| 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”) and United Rentals International Management LLC, which is an immaterial subsidiary, 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, the SPV or United Rentals International Management LLC (together, the “non-guarantor subsidiaries”). The SPV and United Rentals International Management LLC are presented together in the “Domestic” columns in the tables below. The receivable assets owned by the SPV have been sold or contributed by URNA to the SPV and are not available to satisfy the obligations of URNA or Parent’s other subsidiaries. The guarantor subsidiaries are all 100 percent -owned and the guarantees are made on a joint and several basis. The guarantees are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met, designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants or, other than with respect to the guarantees of the 5 3 / 4 percent Senior Notes due 2024, the notes being rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA. The guarantees are also subject to subordination provisions (to the same extent that the obligations of the issuer under the relevant notes are subordinated to other debt of the issuer) and to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws. Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that the guarantees of the guarantor subsidiaries comply with the conditions set forth in Rule 3-10 and therefore continue to utilize Rule 3-10 to present condensed consolidating financial information for Holdings, URNA, the guarantor subsidiaries and the non-guarantor subsidiaries. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information is presented. URNA covenants in the ABL facility, accounts receivable securitization facility and the other agreements governing our debt impose operating and financial restrictions on URNA, Parent and the guarantor subsidiaries, including limitations on the ability to make share repurchases and dividend payments. As of September 30, 2018 , the amount available for distribution under the most restrictive of these covenants was $ 709 . The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of September 30, 2018 , our total available capacity for making share repurchases and dividend payments, which includes URNA’s capacity to make restricted payments and the intercompany receivable balance of Parent, was $2.034 billion . The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2018 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic ASSETS Cash and cash equivalents $ — $ 17 $ — $ 48 $ — $ — $ 65 Accounts receivable, net — — — 141 1,297 — 1,438 Intercompany receivable (payable) 1,325 (1,200 ) (96 ) (29 ) — — — Inventory — 94 — 10 — — 104 Prepaid expenses and other assets — 81 — 4 — — 85 Total current assets 1,325 (1,008 ) (96 ) 174 1,297 — 1,692 Rental equipment, net — 8,243 — 667 — — 8,910 Property and equipment, net 51 394 40 44 — — 529 Investments in subsidiaries 1,973 1,534 966 — 22 (4,495 ) — Goodwill — 3,902 — 411 — — 4,313 Other intangible assets, net — 812 — 83 — — 895 Other long-term assets 7 8 — — — — 15 Total assets $ 3,356 $ 13,885 $ 910 $ 1,379 $ 1,319 $ (4,495 ) $ 16,354 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 28 $ — $ 2 $ 865 $ — $ 896 Accounts payable — 624 — 64 — — 688 Accrued expenses and other liabilities — 449 14 38 2 — 503 Total current liabilities 1 1,101 14 104 867 — 2,087 Long-term debt — 9,170 9 3 — — 9,182 Deferred taxes 21 1,518 — 89 — — 1,628 Other long-term liabilities — 123 — — — — 123 Total liabilities 22 11,912 23 196 867 — 13,020 Total stockholders’ equity (deficit) 3,334 1,973 887 1,183 452 (4,495 ) 3,334 Total liabilities and stockholders’ equity (deficit) $ 3,356 $ 13,885 $ 910 $ 1,379 $ 1,319 $ (4,495 ) $ 16,354 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic ASSETS Cash and cash equivalents $ — $ 23 $ — $ 329 $ — $ — $ 352 Accounts receivable, net — 56 — 119 1,058 — 1,233 Intercompany receivable (payable) 887 (677 ) (198 ) (124 ) — 112 — Inventory — 68 — 7 — — 75 Prepaid expenses and other assets 4 219 111 2 — (224 ) 112 Total current assets 891 (311 ) (87 ) 333 1,058 (112 ) 1,772 Rental equipment, net — 7,264 — 560 — — 7,824 Property and equipment, net 41 352 32 42 — — 467 Investments in subsidiaries 2,194 1,148 1,087 — — (4,429 ) — Goodwill — 3,815 — 267 — — 4,082 Other intangible assets, net — 827 — 48 — — 875 Other long-term assets 3 7 — — — — 10 Total assets $ 3,129 $ 13,102 $ 1,032 $ 1,250 $ 1,058 $ (4,541 ) $ 15,030 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Short-term debt and current maturities of long-term debt $ 1 $ 25 $ — $ 2 $ 695 $ — $ 723 Accounts payable — 366 — 43 — — 409 Accrued expenses and other liabilities — 477 17 41 1 — 536 Total current liabilities 1 868 17 86 696 — 1,668 Long-term debt 1 8,596 117 3 — — 8,717 Deferred taxes 21 1,324 — 74 — — 1,419 Other long-term liabilities — 120 — — — — 120 Total liabilities 23 10,908 134 163 696 — 11,924 Total stockholders’ equity (deficit) 3,106 2,194 898 1,087 362 (4,541 ) 3,106 Total liabilities and stockholders’ equity (deficit) $ 3,129 $ 13,102 $ 1,032 $ 1,250 $ 1,058 $ (4,541 ) $ 15,030 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2018 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Revenues: Equipment rentals $ — $ 1,715 $ — $ 146 $ — $ — $ 1,861 Sales of rental equipment — 128 — 12 — — 140 Sales of new equipment — 46 — 8 — — 54 Contractor supplies sales — 22 — 2 — — 24 Service and other revenues — 32 — 5 — — 37 Total revenues — 1,943 — 173 — — 2,116 Cost of revenues: Cost of equipment rentals, excluding depreciation — 614 — 57 — — 671 Depreciation of rental equipment — 316 — 27 — — 343 Cost of rental equipment sales — 76 — 7 — — 83 Cost of new equipment sales — 40 — 6 — — 46 Cost of contractor supplies sales — 14 — 1 — — 15 Cost of service and other revenues — 16 — 4 — — 20 Total cost of revenues — 1,076 — 102 — — 1,178 Gross profit — 867 — 71 — — 938 Selling, general and administrative expenses 28 197 — 24 16 — 265 Merger related costs — 11 — — — — 11 Restructuring charge — 8 — 1 — — 9 Non-rental depreciation and amortization 3 65 — 7 — — 75 Operating (loss) income (31 ) 586 — 39 (16 ) — 578 Interest (income) expense, net (11 ) 122 (1 ) 1 7 — 118 Other (income) expense, net (172 ) 196 — 13 (37 ) — — Income before provision for income taxes 152 268 1 25 14 — 460 Provision for income taxes 45 71 — 8 3 — 127 Income before equity in net earnings (loss) of subsidiaries 107 197 1 17 11 — 333 Equity in net earnings (loss) of subsidiaries 226 29 17 — — (272 ) — Net income (loss) 333 226 18 17 11 (272 ) 333 Other comprehensive income (loss) 18 18 18 18 — (54 ) 18 Comprehensive income (loss) $ 351 $ 244 $ 36 $ 35 $ 11 $ (326 ) $ 351 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Revenues: Equipment rentals $ — $ 1,407 $ — $ 129 $ — $ — $ 1,536 Sales of rental equipment — 118 — 21 — — 139 Sales of new equipment — 36 — 4 — — 40 Contractor supplies sales — 18 — 3 — — 21 Service and other revenues — 27 — 3 — — 30 Total revenues — 1,606 — 160 — — 1,766 Cost of revenues: Cost of equipment rentals, excluding depreciation — 502 — 55 — — 557 Depreciation of rental equipment — 266 — 24 — — 290 Cost of rental equipment sales — 73 — 11 — — 84 Cost of new equipment sales — 31 — 3 — — 34 Cost of contractor supplies sales — 12 — 2 — — 14 Cost of service and other revenues — 12 — 2 — — 14 Total cost of revenues — 896 — 97 — — 993 Gross profit — 710 — 63 — — 773 Selling, general and administrative expenses 42 167 — 19 9 — 237 Merger related costs — 16 — — — — 16 Restructuring charge — 8 — 1 — — 9 Non-rental depreciation and amortization 3 54 — 6 — — 63 Operating (loss) income (45 ) 465 — 37 (9 ) — 448 Interest (income) expense, net (5 ) 133 1 1 3 (2 ) 131 Other (income) expense, net (144 ) 154 — 10 (25 ) — (5 ) Income (loss) before provision for income taxes 104 178 (1 ) 26 13 2 322 Provision for income taxes 39 73 — 7 4 — 123 Income (loss) before equity in net earnings (loss) of subsidiaries 65 105 (1 ) 19 9 2 199 Equity in net earnings (loss) of subsidiaries 134 29 19 — — (182 ) — Net income (loss) 199 134 18 19 9 (180 ) 199 Other comprehensive income (loss) 42 42 41 33 — (116 ) 42 Comprehensive income (loss) $ 241 $ 176 $ 59 $ 52 $ 9 $ (296 ) $ 241 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2018 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Revenues: Equipment rentals $ — $ 4,568 $ — $ 383 $ — $ — $ 4,951 Sales of rental equipment — 435 — 43 — — 478 Sales of new equipment — 123 — 17 — — 140 Contractor supplies sales — 58 — 8 — — 66 Service and other revenues — 92 — 14 — — 106 Total revenues — 5,276 — 465 — — 5,741 Cost of revenues: Cost of equipment rentals, excluding depreciation — 1,710 — 173 — — 1,883 Depreciation of rental equipment — 911 — 77 — — 988 Cost of rental equipment sales — 259 — 23 — — 282 Cost of new equipment sales — 107 — 14 — — 121 Cost of contractor supplies sales — 38 — 5 — — 43 Cost of service and other revenues — 49 — 9 — — 58 Total cost of revenues — 3,074 — 301 — — 3,375 Gross profit — 2,202 — 164 — — 2,366 Selling, general and administrative expenses 33 604 — 66 33 — 736 Merger related costs — 14 — — — — 14 Restructuring charge — 14 — 1 — — 15 Non-rental depreciation and amortization 11 185 — 17 — — 213 Operating (loss) income (44 ) 1,385 — 80 (33 ) — 1,388 Interest (income) expense, net (26 ) 349 — — 17 (1 ) 339 Other (income) expense, net (469 ) 529 — 37 (99 ) — (2 ) Income before provision for income taxes 451 507 — 43 49 1 1,051 Provision for income taxes 105 135 — 13 12 — 265 Income before equity in net earnings (loss) of subsidiaries 346 372 — 30 37 1 786 Equity in net earnings (loss) of subsidiaries 440 68 30 — — (538 ) — Net income (loss) 786 440 30 30 37 (537 ) 786 Other comprehensive (loss) income (27 ) (27 ) (28 ) (95 ) — 150 (27 ) Comprehensive income (loss) $ 759 $ 413 $ 2 $ (65 ) $ 37 $ (387 ) $ 759 CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Revenues: Equipment rentals $ — $ 3,739 $ — $ 330 $ — $ — $ 4,069 Sales of rental equipment — 334 — 44 — — 378 Sales of new equipment — 113 — 13 — — 126 Contractor supplies sales — 53 — 7 — — 60 Service and other revenues — 75 — 11 — — 86 Total revenues — 4,314 — 405 — — 4,719 Cost of revenues: Cost of equipment rentals, excluding depreciation — 1,397 — 159 — — 1,556 Depreciation of rental equipment — 738 — 66 — — 804 Cost of rental equipment sales — 202 — 23 — — 225 Cost of new equipment sales — 97 — 11 — — 108 Cost of contractor supplies sales — 37 — 5 — — 42 Cost of service and other revenues — 37 — 5 — — 42 Total cost of revenues — 2,508 — 269 — — 2,777 Gross profit — 1,806 — 136 — — 1,942 Selling, general and administrative expenses 84 483 — 57 24 — 648 Merger related costs — 32 — — — — 32 Restructuring charge — 27 — 1 — — 28 Non-rental depreciation and amortization 11 162 — 16 — — 189 Operating (loss) income (95 ) 1,102 — 62 (24 ) — 1,045 Interest (income) expense, net (10 ) 341 2 1 8 (4 ) 338 Other (income) expense, net (387 ) 419 — 33 (70 ) — (5 ) Income (loss) before provision for income taxes 302 342 (2 ) 28 38 4 712 Provision for income taxes 102 140 — 7 14 — 263 Income (loss) before equity in net earnings (loss) of subsidiaries 200 202 (2 ) 21 24 4 449 Equity in net earnings (loss) of subsidiaries 249 47 21 — — (317 ) — Net income (loss) 449 249 19 21 24 (313 ) 449 Other comprehensive income (loss) 75 75 75 61 — (211 ) 75 Comprehensive income (loss) $ 524 $ 324 $ 94 $ 82 $ 24 $ (524 ) $ 524 CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2018 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Net cash provided by (used in) operating activities $ 22 $ 2,354 $ (1 ) $ (50 ) $ (202 ) $ — $ 2,123 Net cash used in investing activities (22 ) (2,259 ) — (112 ) — — (2,393 ) Net cash (used in) provided by financing activities — (101 ) 1 (109 ) 202 — (7 ) Effect of foreign exchange rates — — — (10 ) — — (10 ) Net decrease in cash and cash equivalents — (6 ) — (281 ) — — (287 ) Cash and cash equivalents at beginning of period — 23 — 329 — — 352 Cash and cash equivalents at end of period $ — $ 17 $ — $ 48 $ — $ — $ 65 CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2017 Parent URNA Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Foreign Domestic Net cash provided by (used in) operating activities $ 15 $ 1,839 $ (2 ) $ 83 $ (179 ) $ — $ 1,756 Net cash used in investing activities (15 ) (2,135 ) — (92 ) — — (2,242 ) Net cash provided by (used in) financing activities — 298 2 (2 ) 179 — 477 Effect of foreign exchange rates — — — 21 — — 21 Net increase in cash and cash equivalents — 2 — 10 — — 12 Cash and cash equivalents at beginning of period — 21 — 291 — — 312 Cash and cash equivalents at end of period $ — $ 23 $ — $ 301 $ — $ — $ 324 |
