to retained earnings upon adoption, though we did no t recognize any such change. In 2016, we utilized all of the prior excess tax benefits from share-based payments that vested through 2016, and, accordingly, no change to retained earnings was required. Additionally, upon adopting this guidance, we elected to record forfeitures of share-based payments as they occur. Making such an election requires a cumulative change to retained earnings upon adoption. However, we historically adjusted estimated forfeitures to reflect actual forfeitures annually, as a result of which no change to retained earnings was required. • The guidance requires that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. We have historically classified such payments as financing activities, so no retrospective change was required to our 2016 statement of cash flows. NES Acquisition On January 25, 2017, we entered into a definitive merger agreement with NES Rentals Holdings II, Inc. (“NES”), pursuant to which we agreed to acquire NES in an all cash transaction. The merger closed on April 3, 2017. The aggregate merger consideration paid to holders of NES common stock and options was approximately $ 965 . The merger and related fees and expenses were funded through available cash, drawings on current debt facilities and new debt issuances. See note 6 to the condensed consolidated financial statements for additional detail on the debt issuances. NES was a provider of rental equipment with 73 branches located throughout the eastern half of the U.S., and had approximately 1,100 employees and approximately $ 900 of rental assets at original equipment cost as of December 31, 2016. NES had annual revenues of approximately $ 369 . We expect to initiate a restructuring program in connection with the acquisition, and are identifying the actions that we expect to undertake under the program. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our reportable segments are i) general rentals and ii) trench, power and pump. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of nine geographic regions—Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Midwest, Northeast, Pacific West, South-Central, South, Southeast and Western Canada—and operates throughout the United States and Canada. The trench, power and pump segment includes the rental of specialty construction products such as i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment and iii) pumps primarily used by municipalities, industrial plants, and mining, construction, and agribusiness customers. The trench, power and pump segment is comprised of the following regions, each of which primarily rents the corresponding equipment type described above: (i) the Trench Safety region, (ii) the Power and HVAC region, and (iii) the Pump Solutions region. The trench, power and pump segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment operates throughout the United States and in Canada. These segments align our external segment reporting with how management evaluates and allocates resources. We evaluate segment performance based on segment equipment rentals gross profit. The following tables set forth financial information by segment. General rentals Trench, power and pump Total Three Months Ended March 31, 2017 Equipment rentals $ 977 $ 189 $ 1,166 Sales of rental equipment 96 10 106 Sales of new equipment 35 4 39 Contractor supplies sales 14 4 18 Service and other revenues 24 3 27 Total revenue 1,146 210 1,356 Depreciation and amortization expense 264 46 310 Equipment rentals gross profit 360 84 444 Capital expenditures 211 30 241 Three Months Ended March 31, 2016 Equipment rentals $ 955 $ 162 $ 1,117 Sales of rental equipment 106 9 115 Sales of new equipment 26 4 30 Contractor supplies sales 16 3 19 Service and other revenues 26 3 29 Total revenue 1,129 181 1,310 Depreciation and amortization expense 266 44 310 Equipment rentals gross profit 357 68 425 Capital expenditures 104 19 123 March 31, December 31, Total reportable segment assets General rentals $ 10,348 $ 10,496 Trench, power and pump 1,474 1,492 Total assets $ 11,822 $ 11,988 Equipment rentals gross profit is the primary measure management reviews to make operating decisions and assess segment performance. The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes: Three Months Ended March 31, 2017 2016 Total equipment rentals gross profit $ 444 $ 425 Gross profit from other lines of business 70 75 Selling, general and administrative expenses (193 ) (177 ) Merger related costs (2 ) — Restructuring charge — (2 ) Non-rental depreciation and amortization (62 ) (67 ) Interest expense, net (94 ) (107 ) Other expense, net (2 ) — Income before provision for income taxes $ 161 $ 147 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges Restructuring Charges Restructuring charges include severance costs associated with headcount reductions, as well as branch closure charges which principally relate to continuing lease obligations at vacant facilities. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such restructuring program was initiated in 2008, we have completed three restructuring programs, under which we have incurred total restructuring charges of $234 . Closed Restructuring Programs We have three closed restructuring programs. The first was initiated in 2008 in recognition of a challenging economic environment and was completed in 2011. The second was initiated following the April 30, 2012 acquisition of RSC Holdings Inc. ("RSC"), and was completed in 2013. The third was initiated in the fourth quarter of 2015 in response to challenges in our operating environment. In particular, during 2015, we experienced volume and pricing pressure in our general rental business and our Pump Solutions region associated with upstream oil and gas customers. Additionally, our Lean initiatives did not fully generate the anticipated cost savings due to lower than expected growth. In 2016, we achieved the anticipated run rate savings from the Lean initiatives, and this restructuring program was completed in 2016. The table below provides certain information concerning restructuring activity during the three months ended March 31, 2017 : Reserve Balance at Charged to Payments Reserve Balance at December 31, 2016 March 31, 2017 Branch closure charges $ 16 $ — $ — $ 16 Severance costs 1 — (1 ) — Total $ 17 $ — $ (1 ) $ 16 As discussed in note 1 to our condensed consolidated financial statements, we expect to initiate a restructuring program in connection with the NES acquisition that closed on April 3, 2017, and are identifying the actions that we expect to undertake under the program. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives We recognize all derivative instruments as either assets or liabilities at fair value, and recognize changes in the fair value of the derivative instruments based on the designation of the derivative. We are exposed to certain risks relating to our ongoing business operations. During the three months ended March 31, 2017 and 2016 , the only risk we managed using derivative instruments was diesel price risk. At March 31, 2017 , we had outstanding fixed price swap contracts on diesel purchases which were entered into to mitigate the price risk associated with forecasted purchases of diesel. Fixed Price Diesel Swaps The fixed price swap contracts on diesel purchases that were outstanding at March 31, 2017 were designated and qualify as cash flow hedges and the effective portion of the gain or loss on these contracts is reported as a component of accumulated other comprehensive income and is reclassified into earnings in the period during which the hedged transaction affects earnings (i.e., when the hedged gallons of diesel are used). The remaining gain or loss on the fixed price swap contracts in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion), is recognized in our condensed consolidated statements of income during the current period. As of March 31, 2017 , we had outstanding fixed price swap contracts covering 6.0 million gallons of diesel which will be purchased throughout 2017 and 2018. Financial Statement Presentation As of March 31, 2017 and December 31, 2016 , immaterial amounts ( $1 or less) were reflected in prepaid expenses and other assets, accrued expenses and other liabilities, and accumulated other comprehensive income in our condensed consolidated balance sheets associated with the outstanding fixed price swap contracts that were designated and qualify as cash flow hedges. The effect of our derivative instruments on our condensed consolidated statements of income for the three months ended March 31, 2017 and 2016 was as follows: Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Location of income (expense) recognized on derivative/hedged item Amount of income (expense) recognized on derivative Amount of income (expense) recognized on hedged item Amount of income (expense) recognized on derivative Amount of income (expense) recognized on hedged item Derivatives designated as hedging instruments: Fixed price diesel swaps Other income (expense), net (1) $ * $ * Cost of equipment rentals, excluding depreciation (2), (3) * $ (5 ) (2 ) $ (5 ) * Amounts are insignificant (less than $1 ). (1) Represents the ineffective portion of the fixed price diesel swaps. (2) Amounts recognized on derivative represent the effective portion of the fixed price diesel swaps. (3) Amounts recognized on hedged item reflect the use of 1.9 million and 2.6 million gallons and of diesel covered by the fixed price swaps during the three months ended March 31, 2017 and 2016 , respectively. These amounts are reflected, net of cash received from, or paid to, the counterparties to the fixed price swaps, in operating cash flows in our condensed consolidated statement of cash flows. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We account for certain assets and liabilities at fair value. We categorize each of our fair value measurements 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. Assets and Liabilities Measured at Fair Value As of March 31, 2017 and December 31, 2016 , our only assets and liabilities measured at fair value were our fixed price diesel swaps contracts, which are Level 2 derivatives measured at fair value on a recurring basis. As of March 31, 2017 and December 31, 2016 , immaterial amounts ( $1 or less) were reflected in prepaid expenses and other assets, and accrued expenses and other liabilities in our condensed consolidated balance sheets, reflecting the fair values of the fixed price diesel swaps contracts. As discussed in note 4 to the condensed consolidated financial statements, we entered into the fixed price swap contracts on diesel purchases to mitigate the price risk associated with forecasted purchases of diesel. Fair value is determined based on observable market data. As of March 31, 2017 , we have fixed price swap contracts that mature throughout 2017 and 2018 covering 6.0 million gallons of diesel which we will buy at the average contract price of $2.56 per gallon, while the average forward price for the hedged gallons was $2.60 per gallon as of March 31, 2017 . 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 senior secured asset-based revolving credit facility (“ABL facility”), accounts receivable securitization facility and capital leases approximated their book values as of March 31, 2017 and December 31, 2016 . The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2017 and December 31, 2016 have been calculated based upon available market information, and were as follows: March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Senior notes $ 6,016 $ 6,246 $ 5,506 $ 5,715 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following: March 31, 2017 December 31, 2016 Accounts Receivable Securitization Facility expiring 2017 (1) $ 550 $ 568 $2.5 billion ABL Facility expiring 2021 (2) 720 1,645 7 5 / 8 percent Senior Notes due 2022 470 469 6 1 / 8 percent Senior Notes due 2023 936 936 4 5 / 8 percent Senior Secured Notes due 2023 991 991 5 3 / 4 percent Senior Notes due 2024 840 839 5 1 / 2 percent Senior Notes due 2025 792 792 5 7 / 8 percent Senior Notes due 2026 (3) 998 740 5 1 / 2 percent Senior Notes due 2027 (4) 989 739 Capital leases 63 71 Total debt (5) 7,349 7,790 Less short-term portion (6) (577 ) (597 ) Total long-term debt $ 6,772 $ 7,193 ___________________ (1) At March 31, 2017 , $18 was available under our accounts receivable securitization facility. The interest rate applicable to the accounts receivable securitization facility was 1.7 percent at March 31, 2017 . During the three months ended March 31, 2017 , the monthly average amount outstanding under the accounts receivable securitization facility was $518 , and the weighted-average interest rate thereon was 1.6 percent . The maximum month-end amount outstanding under the accounts receivable securitization facility during the three months ended March 31, 2017 was $551 . 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, 2017 , there were $ 569 of receivables, net of applicable reserves and other deductions, in the collateral pool. (2) At March 31, 2017 , $1.7 billion was available under our ABL facility, net of $36 of letters of credit. The interest rate applicable to the ABL facility was 2.5 percent at March 31, 2017 . During the three months ended March 31, 2017 , the monthly average amount outstanding under the ABL facility was $1.0 billion, and the weighted-average interest rate thereon was 2.3 percent . The maximum month-end amount outstanding under the ABL facility during the three months ended March 31, 2017 was $1.5 billion . As discussed below, pending the payment of the purchase price for the NES acquisition discussed in note 1 to the condensed consolidated financial statements, the net proceeds from debt issued in February 2017 were used to reduce borrowings under the ABL facility. Following the closing of the NES acquisition on April 3, 2017, we used borrowings under the ABL facility to partially fund the NES acquisition. (3) In February 2017, URNA issued $250 principal amount of 5 7 / 8 percent Senior Notes as an add-on to our existing 5 7 / 8 percent Senior Notes. The net proceeds from the issuance were $258 (including the original issue premium and after deducting offering expenses). Pending the payment of the purchase price for the NES acquisition, the net proceeds from the issuance were used to reduce borrowings under the ABL facility. The acquisition closed on April 3, 2017. Upon closing of the NES acquisition, we used available cash and borrowings under the ABL facility to finance the NES acquisition. After the February 2017 issuance, the aggregate principal amount of outstanding 5 7 / 8 percent Senior Notes was $ 1.0 billion . The newly issued notes have identical terms, and are fungible, with the 5 7 / 8 percent Senior Notes outstanding at December 31, 2016. The carrying value of the 5 7 / 8 percent Senior Notes includes the $11 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2026. The effective interest rate on the 5 7 / 8 percent Senior Notes is 5.7 percent. (4) In February 2017, URNA issued $250 principal amount of 5 1 / 2 percent Senior Notes due 2027 (the "2027 5 1 / 2 percent Senior Notes") as an add-on to our existing 2027 5 1 / 2 percent Senior Notes. The net proceeds from the issuance were $250 (including the original issue premium and after deducting offering expenses). Pending the payment of the purchase price for the NES acquisition, the net proceeds from the issuance were used to reduce borrowings under the ABL facility. Upon closing of the NES acquisition, we used available cash and borrowings under the ABL facility to finance the NES acquisition. After the February 2017 issuance, the aggregate principal amount of outstanding 2027 5 1 / 2 percent Senior Notes was $ 1.0 billion . The newly issued notes have identical terms, and are fungible, with the 2027 5 1 / 2 percent Senior Notes outstanding at December 31, 2016. The carrying value of the 2027 5 1 / 2 percent Senior Notes includes the $3 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2027. The effective interest rate on the 2027 5 1 / 2 percent Senior Notes is 5.5 percent. (5) As discussed above, we completed the NES acquisition on April 3, 2017. The aggregate consideration paid to holders of NES common stock and options was approximately $ 965 . Total debt as of March 31, 2017 reflects $ 500 principal amount of debt issued in connection with the acquisition, as discussed above. Upon closing, we paid the consideration due to holders of NES common stock and options using available cash and drawings on the ABL facility. After payment of such consideration, total outstanding debt was approximately $ 8.0 billion. (6) As of March 31, 2017 , our short-term debt primarily reflects $ 550 of borrowings under our accounts receivable securitization facility. Loan Covenants and Compliance As of March 31, 2017 , we were in compliance with the covenants and other provisions of the ABL facility, the accounts receivable securitization facility and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. The only financial maintenance covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of March 31, 2017 , specified availability under the ABL facility exceeded the required threshold and, as a result, this financial maintenance covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility. |
Legal and Regulatory Matters
Legal and Regulatory Matters | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | Legal and Regulatory Matters We are subject to a number of claims and proceedings that generally arise in the ordinary course of our business. These matters include, but are not limited to, general liability claims (including personal injury, property and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations, contract and real estate matters, and other general business litigation. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals for matters where we have established them, we currently believe that any liabilities ultimately resulting from such claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands): Three Months Ended March 31, 2017 2016 Numerator: Net income available to common stockholders $ 109 $ 92 Denominator: Denominator for basic earnings per share—weighted-average common shares 84,456 90,510 Effect of dilutive securities: Employee stock options 414 263 Restricted stock units 507 170 Denominator for diluted earnings per share—adjusted weighted-average common shares 85,377 90,943 Basic earnings per share $ 1.29 $ 1.01 Diluted earnings per share $ 1.27 $ 1.01 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information of Guarantor Subsidiaries | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Information of Guarantor Subsidiaries | Condensed Consolidating Financial Information of Guarantor Subsidiaries URNA is 100 percent owned by Holdings (“Parent”) and has certain outstanding indebtedness that is guaranteed by both Parent and, with the exception of its U.S. special purpose vehicle which holds receivable assets relating to the Company’s accounts receivable securitization facility (the “SPV”), all of URNA’s U.S. subsidiaries (the “guarantor subsidiaries”). Other than the guarantee by certain Canadian subsidiaries of URNA's indebtedness under the ABL facility, none of URNA’s indebtedness is guaranteed by URNA's foreign subsidiaries or the SPV (together, the “non-guarantor subsidiaries”). The receivable assets owned by the SPV have been sold or contributed by URNA to the SPV and are not available to satisfy the obligations of URNA or Parent’s other subsidiaries. The guarantor subsidiaries are all 100 percent -owned and the guarantees are made on a joint and several basis. The guarantees are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met or designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants. The guarantees are also subject to subordination provisions (to the same extent that the obligations of the issuer under the relevant notes are subordinated to other debt of the issuer) and to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws. Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that the guarantees of the guarantor subsidiaries comply with the conditions set forth in Rule 3-10 and therefore continue to utilize Rule 3-10 to present condensed consolidating financial information for Holdings, URNA, the guarantor subsidiaries and the non-guarantor subsidiaries. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information is presented. URNA covenants in the ABL facility, accounts receivable securitization facility and the other agreements governing our debt impose operating and financial restrictions on URNA, Parent and the guarantor subsidiaries, including limitations on the ability to make share repurchases and dividend payments. As of March 31, 2017 , the amount available for distribution under the most restrictive of these covenants was $ 415 . The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of March 31, 2017 , our total available capacity for making share repurchases and dividend payments, which includes URNA’s capacity to make restricted payments and the intercompany receivable balance of Parent, was $810 . The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV ASSETS Cash and cash equivalents $ — $ 14 $ — $ 323 $ — $ — $ 337 Accounts receivable, net — 38 — 87 729 — 854 Intercompany receivable (payable) 395 (188 ) (196 ) (117 ) — 106 — Inventory — 68 — 7 — — 75 Prepaid expenses and other assets 6 42 — 6 — — 54 Total current assets 401 (26 ) (196 ) 306 729 106 1,320 Rental equipment, net — 5,631 — 476 — — 6,107 Property and equipment, net 38 319 30 39 — — 426 Investments in subsidiaries 1,342 978 983 — — (3,303 ) — Goodwill — 3,013 — 249 — — 3,262 Other intangible assets, net — 648 — 53 — — 701 Other long-term assets — 6 — — — — 6 Total assets $ 1,781 $ 10,569 $ 817 $ 1,123 $ 729 $ (3,197 ) $ 11,822 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 24 $ — $ 2 $ 550 $ — $ 577 Accounts payable — 344 — 38 — — 382 Accrued expenses and other liabilities — 321 11 25 1 — 358 Total current liabilities 1 689 11 65 551 — 1,317 Long-term debt 2 6,655 111 4 — — 6,772 Deferred taxes 25 1,815 — 71 — — 1,911 Other long-term liabilities — 68 1 — — — 69 Total liabilities 28 9,227 123 140 551 — 10,069 Total stockholders’ equity (deficit) 1,753 1,342 694 983 178 (3,197 ) 1,753 Total liabilities and stockholders’ equity (deficit) $ 1,781 $ 10,569 $ 817 $ 1,123 $ 729 $ (3,197 ) $ 11,822 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV ASSETS Cash and cash equivalents $ — $ 21 $ — $ 291 $ — $ — $ 312 Accounts receivable, net — 38 — 96 786 — 920 Intercompany receivable (payable) 336 (137 ) (188 ) (115 ) — 104 — Inventory — 61 — 7 — — 68 Prepaid expenses and other assets 5 51 — 5 — — 61 Total current assets 341 34 (188 ) 284 786 104 1,361 Rental equipment, net — 5,709 — 480 — — 6,189 Property and equipment, net 38 326 26 40 — — 430 Investments in subsidiaries 1,292 1,013 978 — — (3,283 ) — Goodwill — 3,013 — 247 — — 3,260 Other intangible assets, net — 686 — 56 — — 742 Other long-term assets — 6 — — — — 6 Total assets $ 1,671 $ 10,787 $ 816 $ 1,107 $ 786 $ (3,179 ) $ 11,988 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 25 $ — $ 3 $ 568 $ — $ 597 Accounts payable — 217 — 26 — — 243 Accrued expenses and other liabilities — 305 13 25 1 — 344 Total current liabilities 1 547 13 54 569 — 1,184 Long-term debt 2 7,076 111 4 — — 7,193 Deferred taxes 20 1,805 — 71 — — 1,896 Other long-term liabilities — 67 — — — — 67 Total liabilities 23 9,495 124 129 569 — 10,340 Total stockholders’ equity (deficit) 1,648 1,292 692 978 217 (3,179 ) 1,648 Total liabilities and stockholders’ equity (deficit) $ 1,671 $ 10,787 $ 816 $ 1,107 $ 786 $ (3,179 ) $ 11,988 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Revenues: Equipment rentals $ — $ 1,070 $ — $ 96 $ — $ — $ 1,166 Sales of rental equipment — 95 — 11 — — 106 Sales of new equipment — 35 — 4 — — 39 Contractor supplies sales — 16 — 2 — — 18 Service and other revenues — 24 — 3 — — 27 Total revenues — 1,240 — 116 — — 1,356 Cost of revenues: Cost of equipment rentals, excluding depreciation — 423 — 51 — — 474 Depreciation of rental equipment — 227 — 21 — — 248 Cost of rental equipment sales — 54 — 6 — — 60 Cost of new equipment sales — 31 — 3 — — 34 Cost of contractor supplies sales — 12 — 1 — — 13 Cost of service and other revenues — 11 — 2 — — 13 Total cost of revenues — 758 — 84 — — 842 Gross profit — 482 — 32 — — 514 Selling, general and administrative expenses 23 145 — 17 8 — 193 Merger related costs — 2 — — — — 2 Non-rental depreciation and amortization 4 52 — 6 — — 62 Operating (loss) income (27 ) 283 — 9 (8 ) — 257 Interest (income) expense, net (2 ) 93 1 1 2 (1 ) 94 Other (income) expense, net (112 ) 124 — 12 (22 ) — 2 Income (loss) before provision (benefit) for income taxes 87 66 (1 ) (4 ) 12 1 161 Provision (benefit) for income taxes 21 28 — (2 ) 5 — 52 Income (loss) before equity in net earnings (loss) of subsidiaries 66 38 (1 ) (2 ) 7 1 109 Equity in net earnings (loss) of subsidiaries 43 5 (2 ) — — (46 ) — Net income (loss) 109 43 (3 ) (2 ) 7 (45 ) 109 Other comprehensive income (loss) 8 8 8 7 — (23 ) 8 Comprehensive income (loss) $ 117 $ 51 $ 5 $ 5 $ 7 $ (68 ) $ 117 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Revenues: Equipment rentals $ — $ 1,024 $ — $ 93 $ — $ — $ 1,117 Sales of rental equipment — 104 — 11 — — 115 Sales of new equipment — 27 — 3 — — 30 Contractor supplies sales — 17 — 2 — — 19 Service and other revenues — 25 — 4 — — 29 Total revenues — 1,197 — 113 — — 1,310 Cost of revenues: Cost of equipment rentals, excluding depreciation — 404 — 45 — — 449 Depreciation of rental equipment — 221 — 22 — — 243 Cost of rental equipment sales — 62 — 6 — — 68 Cost of new equipment sales — 23 — 2 — — 25 Cost of contractor supplies sales — 12 — 1 — — 13 Cost of service and other revenues — 9 — 3 — — 12 Total cost of revenues — 731 — 79 — — 810 Gross profit — 466 — 34 — — 500 Selling, general and administrative expenses 6 144 — 19 8 — 177 Restructuring charge — 2 — — — — 2 Non-rental depreciation and amortization 4 57 — 6 — — 67 Operating (loss) income (10 ) 263 — 9 (8 ) — 254 Interest (income) expense, net (2 ) 106 1 1 2 (1 ) 107 Other (income) expense, net (106 ) 122 — 9 (25 ) — — Income (loss) before provision for income taxes 98 35 (1 ) (1 ) 15 1 147 Provision (benefit) for income taxes 37 13 — (1 ) 6 — 55 Income (loss) before equity in net earnings (loss) of subsidiaries 61 22 (1 ) — 9 1 92 Equity in net earnings (loss) of subsidiaries 31 9 — — — (40 ) — Net income (loss) 92 31 (1 ) — 9 (39 ) 92 Other comprehensive income (loss) 63 63 62 50 — (175 ) 63 Comprehensive income (loss) $ 155 $ 94 $ 61 $ 50 $ 9 $ (214 ) $ 155 CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Three Months Ended March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Net cash provided by (used in) operating activities $ 4 $ 516 $ (1 ) $ 39 $ 65 $ — $ 623 Net cash used in investing activities (4 ) (121 ) — (9 ) — — (134 ) Net cash (used in) provided by financing activities — (402 ) 1 — (65 ) — (466 ) Effect of foreign exchange rates — — — 2 — — 2 Net (decrease) increase in cash and cash equivalents — (7 ) — 32 — — 25 Cash and cash equivalents at beginning of period — 21 — 291 — — 312 Cash and cash equivalents at end of period $ — $ 14 $ — $ 323 $ — $ — $ 337 CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Three Months Ended March 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Net cash provided by operating activities $ — $ 469 $ — $ 41 $ 94 $ — $ 604 Net cash used in investing activities — (17 ) — — — — (17 ) Net cash used in financing activities — (466 ) — — (94 ) — (560 ) Effect of foreign exchange rates — — — 13 — — 13 Net (decrease) increase in cash and cash equivalents — (14 ) — 54 — — 40 Cash and cash equivalents at beginning of period — 18 — 161 — — 179 Cash and cash equivalents at end of period $ — $ 4 $ — $ 215 $ — $ — $ 219 |
Organization, Description of 18
Organization, Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Revenue from Contracts with Customers . In May 2014, and in subsequent updates, the Financial Accounting Standards Board (“FASB”) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption (for fiscal years and interim periods beginning after December 15, 2016) is permitted. We expect to adopt this guidance when effective. Owned equipment rental revenue is a component of our rental revenue that accounted for 87 percent and 74 percent of our equipment rental revenue and total revenue, respectively, during the three months ended March 31, 2017 . We believe the accounting for owned equipment rental revenue is outside of the scope of the revenue guidance and will be evaluated under the new lease guidance described in more detail in the “Leases” disclosure below. Additionally, we have reviewed the accounting for sales of rental equipment, sales of new equipment and contractor supplies sales, which collectively accounted for 12 percent of our total revenues during the three months ended March 31, 2017 . While our review of these revenue items is ongoing, we do not expect the adoption of this guidance to have a significant impact on our financial statements associated with these items. The impact on our financial statements associated with our other revenue components is not currently estimable. We are also evaluating the impact of the new revenue standard on our internal controls over financial reporting. Leases . In March 2016, the FASB issued guidance (“Topic 842”) to increase transparency and comparability among organizations by requiring i) recognition of lease assets and lease liabilities on the balance sheet and ii) disclosure of key information about leasing arrangements. Some changes to the lessor accounting guidance were made to align both of the following: i) the lessor accounting guidance with certain changes made to the lessee accounting guidance and ii) key aspects of the lessor accounting model with revenue recognition guidance. Topic 842 will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable. Statement of Cash Flows. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. The guidance addresses the following specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued guidance that will require companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective or prospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued guidance that will require companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Simplifying the Test for Goodwill Impairment . In January 2017, the FASB issued guidance intended to simplify the subsequent accounting for goodwill acquired in a business combination. Prior guidance required utilizing a two-step process to review goodwill for impairment. A second step was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of the reporting unit's goodwill (as if purchase accounting were performed on the testing date) with the carrying amount of the goodwill. The new guidance eliminates the second step from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss should not exceed the total amount of goodwill allocated to the reporting unit). The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt this guidance when effective, and do not expect it to have a significant impact on our financial statements. Guidance Adopted in 2017 Improvements to Employee Share-Based Payment Accounting. In the first quarter of 2017, we adopted guidance that simplified several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. We prospectively adopted the amendments in this guidance that relate to the classification of excess tax benefits from share-based payment arrangements on the statement of cash flows. The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes. In the three months ended March 31, 2017 , we recognized $ 8 of such excess tax benefits, and, pursuant to the adopted guidance, net income increased by $ 8 , or $0.09 per basic and diluted share, reflecting the tax reduction associated with the excess tax benefits. Prior periods have not been adjusted to reflect the new guidance related to the classification of the excess tax benefits, as we have elected to prospectively adopt such guidance. Accordingly, our statement of cash flows for the three months ended March 31, 2016 reflects $ 27 of such excess tax benefits within net cash used in financing activities. All of the excess tax benefits for the three months ended March 31, 2016 pertain to share based payments that vested prior to 2016, and, accordingly, would not have impacted net income under the new guidance. Other significant components of the adopted guidance include: • Certain aspects of the guidance require a cumulative change to retained earnings upon adoption, though we did no t recognize any such change. In 2016, we utilized all of the prior excess tax benefits from share-based payments that vested through 2016, and, accordingly, no change to retained earnings was required. Additionally, upon adopting this guidance, we elected to record forfeitures of share-based payments as they occur. Making such an election requires a cumulative change to retained earnings upon adoption. However, we historically adjusted estimated forfeitures to reflect actual forfeitures annually, as a result of which no change to retained earnings was required. • The guidance requires that cash paid by an employer to a taxing authority when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. We have historically classified such payments as financing activities, so no retrospective change was required to our 2016 statement of cash flows. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Financial information by segment | The following tables set forth financial information by segment. General rentals Trench, power and pump Total Three Months Ended March 31, 2017 Equipment rentals $ 977 $ 189 $ 1,166 Sales of rental equipment 96 10 106 Sales of new equipment 35 4 39 Contractor supplies sales 14 4 18 Service and other revenues 24 3 27 Total revenue 1,146 210 1,356 Depreciation and amortization expense 264 46 310 Equipment rentals gross profit 360 84 444 Capital expenditures 211 30 241 Three Months Ended March 31, 2016 Equipment rentals $ 955 $ 162 $ 1,117 Sales of rental equipment 106 9 115 Sales of new equipment 26 4 30 Contractor supplies sales 16 3 19 Service and other revenues 26 3 29 Total revenue 1,129 181 1,310 Depreciation and amortization expense 266 44 310 Equipment rentals gross profit 357 68 425 Capital expenditures 104 19 123 March 31, December 31, Total reportable segment assets General rentals $ 10,348 $ 10,496 Trench, power and pump 1,474 1,492 Total assets $ 11,822 $ 11,988 |
Reconciliation to equipment rentals gross profit | The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes: Three Months Ended March 31, 2017 2016 Total equipment rentals gross profit $ 444 $ 425 Gross profit from other lines of business 70 75 Selling, general and administrative expenses (193 ) (177 ) Merger related costs (2 ) — Restructuring charge — (2 ) Non-rental depreciation and amortization (62 ) (67 ) Interest expense, net (94 ) (107 ) Other expense, net (2 ) — Income before provision for income taxes $ 161 $ 147 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | The table below provides certain information concerning restructuring activity during the three months ended March 31, 2017 : Reserve Balance at Charged to Payments Reserve Balance at December 31, 2016 March 31, 2017 Branch closure charges $ 16 $ — $ — $ 16 Severance costs 1 — (1 ) — Total $ 17 $ — $ (1 ) $ 16 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of derivatives on consolidated statements of income | The effect of our derivative instruments on our condensed consolidated statements of income for the three months ended March 31, 2017 and 2016 was as follows: Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Location of income (expense) recognized on derivative/hedged item Amount of income (expense) recognized on derivative Amount of income (expense) recognized on hedged item Amount of income (expense) recognized on derivative Amount of income (expense) recognized on hedged item Derivatives designated as hedging instruments: Fixed price diesel swaps Other income (expense), net (1) $ * $ * Cost of equipment rentals, excluding depreciation (2), (3) * $ (5 ) (2 ) $ (5 ) * Amounts are insignificant (less than $1 ). (1) Represents the ineffective portion of the fixed price diesel swaps. (2) Amounts recognized on derivative represent the effective portion of the fixed price diesel swaps. (3) Amounts recognized on hedged item reflect the use of 1.9 million and 2.6 million gallons and of diesel covered by the fixed price swaps during the three months ended March 31, 2017 and 2016 , respectively. These amounts are reflected, net of cash received from, or paid to, the counterparties to the fixed price swaps, in operating cash flows in our condensed consolidated statement of cash flows. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2017 and December 31, 2016 have been calculated based upon available market information, and were as follows: March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Senior notes $ 6,016 $ 6,246 $ 5,506 $ 5,715 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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: March 31, 2017 December 31, 2016 Accounts Receivable Securitization Facility expiring 2017 (1) $ 550 $ 568 $2.5 billion ABL Facility expiring 2021 (2) 720 1,645 7 5 / 8 percent Senior Notes due 2022 470 469 6 1 / 8 percent Senior Notes due 2023 936 936 4 5 / 8 percent Senior Secured Notes due 2023 991 991 5 3 / 4 percent Senior Notes due 2024 840 839 5 1 / 2 percent Senior Notes due 2025 792 792 5 7 / 8 percent Senior Notes due 2026 (3) 998 740 5 1 / 2 percent Senior Notes due 2027 (4) 989 739 Capital leases 63 71 Total debt (5) 7,349 7,790 Less short-term portion (6) (577 ) (597 ) Total long-term debt $ 6,772 $ 7,193 ___________________ (1) At March 31, 2017 , $18 was available under our accounts receivable securitization facility. The interest rate applicable to the accounts receivable securitization facility was 1.7 percent at March 31, 2017 . During the three months ended March 31, 2017 , the monthly average amount outstanding under the accounts receivable securitization facility was $518 , and the weighted-average interest rate thereon was 1.6 percent . The maximum month-end amount outstanding under the accounts receivable securitization facility during the three months ended March 31, 2017 was $551 . 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, 2017 , there were $ 569 of receivables, net of applicable reserves and other deductions, in the collateral pool. (2) At March 31, 2017 , $1.7 billion was available under our ABL facility, net of $36 of letters of credit. The interest rate applicable to the ABL facility was 2.5 percent at March 31, 2017 . During the three months ended March 31, 2017 , the monthly average amount outstanding under the ABL facility was $1.0 billion, and the weighted-average interest rate thereon was 2.3 percent . The maximum month-end amount outstanding under the ABL facility during the three months ended March 31, 2017 was $1.5 billion . As discussed below, pending the payment of the purchase price for the NES acquisition discussed in note 1 to the condensed consolidated financial statements, the net proceeds from debt issued in February 2017 were used to reduce borrowings under the ABL facility. Following the closing of the NES acquisition on April 3, 2017, we used borrowings under the ABL facility to partially fund the NES acquisition. (3) In February 2017, URNA issued $250 principal amount of 5 7 / 8 percent Senior Notes as an add-on to our existing 5 7 / 8 percent Senior Notes. The net proceeds from the issuance were $258 (including the original issue premium and after deducting offering expenses). Pending the payment of the purchase price for the NES acquisition, the net proceeds from the issuance were used to reduce borrowings under the ABL facility. The acquisition closed on April 3, 2017. Upon closing of the NES acquisition, we used available cash and borrowings under the ABL facility to finance the NES acquisition. After the February 2017 issuance, the aggregate principal amount of outstanding 5 7 / 8 percent Senior Notes was $ 1.0 billion . The newly issued notes have identical terms, and are fungible, with the 5 7 / 8 percent Senior Notes outstanding at December 31, 2016. The carrying value of the 5 7 / 8 percent Senior Notes includes the $11 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2026. The effective interest rate on the 5 7 / 8 percent Senior Notes is 5.7 percent. (4) In February 2017, URNA issued $250 principal amount of 5 1 / 2 percent Senior Notes due 2027 (the "2027 5 1 / 2 percent Senior Notes") as an add-on to our existing 2027 5 1 / 2 percent Senior Notes. The net proceeds from the issuance were $250 (including the original issue premium and after deducting offering expenses). Pending the payment of the purchase price for the NES acquisition, the net proceeds from the issuance were used to reduce borrowings under the ABL facility. Upon closing of the NES acquisition, we used available cash and borrowings under the ABL facility to finance the NES acquisition. After the February 2017 issuance, the aggregate principal amount of outstanding 2027 5 1 / 2 percent Senior Notes was $ 1.0 billion . The newly issued notes have identical terms, and are fungible, with the 2027 5 1 / 2 percent Senior Notes outstanding at December 31, 2016. The carrying value of the 2027 5 1 / 2 percent Senior Notes includes the $3 unamortized portion of the original issue premium recognized in conjunction with the February 2017 issuance, which is being amortized through the maturity date in 2027. The effective interest rate on the 2027 5 1 / 2 percent Senior Notes is 5.5 percent. (5) As discussed above, we completed the NES acquisition on April 3, 2017. The aggregate consideration paid to holders of NES common stock and options was approximately $ 965 . Total debt as of March 31, 2017 reflects $ 500 principal amount of debt issued in connection with the acquisition, as discussed above. Upon closing, we paid the consideration due to holders of NES common stock and options using available cash and drawings on the ABL facility. After payment of such consideration, total outstanding debt was approximately $ 8.0 billion. (6) As of March 31, 2017 , our short-term debt primarily reflects $ 550 of borrowings under our accounts receivable securitization facility. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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): Three Months Ended March 31, 2017 2016 Numerator: Net income available to common stockholders $ 109 $ 92 Denominator: Denominator for basic earnings per share—weighted-average common shares 84,456 90,510 Effect of dilutive securities: Employee stock options 414 263 Restricted stock units 507 170 Denominator for diluted earnings per share—adjusted weighted-average common shares 85,377 90,943 Basic earnings per share $ 1.29 $ 1.01 Diluted earnings per share $ 1.27 $ 1.01 |
Condensed Consolidating Finan25
Condensed Consolidating Financial Information of Guarantor Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
CONDENSED CONSOLIDATING BALANCE SHEET | The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV ASSETS Cash and cash equivalents $ — $ 14 $ — $ 323 $ — $ — $ 337 Accounts receivable, net — 38 — 87 729 — 854 Intercompany receivable (payable) 395 (188 ) (196 ) (117 ) — 106 — Inventory — 68 — 7 — — 75 Prepaid expenses and other assets 6 42 — 6 — — 54 Total current assets 401 (26 ) (196 ) 306 729 106 1,320 Rental equipment, net — 5,631 — 476 — — 6,107 Property and equipment, net 38 319 30 39 — — 426 Investments in subsidiaries 1,342 978 983 — — (3,303 ) — Goodwill — 3,013 — 249 — — 3,262 Other intangible assets, net — 648 — 53 — — 701 Other long-term assets — 6 — — — — 6 Total assets $ 1,781 $ 10,569 $ 817 $ 1,123 $ 729 $ (3,197 ) $ 11,822 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 24 $ — $ 2 $ 550 $ — $ 577 Accounts payable — 344 — 38 — — 382 Accrued expenses and other liabilities — 321 11 25 1 — 358 Total current liabilities 1 689 11 65 551 — 1,317 Long-term debt 2 6,655 111 4 — — 6,772 Deferred taxes 25 1,815 — 71 — — 1,911 Other long-term liabilities — 68 1 — — — 69 Total liabilities 28 9,227 123 140 551 — 10,069 Total stockholders’ equity (deficit) 1,753 1,342 694 983 178 (3,197 ) 1,753 Total liabilities and stockholders’ equity (deficit) $ 1,781 $ 10,569 $ 817 $ 1,123 $ 729 $ (3,197 ) $ 11,822 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV ASSETS Cash and cash equivalents $ — $ 21 $ — $ 291 $ — $ — $ 312 Accounts receivable, net — 38 — 96 786 — 920 Intercompany receivable (payable) 336 (137 ) (188 ) (115 ) — 104 — Inventory — 61 — 7 — — 68 Prepaid expenses and other assets 5 51 — 5 — — 61 Total current assets 341 34 (188 ) 284 786 104 1,361 Rental equipment, net — 5,709 — 480 — — 6,189 Property and equipment, net 38 326 26 40 — — 430 Investments in subsidiaries 1,292 1,013 978 — — (3,283 ) — Goodwill — 3,013 — 247 — — 3,260 Other intangible assets, net — 686 — 56 — — 742 Other long-term assets — 6 — — — — 6 Total assets $ 1,671 $ 10,787 $ 816 $ 1,107 $ 786 $ (3,179 ) $ 11,988 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 25 $ — $ 3 $ 568 $ — $ 597 Accounts payable — 217 — 26 — — 243 Accrued expenses and other liabilities — 305 13 25 1 — 344 Total current liabilities 1 547 13 54 569 — 1,184 Long-term debt 2 7,076 111 4 — — 7,193 Deferred taxes 20 1,805 — 71 — — 1,896 Other long-term liabilities — 67 — — — — 67 Total liabilities 23 9,495 124 129 569 — 10,340 Total stockholders’ equity (deficit) 1,648 1,292 692 978 217 (3,179 ) 1,648 Total liabilities and stockholders’ equity (deficit) $ 1,671 $ 10,787 $ 816 $ 1,107 $ 786 $ (3,179 ) $ 11,988 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME | CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Revenues: Equipment rentals $ — $ 1,070 $ — $ 96 $ — $ — $ 1,166 Sales of rental equipment — 95 — 11 — — 106 Sales of new equipment — 35 — 4 — — 39 Contractor supplies sales — 16 — 2 — — 18 Service and other revenues — 24 — 3 — — 27 Total revenues — 1,240 — 116 — — 1,356 Cost of revenues: Cost of equipment rentals, excluding depreciation — 423 — 51 — — 474 Depreciation of rental equipment — 227 — 21 — — 248 Cost of rental equipment sales — 54 — 6 — — 60 Cost of new equipment sales — 31 — 3 — — 34 Cost of contractor supplies sales — 12 — 1 — — 13 Cost of service and other revenues — 11 — 2 — — 13 Total cost of revenues — 758 — 84 — — 842 Gross profit — 482 — 32 — — 514 Selling, general and administrative expenses 23 145 — 17 8 — 193 Merger related costs — 2 — — — — 2 Non-rental depreciation and amortization 4 52 — 6 — — 62 Operating (loss) income (27 ) 283 — 9 (8 ) — 257 Interest (income) expense, net (2 ) 93 1 1 2 (1 ) 94 Other (income) expense, net (112 ) 124 — 12 (22 ) — 2 Income (loss) before provision (benefit) for income taxes 87 66 (1 ) (4 ) 12 1 161 Provision (benefit) for income taxes 21 28 — (2 ) 5 — 52 Income (loss) before equity in net earnings (loss) of subsidiaries 66 38 (1 ) (2 ) 7 1 109 Equity in net earnings (loss) of subsidiaries 43 5 (2 ) — — (46 ) — Net income (loss) 109 43 (3 ) (2 ) 7 (45 ) 109 Other comprehensive income (loss) 8 8 8 7 — (23 ) 8 Comprehensive income (loss) $ 117 $ 51 $ 5 $ 5 $ 7 $ (68 ) $ 117 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended March 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Revenues: Equipment rentals $ — $ 1,024 $ — $ 93 $ — $ — $ 1,117 Sales of rental equipment — 104 — 11 — — 115 Sales of new equipment — 27 — 3 — — 30 Contractor supplies sales — 17 — 2 — — 19 Service and other revenues — 25 — 4 — — 29 Total revenues — 1,197 — 113 — — 1,310 Cost of revenues: Cost of equipment rentals, excluding depreciation — 404 — 45 — — 449 Depreciation of rental equipment — 221 — 22 — — 243 Cost of rental equipment sales — 62 — 6 — — 68 Cost of new equipment sales — 23 — 2 — — 25 Cost of contractor supplies sales — 12 — 1 — — 13 Cost of service and other revenues — 9 — 3 — — 12 Total cost of revenues — 731 — 79 — — 810 Gross profit — 466 — 34 — — 500 Selling, general and administrative expenses 6 144 — 19 8 — 177 Restructuring charge — 2 — — — — 2 Non-rental depreciation and amortization 4 57 — 6 — — 67 Operating (loss) income (10 ) 263 — 9 (8 ) — 254 Interest (income) expense, net (2 ) 106 1 1 2 (1 ) 107 Other (income) expense, net (106 ) 122 — 9 (25 ) — — Income (loss) before provision for income taxes 98 35 (1 ) (1 ) 15 1 147 Provision (benefit) for income taxes 37 13 — (1 ) 6 — 55 Income (loss) before equity in net earnings (loss) of subsidiaries 61 22 (1 ) — 9 1 92 Equity in net earnings (loss) of subsidiaries 31 9 — — — (40 ) — Net income (loss) 92 31 (1 ) — 9 (39 ) 92 Other comprehensive income (loss) 63 63 62 50 — (175 ) 63 Comprehensive income (loss) $ 155 $ 94 $ 61 $ 50 $ 9 $ (214 ) $ 155 |
CONDENSED CONSOLIDATING CASH FLOW INFORMATION | CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Three Months Ended March 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Net cash provided by (used in) operating activities $ 4 $ 516 $ (1 ) $ 39 $ 65 $ — $ 623 Net cash used in investing activities (4 ) (121 ) — (9 ) — — (134 ) Net cash (used in) provided by financing activities — (402 ) 1 — (65 ) — (466 ) Effect of foreign exchange rates — — — 2 — — 2 Net (decrease) increase in cash and cash equivalents — (7 ) — 32 — — 25 Cash and cash equivalents at beginning of period — 21 — 291 — — 312 Cash and cash equivalents at end of period $ — $ 14 $ — $ 323 $ — $ — $ 337 CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Three Months Ended March 31, 2016 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign SPV Net cash provided by operating activities $ — $ 469 $ — $ 41 $ 94 $ — $ 604 Net cash used in investing activities — (17 ) — — — — (17 ) Net cash used in financing activities — (466 ) — — (94 ) — (560 ) Effect of foreign exchange rates — — — 13 — — 13 Net (decrease) increase in cash and cash equivalents — (14 ) — 54 — — 40 Cash and cash equivalents at beginning of period — 18 — 161 — — 179 Cash and cash equivalents at end of period $ — $ 4 $ — $ 215 $ — $ — $ 219 |
Organization, Description of 26
Organization, Description of Business and Basis of Presentation (Details) | Apr. 03, 2017USD ($) | Mar. 31, 2017USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2016USD ($)employeebranch |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Excess tax benefits due to newly adopted guidance | $ 8,000,000 | |||
Excess tax benefits from share-based payment arrangements | 0 | $ 27,000,000 | ||
Business Acquisition [Line Items] | ||||
Increase to income | $ 109,000,000 | $ 92,000,000 | ||
Increase to basic earnings per share (in dollars per share) | $ / shares | $ 1.29 | $ 1.01 | ||
Increase to diluted earnings per share (in dollars per share) | $ / shares | $ 1.27 | $ 1.01 | ||
Rental equipment | ||||
Business Acquisition [Line Items] | ||||
Property, plant and equipment, net | $ 6,107,000,000 | $ 6,189,000,000 | ||
NES Rentals Holdings II, Inc. | ||||
Business Acquisition [Line Items] | ||||
Number of branches | branch | 73 | |||
Number of employees | employee | 1,100 | |||
NES Rentals Holdings II, Inc. | Rental equipment | ||||
Business Acquisition [Line Items] | ||||
Property, plant and equipment, net | $ 900,000,000 | |||
Merger with NES Rentals Holdings II, Inc. | Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Merger consideration | $ 965,000,000 | |||
Revenue reported by acquired entity for last annual period | $ 369,000,000 | |||
Retained Earnings | ||||
Business Acquisition [Line Items] | ||||
Increase to income | 109,000,000 | |||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | ||||
Business Acquisition [Line Items] | ||||
Increase to income | $ 8,000,000 | |||
Increase to basic earnings per share (in dollars per share) | $ / shares | $ 0.09 | |||
Increase to diluted earnings per share (in dollars per share) | $ / shares | $ 0.09 | |||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | Retained Earnings | ||||
Business Acquisition [Line Items] | ||||
Cumulative change to retained earnings | $ 0 | |||
Owned Equipment Rentals | Equipment Rental Revenue | Product Concentration Risk | ||||
Business Acquisition [Line Items] | ||||
Concentration Risk, Percentage | 87.00% | |||
Owned Equipment Rentals | Sales Revenue, Net | Product Concentration Risk | ||||
Business Acquisition [Line Items] | ||||
Concentration Risk, Percentage | 74.00% | |||
Rental Equipment, New Equipment, and Contractor Supplies | Sales Revenue, Net | Product Concentration Risk | ||||
Business Acquisition [Line Items] | ||||
Concentration Risk, Percentage | 12.00% |
Segment Information (Financial
Segment Information (Financial information by segment) (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($)location | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information | |||
Equipment rentals | $ 1,166 | $ 1,117 | |
Sales of rental equipment | 106 | 115 | |
Sales of new equipment | 39 | 30 | |
Contractor supplies sales | 18 | 19 | |
Service and other revenues | 27 | 29 | |
Total revenues | 1,356 | 1,310 | |
Depreciation and amortization expense | 310 | 310 | |
Gross profit | 514 | 500 | |
Capital expenditures | 241 | 123 | |
Assets | $ 11,822 | $ 11,988 | |
General rentals | |||
Segment Reporting Information | |||
Number of geographic regions entity operates in (locations) | location | 9 | ||
Equipment rentals | $ 977 | 955 | |
Sales of rental equipment | 96 | 106 | |
Sales of new equipment | 35 | 26 | |
Contractor supplies sales | 14 | 16 | |
Service and other revenues | 24 | 26 | |
Total revenues | 1,146 | 1,129 | |
Depreciation and amortization expense | 264 | 266 | |
Capital expenditures | 211 | 104 | |
Assets | 10,348 | 10,496 | |
Trench, power and pump | |||
Segment Reporting Information | |||
Equipment rentals | 189 | 162 | |
Sales of rental equipment | 10 | 9 | |
Sales of new equipment | 4 | 4 | |
Contractor supplies sales | 4 | 3 | |
Service and other revenues | 3 | 3 | |
Total revenues | 210 | 181 | |
Depreciation and amortization expense | 46 | 44 | |
Capital expenditures | 30 | 19 | |
Assets | 1,474 | $ 1,492 | |
Equipment rentals | |||
Segment Reporting Information | |||
Gross profit | 444 | 425 | |
Equipment rentals | General rentals | |||
Segment Reporting Information | |||
Gross profit | 360 | 357 | |
Equipment rentals | Trench, power and pump | |||
Segment Reporting Information | |||
Gross profit | $ 84 | $ 68 |
Segment Information (Reconcilia
Segment Information (Reconciliation to income (loss) from continuing operations) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Gross profit | $ 514 | $ 500 |
Selling, general and administrative expenses | (193) | (177) |
Merger related costs | (2) | 0 |
Restructuring charge | 0 | (2) |
Non-rental depreciation and amortization | (62) | (67) |
Interest expense, net | (94) | (107) |
Other expense, net | (2) | 0 |
Income before provision for income taxes | 161 | 147 |
Equipment rentals | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Gross profit | 444 | 425 |
Other lines of business | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Gross profit | $ 70 | $ 75 |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) $ in Millions | Mar. 31, 2017USD ($)restructuring_program |
Restructuring Cost and Reserve | |
Restructuring costs incurred to date | $ | $ 234 |
Closed Restructuring Programs | |
Restructuring Cost and Reserve | |
Number of restructuring programs | restructuring_program | 3 |
Restructuring Charges (Schedule
Restructuring Charges (Schedule of restructuring charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Beginning reserve balance | $ 17 | |
Charged to Costs and Expenses | 0 | $ 2 |
Payments and Other | (1) | |
Ending reserve balance | 16 | |
Branch closure charges | ||
Restructuring Reserve [Roll Forward] | ||
Beginning reserve balance | 16 | |
Charged to Costs and Expenses | 0 | |
Payments and Other | 0 | |
Ending reserve balance | 16 | |
Severance costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning reserve balance | 1 | |
Charged to Costs and Expenses | 0 | |
Payments and Other | (1) | |
Ending reserve balance | $ 0 |
Derivatives (Narrative) (Detail
Derivatives (Narrative) (Details) gal in Millions | 3 Months Ended |
Mar. 31, 2017gal | |
Diesel swap | |
Derivative [Line Items] | |
Fixed price swap contract (in gallons) | 6 |
Derivatives (Effect of derivati
Derivatives (Effect of derivatives on consolidated statements of income) (Details) - Fixed price swap contracts gal in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)gal | Mar. 31, 2016USD ($)gal | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Purchases of diesel covered by the fixed price swaps (in gallons) | gal | 1.9 | 2.6 |
Designated as hedging instruments | Other income (expense), net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of income (expense) recognized on derivative | $ 0 | $ 0 |
Designated as hedging instruments | Cost of equipment rentals, excluding depreciation | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of income (expense) recognized on derivative | 0 | (2) |
Amount of income (expense) recognized on hedged item | $ (5) | $ (5) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - Diesel swap gal in Millions | 3 Months Ended |
Mar. 31, 2017$ / galgal | |
Derivatives, Fair Value [Line Items] | |
Fixed price swap contract (in gallons) | gal | 6 |
Average contract price (in dollars per gallon) | 2.56 |
Average forward price (in dollars per gallon) | 2.60 |
Fair Value Measurements (Fair v
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,016 | $ 5,506 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,246 | $ 5,715 |
Debt (Schedule of long-term deb
Debt (Schedule of long-term debt instruments) (Details) - USD ($) | Apr. 03, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument | ||||
Total debt | $ 7,349,000,000 | $ 7,790,000,000 | ||
Less short-term portion | (577,000,000) | (597,000,000) | ||
Total long-term debt | 6,772,000,000 | 7,193,000,000 | ||
Merger with NES Rentals Holdings II, Inc. | ||||
Debt Instrument | ||||
Face amount | $ 500,000,000 | |||
Merger with NES Rentals Holdings II, Inc. | Subsequent Event | ||||
Debt Instrument | ||||
Aggregate principal amount outstanding | $ 8,000,000,000 | |||
Merger consideration | $ 965,000,000 | |||
Accounts Receivable Securitization Facility expiring 2017 | ||||
Debt Instrument | ||||
Credit facility interest rate at period end | 1.70% | |||
$2.5 billion ABL Facility expiring 2021 | ||||
Debt Instrument | ||||
Maximum borrowing capacity | $ 2,500,000,000 | $ 2,500,000,000 | ||
7 5/8 percent Senior Notes | ||||
Debt Instrument | ||||
Stated interest rate | 7.625% | 7.625% | ||
6 1/8 percent Senior Notes | ||||
Debt Instrument | ||||
Stated interest rate | 6.125% | 6.125% | ||
4 5/8 percent Senior Secured Notes | ||||
Debt Instrument | ||||
Stated interest rate | 4.625% | 4.625% | ||
5 3/4 percent Senior Notes due 2024 | ||||
Debt Instrument | ||||
Stated interest rate | 5.75% | 5.75% | ||
5 1/2 percent Senior Notes due 2025 | ||||
Debt Instrument | ||||
Stated interest rate | 5.50% | 5.50% | ||
5 7/8 percent Senior Notes due 2026 | ||||
Debt Instrument | ||||
Stated interest rate | 5.875% | 5.875% | ||
5 1/2 percent Senior Notes due 2027 | ||||
Debt Instrument | ||||
Stated interest rate | 5.50% | 5.50% | ||
Capital leases | ||||
Debt Instrument | ||||
Total debt | $ 63,000,000 | $ 71,000,000 | ||
Credit facility | $2.5 billion ABL Facility expiring 2021 | ||||
Debt Instrument | ||||
Total debt | 720,000,000 | 1,645,000,000 | ||
Current borrowing capacity under credit facility | $ 1,700,000,000 | |||
Credit facility interest rate at period end | 2.50% | |||
Letters of credit outstanding | $ 36,000,000 | |||
Average outstanding amount | $ 1,000,000,000 | |||
Weighted average interest rate, long-term | 2.30% | |||
ABL Facility maximum month-end outstanding amount | $ 1,500,000,000 | |||
Senior notes | 7 5/8 percent Senior Notes | ||||
Debt Instrument | ||||
Total debt | 470,000,000 | 469,000,000 | ||
Senior notes | 6 1/8 percent Senior Notes | ||||
Debt Instrument | ||||
Total debt | 936,000,000 | 936,000,000 | ||
Senior notes | 5 3/4 percent Senior Notes due 2024 | ||||
Debt Instrument | ||||
Total debt | 840,000,000 | 839,000,000 | ||
Senior notes | 5 1/2 percent Senior Notes due 2025 | ||||
Debt Instrument | ||||
Total debt | 792,000,000 | 792,000,000 | ||
Senior notes | 5 7/8 percent Senior Notes due 2026 | ||||
Debt Instrument | ||||
Total debt | $ 998,000,000 | 740,000,000 | ||
Senior notes | 5 7/8 percent Senior Notes due 2026 | URNA | ||||
Debt Instrument | ||||
Credit facility interest rate at period end | 5.70% | |||
Face amount | $ 250,000,000 | |||
Proceeds from issuance of long-term debt | 258,000,000 | |||
Aggregate principal amount outstanding | $ 1,000,000,000 | |||
Unamortized issuance premium | 11,000,000 | |||
Senior notes | 5 1/2 percent Senior Notes due 2027 | ||||
Debt Instrument | ||||
Total debt | $ 989,000,000 | 739,000,000 | ||
Senior notes | 5 1/2 percent Senior Notes due 2027 | URNA | ||||
Debt Instrument | ||||
Credit facility interest rate at period end | 5.50% | |||
Face amount | 250,000,000 | |||
Proceeds from issuance of long-term debt | $ 250,000,000 | |||
Aggregate principal amount outstanding | $ 1,000,000,000 | |||
Unamortized issuance premium | 3,000,000 | |||
Senior secured notes | 4 5/8 percent Senior Secured Notes | ||||
Debt Instrument | ||||
Total debt | 991,000,000 | 991,000,000 | ||
Accounts receivable facility | Accounts Receivable Securitization Facility expiring 2017 | ||||
Debt Instrument | ||||
Total debt | 550,000,000 | $ 568,000,000 | ||
Current borrowing capacity under credit facility | 18,000,000 | |||
Average outstanding amount under facility | $ 518,000,000 | |||
Weighted average interest rate, short-term | 1.60% | |||
A/R Securitization maximum month-end outstanding amount | $ 551,000,000 | |||
Collateral amount | $ 569,000,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2017 | |
ABL Facility | |
Debt Instrument | |
Maximum revolving credit amount percentage | 10.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income available to common stockholders | $ 109 | $ 92 |
Denominator: | ||
Denominator for basic earnings per share—weighted-average common shares (in shares) | 84,456 | 90,510 |
Effect of dilutive securities: | ||
Denominator for diluted earnings per share—adjusted weighted-average common shares (in shares) | 85,377 | 90,943 |
Basic earnings per share (in dollars per share) | $ 1.29 | $ 1.01 |
Diluted earnings per share (in dollars per share) | $ 1.27 | $ 1.01 |
Employee stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities, share-based payment arrangements (in shares) | 414 | 263 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Effect of dilutive securities, share-based payment arrangements (in shares) | 507 | 170 |
Condensed Consolidating Finan38
Condensed Consolidating Financial Information of Guarantor Subsidiaries - CONDENSED CONSOLIDATING BALANCE SHEET (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Cash and cash equivalents | $ 337 | $ 312 | $ 219 | $ 179 |
Accounts receivable, net | 854 | 920 | ||
Intercompany receivable (payable) | 0 | 0 | ||
Inventory | 75 | 68 | ||
Prepaid expenses and other assets | 54 | 61 | ||
Total current assets | 1,320 | 1,361 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 3,262 | 3,260 | ||
Other intangible assets, net | 701 | 742 | ||
Other long-term assets | 6 | 6 | ||
Total assets | 11,822 | 11,988 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 577 | 597 | ||
Accounts payable | 382 | 243 | ||
Accrued expenses and other liabilities | 358 | 344 | ||
Total current liabilities | 1,317 | 1,184 | ||
Long-term debt | 6,772 | 7,193 | ||
Deferred taxes | 1,911 | 1,896 | ||
Other long-term liabilities | 69 | 67 | ||
Total liabilities | 10,069 | 10,340 | ||
Total stockholders’ equity (deficit) | 1,753 | 1,648 | ||
Total liabilities and stockholders’ equity | 11,822 | 11,988 | ||
Eliminations | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Intercompany receivable (payable) | 106 | 104 | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Total current assets | 106 | 104 | ||
Investments in subsidiaries | (3,303) | (3,283) | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other long-term assets | 0 | 0 | ||
Total assets | (3,197) | (3,179) | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses and other liabilities | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Deferred taxes | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Total stockholders’ equity (deficit) | (3,197) | (3,179) | ||
Total liabilities and stockholders’ equity | $ (3,197) | (3,179) | ||
Parent | ||||
Condensed Financial Information Other Details [Abstract] | ||||
Ownership percentage in subsidiaries | 100.00% | |||
ASSETS | ||||
Cash and cash equivalents | $ 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Intercompany receivable (payable) | 395 | 336 | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other assets | 6 | 5 | ||
Total current assets | 401 | 341 | ||
Investments in subsidiaries | 1,342 | 1,292 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other long-term assets | 0 | 0 | ||
Total assets | 1,781 | 1,671 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 1 | 1 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses and other liabilities | 0 | 0 | ||
Total current liabilities | 1 | 1 | ||
Long-term debt | 2 | 2 | ||
Deferred taxes | 25 | 20 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 28 | 23 | ||
Total stockholders’ equity (deficit) | 1,753 | 1,648 | ||
Total liabilities and stockholders’ equity | 1,781 | 1,671 | ||
URNA | ||||
ASSETS | ||||
Cash and cash equivalents | 14 | 21 | 4 | 18 |
Accounts receivable, net | 38 | 38 | ||
Intercompany receivable (payable) | (188) | (137) | ||
Inventory | 68 | 61 | ||
Prepaid expenses and other assets | 42 | 51 | ||
Total current assets | (26) | 34 | ||
Investments in subsidiaries | 978 | 1,013 | ||
Goodwill | 3,013 | 3,013 | ||
Other intangible assets, net | 648 | 686 | ||
Other long-term assets | 6 | 6 | ||
Total assets | 10,569 | 10,787 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 24 | 25 | ||
Accounts payable | 344 | 217 | ||
Accrued expenses and other liabilities | 321 | 305 | ||
Total current liabilities | 689 | 547 | ||
Long-term debt | 6,655 | 7,076 | ||
Deferred taxes | 1,815 | 1,805 | ||
Other long-term liabilities | 68 | 67 | ||
Total liabilities | 9,227 | 9,495 | ||
Total stockholders’ equity (deficit) | 1,342 | 1,292 | ||
Total liabilities and stockholders’ equity | $ 10,569 | 10,787 | ||
Guarantor Subsidiaries | ||||
Condensed Financial Information Other Details [Abstract] | ||||
Ownership percentage in subsidiaries | 100.00% | |||
ASSETS | ||||
Cash and cash equivalents | $ 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Intercompany receivable (payable) | (196) | (188) | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Total current assets | (196) | (188) | ||
Investments in subsidiaries | 983 | 978 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other long-term assets | 0 | 0 | ||
Total assets | 817 | 816 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses and other liabilities | 11 | 13 | ||
Total current liabilities | 11 | 13 | ||
Long-term debt | 111 | 111 | ||
Deferred taxes | 0 | 0 | ||
Other long-term liabilities | 1 | 0 | ||
Total liabilities | 123 | 124 | ||
Total stockholders’ equity (deficit) | 694 | 692 | ||
Total liabilities and stockholders’ equity | 817 | 816 | ||
Non Guarantor Subsidiaries - Foreign | ||||
ASSETS | ||||
Cash and cash equivalents | 323 | 291 | 215 | 161 |
Accounts receivable, net | 87 | 96 | ||
Intercompany receivable (payable) | (117) | (115) | ||
Inventory | 7 | 7 | ||
Prepaid expenses and other assets | 6 | 5 | ||
Total current assets | 306 | 284 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 249 | 247 | ||
Other intangible assets, net | 53 | 56 | ||
Other long-term assets | 0 | 0 | ||
Total assets | 1,123 | 1,107 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 2 | 3 | ||
Accounts payable | 38 | 26 | ||
Accrued expenses and other liabilities | 25 | 25 | ||
Total current liabilities | 65 | 54 | ||
Long-term debt | 4 | 4 | ||
Deferred taxes | 71 | 71 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 140 | 129 | ||
Total stockholders’ equity (deficit) | 983 | 978 | ||
Total liabilities and stockholders’ equity | 1,123 | 1,107 | ||
Non Guarantor Subsidiaries - SPV | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net | 729 | 786 | ||
Intercompany receivable (payable) | 0 | 0 | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Total current assets | 729 | 786 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other long-term assets | 0 | 0 | ||
Total assets | 729 | 786 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||
Short-term debt and current maturities of long-term debt | 550 | 568 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses and other liabilities | 1 | 1 | ||
Total current liabilities | 551 | 569 | ||
Long-term debt | 0 | 0 | ||
Deferred taxes | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 551 | 569 | ||
Total stockholders’ equity (deficit) | 178 | 217 | ||
Total liabilities and stockholders’ equity | 729 | 786 | ||
Rental equipment, net | ||||
ASSETS | ||||
Property, plant and equipment, net | 6,107 | 6,189 | ||
Rental equipment, net | Eliminations | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | 0 | ||
Rental equipment, net | Parent | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | 0 | ||
Rental equipment, net | URNA | ||||
ASSETS | ||||
Property, plant and equipment, net | 5,631 | 5,709 | ||
Rental equipment, net | Guarantor Subsidiaries | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | 0 | ||
Rental equipment, net | Non Guarantor Subsidiaries - Foreign | ||||
ASSETS | ||||
Property, plant and equipment, net | 476 | 480 | ||
Rental equipment, net | Non Guarantor Subsidiaries - SPV | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | 0 | ||
Property and equipment, net | ||||
ASSETS | ||||
Property, plant and equipment, net | 426 | 430 | ||
Property and equipment, net | Eliminations | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | 0 | ||
Property and equipment, net | Parent | ||||
ASSETS | ||||
Property, plant and equipment, net | 38 | 38 | ||
Property and equipment, net | URNA | ||||
ASSETS | ||||
Property, plant and equipment, net | 319 | 326 | ||
Property and equipment, net | Guarantor Subsidiaries | ||||
ASSETS | ||||
Property, plant and equipment, net | 30 | 26 | ||
Property and equipment, net | Non Guarantor Subsidiaries - Foreign | ||||
ASSETS | ||||
Property, plant and equipment, net | 39 | 40 | ||
Property and equipment, net | Non Guarantor Subsidiaries - SPV | ||||
ASSETS | ||||
Property, plant and equipment, net | 0 | $ 0 | ||
ABL Facility | ||||
Condensed Financial Information Other Details [Abstract] | ||||
Line of credit facility, restricted payment capacity | 810 | |||
ABL Facility | URNA | ||||
Condensed Financial Information Other Details [Abstract] | ||||
Line of credit facility, restricted payment capacity | $ 415 |
Condensed Consolidating Finan39
Condensed Consolidating Financial Information of Guarantor Subsidiaries - CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues: | |||
Equipment rentals | $ 1,166 | $ 1,117 | |
Sales of rental equipment | 106 | 115 | |
Sales of new equipment | 39 | 30 | |
Contractor supplies sales | 18 | 19 | |
Service and other revenues | 27 | 29 | |
Total revenues | 1,356 | 1,310 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 474 | 449 | |
Depreciation of rental equipment | 248 | 243 | |
Cost of rental equipment sales | 60 | 68 | |
Cost of new equipment sales | 34 | 25 | |
Cost of contractor supplies sales | 13 | 13 | |
Cost of service and other revenues | 13 | 12 | |
Total cost of revenues | 842 | 810 | |
Gross profit | 514 | 500 | |
Selling, general and administrative expenses | 193 | 177 | |
Merger related costs | 2 | 0 | |
Restructuring charge | 0 | 2 | |
Non-rental depreciation and amortization | 62 | 67 | |
Operating income | 257 | 254 | |
Interest (income) expense, net | 94 | 107 | |
Other (income) expense, net | 2 | 0 | |
Income before provision for income taxes | 161 | 147 | |
Provision (benefit) for income taxes | 52 | 55 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | 109 | 92 | |
Equity in net earnings (loss) of subsidiaries | 0 | 0 | |
Net income | 109 | 92 | |
Other comprehensive (loss) income | 8 | 63 | |
Comprehensive income | [1] | 117 | 155 |
Eliminations | |||
Revenues: | |||
Equipment rentals | 0 | 0 | |
Sales of rental equipment | 0 | 0 | |
Sales of new equipment | 0 | 0 | |
Contractor supplies sales | 0 | 0 | |
Service and other revenues | 0 | 0 | |
Total revenues | 0 | 0 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 0 | 0 | |
Depreciation of rental equipment | 0 | 0 | |
Cost of rental equipment sales | 0 | 0 | |
Cost of new equipment sales | 0 | 0 | |
Cost of contractor supplies sales | 0 | 0 | |
Cost of service and other revenues | 0 | 0 | |
Total cost of revenues | 0 | 0 | |
Gross profit | 0 | 0 | |
Selling, general and administrative expenses | 0 | 0 | |
Merger related costs | 0 | ||
Restructuring charge | 0 | ||
Non-rental depreciation and amortization | 0 | 0 | |
Operating income | 0 | 0 | |
Interest (income) expense, net | (1) | (1) | |
Other (income) expense, net | 0 | 0 | |
Income before provision for income taxes | 1 | 1 | |
Provision (benefit) for income taxes | 0 | 0 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | 1 | 1 | |
Equity in net earnings (loss) of subsidiaries | (46) | (40) | |
Net income | (45) | (39) | |
Other comprehensive (loss) income | (23) | (175) | |
Comprehensive income | (68) | (214) | |
Parent | |||
Revenues: | |||
Equipment rentals | 0 | 0 | |
Sales of rental equipment | 0 | 0 | |
Sales of new equipment | 0 | 0 | |
Contractor supplies sales | 0 | 0 | |
Service and other revenues | 0 | 0 | |
Total revenues | 0 | 0 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 0 | 0 | |
Depreciation of rental equipment | 0 | 0 | |
Cost of rental equipment sales | 0 | 0 | |
Cost of new equipment sales | 0 | 0 | |
Cost of contractor supplies sales | 0 | 0 | |
Cost of service and other revenues | 0 | 0 | |
Total cost of revenues | 0 | 0 | |
Gross profit | 0 | 0 | |
Selling, general and administrative expenses | 23 | 6 | |
Merger related costs | 0 | ||
Restructuring charge | 0 | ||
Non-rental depreciation and amortization | 4 | 4 | |
Operating income | (27) | (10) | |
Interest (income) expense, net | (2) | (2) | |
Other (income) expense, net | (112) | (106) | |
Income before provision for income taxes | 87 | 98 | |
Provision (benefit) for income taxes | 21 | 37 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | 66 | 61 | |
Equity in net earnings (loss) of subsidiaries | 43 | 31 | |
Net income | 109 | 92 | |
Other comprehensive (loss) income | 8 | 63 | |
Comprehensive income | 117 | 155 | |
URNA | |||
Revenues: | |||
Equipment rentals | 1,070 | 1,024 | |
Sales of rental equipment | 95 | 104 | |
Sales of new equipment | 35 | 27 | |
Contractor supplies sales | 16 | 17 | |
Service and other revenues | 24 | 25 | |
Total revenues | 1,240 | 1,197 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 423 | 404 | |
Depreciation of rental equipment | 227 | 221 | |
Cost of rental equipment sales | 54 | 62 | |
Cost of new equipment sales | 31 | 23 | |
Cost of contractor supplies sales | 12 | 12 | |
Cost of service and other revenues | 11 | 9 | |
Total cost of revenues | 758 | 731 | |
Gross profit | 482 | 466 | |
Selling, general and administrative expenses | 145 | 144 | |
Merger related costs | 2 | ||
Restructuring charge | 2 | ||
Non-rental depreciation and amortization | 52 | 57 | |
Operating income | 283 | 263 | |
Interest (income) expense, net | 93 | 106 | |
Other (income) expense, net | 124 | 122 | |
Income before provision for income taxes | 66 | 35 | |
Provision (benefit) for income taxes | 28 | 13 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | 38 | 22 | |
Equity in net earnings (loss) of subsidiaries | 5 | 9 | |
Net income | 43 | 31 | |
Other comprehensive (loss) income | 8 | 63 | |
Comprehensive income | 51 | 94 | |
Guarantor Subsidiaries | |||
Revenues: | |||
Equipment rentals | 0 | 0 | |
Sales of rental equipment | 0 | 0 | |
Sales of new equipment | 0 | 0 | |
Contractor supplies sales | 0 | 0 | |
Service and other revenues | 0 | 0 | |
Total revenues | 0 | 0 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 0 | 0 | |
Depreciation of rental equipment | 0 | 0 | |
Cost of rental equipment sales | 0 | 0 | |
Cost of new equipment sales | 0 | 0 | |
Cost of contractor supplies sales | 0 | 0 | |
Cost of service and other revenues | 0 | 0 | |
Total cost of revenues | 0 | 0 | |
Gross profit | 0 | 0 | |
Selling, general and administrative expenses | 0 | 0 | |
Merger related costs | 0 | ||
Restructuring charge | 0 | ||
Non-rental depreciation and amortization | 0 | 0 | |
Operating income | 0 | 0 | |
Interest (income) expense, net | 1 | 1 | |
Other (income) expense, net | 0 | 0 | |
Income before provision for income taxes | (1) | (1) | |
Provision (benefit) for income taxes | 0 | 0 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | (1) | (1) | |
Equity in net earnings (loss) of subsidiaries | (2) | 0 | |
Net income | (3) | (1) | |
Other comprehensive (loss) income | 8 | 62 | |
Comprehensive income | 5 | 61 | |
Non Guarantor Subsidiaries - Foreign | |||
Revenues: | |||
Equipment rentals | 96 | 93 | |
Sales of rental equipment | 11 | 11 | |
Sales of new equipment | 4 | 3 | |
Contractor supplies sales | 2 | 2 | |
Service and other revenues | 3 | 4 | |
Total revenues | 116 | 113 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 51 | 45 | |
Depreciation of rental equipment | 21 | 22 | |
Cost of rental equipment sales | 6 | 6 | |
Cost of new equipment sales | 3 | 2 | |
Cost of contractor supplies sales | 1 | 1 | |
Cost of service and other revenues | 2 | 3 | |
Total cost of revenues | 84 | 79 | |
Gross profit | 32 | 34 | |
Selling, general and administrative expenses | 17 | 19 | |
Merger related costs | 0 | ||
Restructuring charge | 0 | ||
Non-rental depreciation and amortization | 6 | 6 | |
Operating income | 9 | 9 | |
Interest (income) expense, net | 1 | 1 | |
Other (income) expense, net | 12 | 9 | |
Income before provision for income taxes | (4) | (1) | |
Provision (benefit) for income taxes | (2) | (1) | |
Income (loss) before equity in net earnings (loss) of subsidiaries | (2) | 0 | |
Equity in net earnings (loss) of subsidiaries | 0 | 0 | |
Net income | (2) | 0 | |
Other comprehensive (loss) income | 7 | 50 | |
Comprehensive income | 5 | 50 | |
Non Guarantor Subsidiaries - SPV | |||
Revenues: | |||
Equipment rentals | 0 | 0 | |
Sales of rental equipment | 0 | 0 | |
Sales of new equipment | 0 | 0 | |
Contractor supplies sales | 0 | 0 | |
Service and other revenues | 0 | 0 | |
Total revenues | 0 | 0 | |
Cost of revenues: | |||
Cost of equipment rentals, excluding depreciation | 0 | 0 | |
Depreciation of rental equipment | 0 | 0 | |
Cost of rental equipment sales | 0 | 0 | |
Cost of new equipment sales | 0 | 0 | |
Cost of contractor supplies sales | 0 | 0 | |
Cost of service and other revenues | 0 | 0 | |
Total cost of revenues | 0 | 0 | |
Gross profit | 0 | 0 | |
Selling, general and administrative expenses | 8 | 8 | |
Merger related costs | 0 | ||
Restructuring charge | 0 | ||
Non-rental depreciation and amortization | 0 | 0 | |
Operating income | (8) | (8) | |
Interest (income) expense, net | 2 | 2 | |
Other (income) expense, net | (22) | (25) | |
Income before provision for income taxes | 12 | 15 | |
Provision (benefit) for income taxes | 5 | 6 | |
Income (loss) before equity in net earnings (loss) of subsidiaries | 7 | 9 | |
Equity in net earnings (loss) of subsidiaries | 0 | 0 | |
Net income | 7 | 9 | |
Other comprehensive (loss) income | 0 | 0 | |
Comprehensive income | $ 7 | $ 9 | |
[1] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income during 2017 or 2016. There is no tax impact related to the foreign currency translation adjustments, as the earnings are considered permanently reinvested. There were no material taxes associated with other comprehensive income during 2017 or 2016. |
Condensed Consolidating Finan40
Condensed Consolidating Financial Information of Guarantor Subsidiaries - CONDENSED CONSOLIDATING CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ 623 | $ 604 |
Net cash used in investing activities | (134) | (17) |
Net cash (used in) provided by financing activities | (466) | (560) |
Effect of foreign exchange rates | 2 | 13 |
Net increase in cash and cash equivalents | 25 | 40 |
Cash and cash equivalents at beginning of period | 312 | 179 |
Cash and cash equivalents at end of period | 337 | 219 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Parent | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 4 | 0 |
Net cash used in investing activities | (4) | 0 |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
URNA | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 516 | 469 |
Net cash used in investing activities | (121) | (17) |
Net cash (used in) provided by financing activities | (402) | (466) |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | (7) | (14) |
Cash and cash equivalents at beginning of period | 21 | 18 |
Cash and cash equivalents at end of period | 14 | 4 |
Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (1) | 0 |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 1 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Non Guarantor Subsidiaries - Foreign | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 39 | 41 |
Net cash used in investing activities | (9) | 0 |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 2 | 13 |
Net increase in cash and cash equivalents | 32 | 54 |
Cash and cash equivalents at beginning of period | 291 | 161 |
Cash and cash equivalents at end of period | 323 | 215 |
Non Guarantor Subsidiaries - SPV | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 65 | 94 |
Net cash used in investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | (65) | (94) |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |