Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 26, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-14387 | |
Entity Registrant Name | United Rentals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1522496 | |
Entity Address, Address Line One | 100 First Stamford Place, Suite 700 | |
Entity Address, City or Town | Stamford | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06902 | |
City Area Code | 203 | |
Local Phone Number | 622-3131 | |
Title of 12(b) Security | Common Stock, $.01 par value, of United Rentals, Inc. | |
Trading Symbol | URI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 72,378,142 | |
Entity Central Index Key | 0001067701 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 278 | $ 202 |
Accounts receivable, net of allowance for doubtful accounts of $104 at March 31, 2021 and $108 at December 31, 2020 | 1,254 | 1,315 |
Inventory | 114 | 125 |
Prepaid expenses and other assets | 358 | 375 |
Total current assets | 2,004 | 2,017 |
Goodwill | 5,167 | 5,168 |
Other intangible assets, net | 592 | 648 |
Operating lease right-of-use assets | 681 | 688 |
Other long-term assets | 38 | 38 |
Total assets | 17,542 | 17,868 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Short-term debt and current maturities of long-term debt | 585 | 704 |
Accounts payable | 562 | 466 |
Accrued expenses and other liabilities | 694 | 720 |
Total current liabilities | 1,841 | 1,890 |
Long-term debt | 8,497 | 8,978 |
Deferred taxes | 1,773 | 1,768 |
Operating lease liabilities | 541 | 549 |
Other long-term liabilities | 145 | 138 |
Total liabilities | 12,797 | 13,323 |
Common stock—$0.01 par value, 500,000,000 shares authorized, 114,388,860 and 72,375,351 shares issued and outstanding, respectively, at March 31, 2021 and 114,210,157 and 72,196,648 shares issued and outstanding, respectively, at December 31, 2020 | 1 | 1 |
Additional paid-in capital | 2,473 | 2,482 |
Retained earnings | 6,368 | 6,165 |
Treasury stock at cost—42,013,509 shares at March 31, 2021 and December 31, 2020 | (3,957) | (3,957) |
Accumulated other comprehensive loss | (140) | (146) |
Total stockholders’ equity | 4,745 | 4,545 |
Total liabilities and stockholders’ equity (deficit) | 17,542 | 17,868 |
Rental equipment, net | ||
ASSETS | ||
Equipment | 8,476 | 8,705 |
Property and equipment, net | ||
ASSETS | ||
Equipment | $ 584 | $ 604 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Allowance for doubtful accounts | $ 104 | $ 108 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 114,388,860 | 114,210,157 |
Common stock, shares outstanding (in shares) | 72,375,351 | 72,196,648 |
Treasury stock, shares (in shares) | 42,013,509 | 42,013,509 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Revenues | $ 2,057 | $ 2,125 |
Cost of revenues: | ||
Cost of equipment rentals, excluding depreciation | 715 | 747 |
Depreciation of rental equipment | 375 | 426 |
Total cost of revenues | 1,343 | 1,398 |
Gross profit | 714 | 727 |
Selling, general and administrative expenses | 250 | 267 |
Restructuring charge | 1 | 2 |
Non-rental depreciation and amortization | 91 | 100 |
Operating income (loss) | 372 | 358 |
Interest expense, net | 99 | 136 |
Other income, net | (2) | (4) |
Income before provision for income taxes | 275 | 226 |
Provision for income taxes | 72 | 53 |
Net income | $ 203 | $ 173 |
Basic earnings per share (in dollars per share) | $ 2.81 | $ 2.33 |
Diluted earnings per share (in dollars per share) | $ 2.80 | $ 2.33 |
Equipment rentals | ||
Revenues: | ||
Revenues | $ 1,667 | $ 1,783 |
Sales of rental equipment | ||
Revenues: | ||
Revenue from contract with customer | 267 | 208 |
Cost of revenues: | ||
Cost of goods and services sold | 164 | 125 |
Sales of new equipment | ||
Revenues: | ||
Revenue from contract with customer | 49 | 62 |
Cost of revenues: | ||
Cost of goods and services sold | 42 | 54 |
Contractor supplies sales | ||
Revenues: | ||
Revenue from contract with customer | 24 | 25 |
Cost of revenues: | ||
Cost of goods and services sold | 17 | 18 |
Service and other revenues | ||
Revenues: | ||
Revenue from contract with customer | 50 | 47 |
Cost of revenues: | ||
Cost of goods and services sold | $ 30 | $ 28 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 203 | $ 173 | |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | [1],[2] | 5 | (103) |
Fixed price diesel swaps | 1 | (3) | |
Other comprehensive income (loss) | 6 | (106) | |
Comprehensive income (loss) | [1] | $ 209 | $ 67 |
[1] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income (loss) during 2021 or 2020. T here was no material tax impact related to the foreign currency translation adjustments. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of 2020. In the fourth quarter of 2020, we identified $135 of cash in our foreign operations in excess of near-term working capital needs, and determined that this amount could no longer be considered indefinitely reinvested. As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed. We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. There were no material taxes associated with other comprehensive income (loss) during 2021 or 2020. | ||
[2] | The 2020 activity primarily reflects a significant change in Canadian currency exchange rates. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Reclassification from AOCI, current period, net of tax, attributable to parent | $ 0 | $ 0 | |
Other comprehensive income (loss), foreign currency translation adjustment, tax, portion attributable to parent | 0 | 0 | |
Foreign earnings repatriated | $ 135 | ||
Other comprehensive income (loss), tax, portion attributable to parent | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | [2] | |||
Balance (in shares) at Dec. 31, 2019 | 74 | [1] | 39 | |||||||
Balance at Dec. 31, 2019 | $ 1 | $ 2,440 | $ 5,275 | $ (3,700) | $ (186) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | $ 173 | 173 | ||||||||
Foreign currency translation adjustments | (103) | [3],[4] | (103) | [5] | ||||||
Fixed price diesel swaps | (3) | (3) | ||||||||
Stock compensation expense, net (in shares) | [1] | 1 | ||||||||
Stock compensation expense, net | 13 | |||||||||
Exercise of common stock options | 1 | |||||||||
Shares repurchased and retired | (19) | |||||||||
Repurchase of common stock (in shares) | (3) | [1] | (3) | |||||||
Repurchase of common stock | $ (257) | |||||||||
Balance (in shares) at Mar. 31, 2020 | 72 | [1] | 42 | |||||||
Balance at Mar. 31, 2020 | $ 1 | 2,435 | 5,448 | $ (3,957) | (292) | |||||
Balance (in shares) at Dec. 31, 2020 | 72 | [1] | 42 | |||||||
Balance at Dec. 31, 2020 | 4,545 | $ 1 | 2,482 | 6,165 | $ (3,957) | (146) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 203 | 203 | ||||||||
Foreign currency translation adjustments | 5 | [3],[4] | 5 | |||||||
Fixed price diesel swaps | 1 | 1 | ||||||||
Stock compensation expense, net (in shares) | [1] | 0 | ||||||||
Stock compensation expense, net | 21 | |||||||||
Shares repurchased and retired | (30) | |||||||||
Balance (in shares) at Mar. 31, 2021 | 72 | [1] | 42 | |||||||
Balance at Mar. 31, 2021 | $ 4,745 | $ 1 | $ 2,473 | $ 6,368 | $ (3,957) | $ (140) | ||||
[1] | Common stock outstanding decreased by approximately 2 million net shares during the year ended December 31, 2020. | |||||||||
[2] | The Accumulated Other Comprehensive Loss balance primarily reflects foreign currency translation adjustments. | |||||||||
[3] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income (loss) during 2021 or 2020. T here was no material tax impact related to the foreign currency translation adjustments. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of 2020. In the fourth quarter of 2020, we identified $135 of cash in our foreign operations in excess of near-term working capital needs, and determined that this amount could no longer be considered indefinitely reinvested. As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed. We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. There were no material taxes associated with other comprehensive income (loss) during 2021 or 2020. | |||||||||
[4] | The 2020 activity primarily reflects a significant change in Canadian currency exchange rates. | |||||||||
[5] | Primarily reflects a significant change in Canadian currency exchange rates. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) shares in Millions | 12 Months Ended |
Dec. 31, 2020shares | |
Common Stock | |
Change in common stock outstanding (in shares, approximately) | (2) |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net income | $ 203 | $ 173 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 466 | 526 |
Amortization of deferred financing costs and original issue discounts | 3 | 4 |
Gain on sales of rental equipment | (103) | (83) |
Gain on sales of non-rental equipment | (1) | (1) |
Insurance proceeds from damaged equipment | (7) | (6) |
Stock compensation expense, net | 21 | 13 |
Restructuring charge | 1 | 2 |
Increase in deferred taxes | 3 | 1 |
Changes in operating assets and liabilities, net of amounts acquired: | ||
Decrease in accounts receivable | 63 | 105 |
Decrease in inventory | 11 | 5 |
Decrease (increase) in prepaid expenses and other assets | 23 | (30) |
Increase in accounts payable | 96 | 33 |
Decrease in accrued expenses and other liabilities | (21) | (98) |
Net cash provided by operating activities | 758 | 644 |
Cash Flows From Investing Activities: | ||
Purchases of rental equipment | (295) | (208) |
Purchases of non-rental equipment | (19) | (53) |
Proceeds from sales of rental equipment | 267 | 208 |
Proceeds from sales of non-rental equipment | 7 | 9 |
Insurance proceeds from damaged equipment | 7 | 6 |
Purchases of other companies, net of cash acquired | (1) | 0 |
Purchases of investments | 0 | (1) |
Net cash used in investing activities | (34) | (39) |
Cash Flows From Financing Activities: | ||
Proceeds from debt | 1,091 | 2,517 |
Payments of debt | (1,710) | (2,375) |
Proceeds from the exercise of common stock options | 0 | 1 |
Common stock repurchased | (30) | (276) |
Payments of financing costs | 0 | (9) |
Net cash used in financing activities | (649) | (142) |
Effect of foreign exchange rates | 1 | (2) |
Net increase in cash and cash equivalents | 76 | 461 |
Cash and cash equivalents at beginning of period | 202 | 52 |
Cash and cash equivalents at end of period | 278 | 513 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net | 6 | 3 |
Cash paid for interest | $ 167 | $ 174 |
Organization, Description of Bu
Organization, Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
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, Canada and Europe. In July 2018, we completed the acquisition of BakerCorp International Holdings, Inc. (“BakerCorp”), which allowed for our entry into select European markets. 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, 2020 (the “2020 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 2020 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. COVID-19 The novel coronavirus (“COVID-19”) was first identified in people in late 2019. COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization characterized COVID-19 as a pandemic. COVID-19 is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk. It has significantly disrupted supply chains and businesses around the world. The extent and duration of the COVID-19 impact, on the operations and financial position of United Rentals, and on the global economy, is uncertain. Uncertainty remains regarding the length of time it will take for the COVID-19 pandemic to subside, including the time it will take for vaccines to be broadly distributed and accepted in the United States and the rest of the world, and the effectiveness of such vaccines in slowing or stopping the spread of COVID-19 and mitigating the economic effects of the pandemic. The health and safety of our employees and customers remains our top priority, and we have also engaged in extensive contingency planning to manage the business impact of the pandemic. Prior to mid-March 2020, our results were largely in line with expectations. We began to experience a decline in revenues in March 2020, when rental volume declined in response to shelter-in-place orders and other market restrictions. COVID-19 is discussed in more detail throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” New Accounting Pronouncements Guidance Adopted in 2021 Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes. The guidance removes the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue Recognition Accounting Standards We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard. Three Months Ended March 31, 2021 2020 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 1,405 $ — $ 1,405 $ 1,522 $ — $ 1,522 Re-rent revenue 32 — 32 34 — 34 Ancillary and other rental revenues: Delivery and pick-up — 116 116 — 119 119 Other 81 33 114 81 27 108 Total ancillary and other rental revenues 81 149 230 81 146 227 Total equipment rentals 1,518 149 1,667 1,637 146 1,783 Sales of rental equipment — 267 267 — 208 208 Sales of new equipment — 49 49 — 62 62 Contractor supplies sales — 24 24 — 25 25 Service and other revenues — 50 50 — 47 47 Total revenues $ 1,518 $ 539 $ 2,057 $ 1,637 $ 488 $ 2,125 Revenues by reportable segment are presented in note 3 of the condensed consolidated financial statements, using the revenue captions reflected in our condensed consolidated statements of operations. The majority of our revenue is recognized in our general rentals segment and in the U.S. (for the three months ended March 31, 2021, 79 percent and 91 percent, respectively). We believe that the disaggregation of our revenue from contracts to customers as reflected above, coupled with the further discussion below and the reportable segment disclosures in note 3, depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 68 percent of total revenues for the three months ended March 31, 2021) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $51 as of March 31, 2021 and December 31, 2020. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment. Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 74 percent of our total revenues for the three months ended March 31, 2021). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address receivables arising from revenues from both Topic 606 and Topic 842. Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues for the three months ended March 31, 2021, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent and two percent of total receivables at March 31, 2021 and December 31, 2020, respectively. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowances for doubtful accounts reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for doubtful accounts. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Our allowance for doubtful accounts as of March 31, 2021 included an adjustment for the estimated impact of COVID-19 on future collectibility that was not material to our financial statements. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 74 percent of our total revenues for the three months ended March 31, 2021, and these revenues account for corresponding portions of the $1.254 billion of net accounts receivable and the associated allowance for doubtful accounts of $104 reported on our condensed consolidated balance sheet as of March 31, 2021). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Beginning balance $ 108 $ 103 Charged to costs and expenses (1) — 4 Charged to revenue (2) 4 8 Deductions (3) (8) (8) Ending balance $ 104 $ 107 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Represents write-offs of accounts, net of immaterial recoveries. We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the three months ended March 31, 2021 or 2020 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2021 and 2020 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2021. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: • The transaction price is generally fixed and stated in our contracts; • As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation; • Our revenues do not include material amounts of variable consideration, or result in significant obligations associated with returns, refunds or warranties; and • Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationOur reportable segments are i) general rentals and ii) trench, power and fluid solutions. Our regions discussed below, which are our operating segments, are aggregated into our reportable segments. We believe that the regions that are aggregated into our reportable segments have similar economic characteristics, as each region is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our regions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of 11 geographic regions—Carolinas, Gulf South, Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Mid Central, Midwest, Northeast, Pacific West, South, Southeast and Western Canada—and operates throughout the United States and Canada. The trench, power and fluid solutions 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) fluid solutions equipment primarily used for fluid containment, transfer and treatment. The trench, power and fluid solutions 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, iii) the Fluid Solutions region and iv) the Fluid Solutions Europe region. The trench, power and fluid solutions segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment operates throughout the United States and in Canada and Europe. The following tables set forth financial information by segment. General Trench, power and fluid solutions Total Three Months Ended March 31, 2021 Equipment rentals $ 1,273 $ 394 $ 1,667 Sales of rental equipment 247 20 267 Sales of new equipment 42 7 49 Contractor supplies sales 16 8 24 Service and other revenues 44 6 50 Total revenue 1,622 435 2,057 Depreciation and amortization expense 380 86 466 Equipment rentals gross profit 411 166 577 Capital expenditures 284 30 314 Three Months Ended March 31, 2020 Equipment rentals $ 1,394 $ 389 $ 1,783 Sales of rental equipment 190 18 208 Sales of new equipment 53 9 62 Contractor supplies sales 16 9 25 Service and other revenues 41 6 47 Total revenue 1,694 431 2,125 Depreciation and amortization expense 437 89 526 Equipment rentals gross profit 448 162 610 Capital expenditures 198 63 261 March 31, December 31, Total reportable segment assets General rentals $ 14,814 $ 15,051 Trench, power and fluid solutions 2,728 2,817 Total assets $ 17,542 $ 17,868 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, 2021 2020 Total equipment rentals gross profit $ 577 $ 610 Gross profit from other lines of business 137 117 Selling, general and administrative expenses (250) (267) Restructuring charge (1) (1) (2) Non-rental depreciation and amortization (91) (100) Interest expense, net (99) (136) Other income, net 2 4 Income before provision for income taxes $ 275 $ 226 ___________________ (1) Primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges Restructuring charges primarily include severance costs associated with headcount reductions, as well as branch closure charges. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such program was initiated in 2008, we have completed five restructuring programs and have incurred total restructuring charges of $351. Closed Restructuring Programs Our closed restructuring programs were initiated either in recognition of a challenging economic environment or following the completion of certain significant acquisitions. As of March 31, 2021, the total liability associated with the closed restructuring programs was $12. 2020-2021 Cost Savings Restructuring Program In the fourth quarter of 2019, we initiated a restructuring program associated with the consolidation of certain common functions, the relocation of our shared-service facilities and certain other cost reduction measures. We expect to complete the restructuring program in the first half of 2021, and do not expect to incur significant additional expenses in connection with the program. The table below provides certain information concerning restructuring activity under the 2020-2021 Cost Savings restructuring program during the three months ended March 31, 2021: Description Beginning Charged to Payments Ending Branch closure charges $ 3 $ — $ (1) $ 2 Severance and other 2 — (1) 1 Total $ 5 $ — $ (2) $ 3 ________________ (1) Reflected in our condensed consolidated statements of income as “Restructuring charge” (such charge also includes activity under our other restructuring programs). The restructuring charges are not allocated to our segments. As of March 31, 2021, we have incurred total restructuring charges under the 2020-2021 Cost Savings restructuring program of $16, comprised of $8 of branch closure charges and $8 of severance and other costs. Asset Impairment Charges In addition to the restructuring charges discussed above, during the three months ended March 31, 2020, we recorded asset impairment charges of $26, primarily in our general rentals segment. These asset impairment charges, which were not related to COVID-19, are primarily reflected in depreciation of rental equipment in our condensed consolidated statements of income and principally related to the discontinuation of certain equipment programs. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: March 31, 2021 December 31, 2020 Equipment (1) 289 300 Insurance 12 18 Advertising reimbursements (2) 9 11 Income taxes 4 4 Other (3) 44 42 Prepaid expenses and other assets $ 358 $ 375 _________________ (1) Reflects refundable deposits on expected purchases, primarily of rental equipment, pursuant to advanced purchase agreements. Such deposits are presented as a component of our cash flow from operations when paid. We expect to purchase and receive the equipment in 2021. During the three months ended March 31, 2021, we placed deposits of $50 and purchased $61 of equipment that we had placed deposits on. (2) Reflects reimbursements due for advertising that promotes a vendor’s products or services. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of March 31, 2021 and December 31, 2020, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include: a) quoted prices for similar assets or liabilities in active markets; b) quoted prices for identical or similar assets or liabilities in inactive markets; c) inputs other than quoted prices that are observable for the asset or liability; d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our condensed consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The fair values of our ABL, accounts receivable securitization and term loan facilities and finance leases approximated their book values as of March 31, 2021 and December 31, 2020. The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2021 and December 31, 2020 have been calculated based upon available market information, and were as follows: March 31, 2021 December 31, 2020 Carrying Fair Carrying Fair Senior notes $ 6,967 $ 7,344 $ 6,965 $ 7,470 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | DebtDebt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following: March 31, 2021 December 31, 2020 Accounts Receivable Securitization Facility expiring 2021 (1) (2) $ 524 $ 634 $3.75 billion ABL Facility expiring 2024 (1) (3) 491 977 Term loan facility expiring 2025 (1) 969 971 5 7 / 8 percent Senior Notes due 2026 999 999 5 1 / 2 percent Senior Notes due 2027 994 994 3 7 / 8 percent Senior Secured Notes due 2027 742 742 4 7 / 8 percent Senior Notes due 2028 (4) 1,655 1,654 4 7 / 8 percent Senior Notes due 2028 (4) 4 4 5 1 / 4 percent Senior Notes due 2030 743 742 4 percent Senior Notes due 2030 742 742 3 7 / 8 percent Senior Notes due 2031 1,088 1,088 Finance leases 131 135 Total debt 9,082 9,682 Less short-term portion (5) (585) (704) Total long-term debt $ 8,497 $ 8,978 ___________________ (1) The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2021. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation. ABL facility Accounts receivable securitization facility Term loan facility Borrowing capacity, net of letters of credit $ 3,191 $ 276 $ — Letters of credit 60 Interest rate at March 31, 2021 1.3 % 1.4 % 1.9 % Average month-end debt outstanding 624 603 977 Weighted-average interest rate on average debt outstanding 1.3 % 1.4 % 1.9 % Maximum month-end debt outstanding 774 644 978 (2) Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of March 31, 2021, there were $787 of receivables, net of applicable reserves and other deductions, in the collateral pool. (3) The decrease in the outstanding debt under the ABL facility since December 31, 2020 primarily reflects the use of proceeds from operations to reduce borrowings under the facility. (4) URNA separately issued 4 7 / 8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, URNA consummated an exchange offer pursuant to which most of the 4 7 / 8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7 / 8 percent Senior Notes issued in August 2017. (5) As of March 31, 2021, our short-term debt primarily reflects $524 of borrowings under our accounts receivable securitization facility. Loan Covenants and Compliance As of March 31, 2021, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization and term loan facilities and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases As discussed in note 2 to the condensed consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such lease revenue represented 74 percent of our total revenues for the three months ended March 31, 2021). See note 2 to the condensed consolidated financial statements for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842). We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases. Operating leases result in the recognition of right-of-use ("ROU") assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options, at our sole discretion, to extend or terminate the lease that we are reasonably certain to exercise. The amount of payments associated with such options reflected in the “Maturity of lease liabilities” table below is not material. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term. The primary leases we enter into with initial terms of 12 months or less are for equipment that we rent from vendors and then rent to our customers. We generate sublease revenue from such leases that we refer to as "re-rent revenue" as discussed in note 2 to the condensed consolidated financial statements. Apart from this re-rent revenue, we do not generate material sublease income. We have lease agreements with lease and non-lease components, and, for our real estate operating leases, we use the practical expedient that allows us to account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The tables below present financial information associated with our leases as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and 2020. Classification March 31, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 681 $ 688 Finance lease assets Rental equipment 296 295 Less accumulated depreciation (86) (86) Rental equipment, net 210 209 Property and equipment, net: Non-rental vehicles 8 8 Buildings 20 19 Less accumulated depreciation and amortization (13) (11) Property and equipment, net 15 16 Total leased assets 906 913 Liabilities Current Operating Accrued expenses and other liabilities 178 178 Finance Short-term debt and current maturities of long-term debt 51 60 Long-term Operating Operating lease liabilities 541 549 Finance Long-term debt 80 75 Total lease liabilities $ 850 $ 862 Lease cost Classification Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Operating lease cost (1) Cost of equipment rentals, excluding depreciation (1) $ 90 $ 92 Selling, general and administrative expenses 2 3 Restructuring charge 1 1 Finance lease cost Amortization of leased assets Depreciation of rental equipment 7 7 Non-rental depreciation and amortization — — Interest on lease liabilities Interest expense, net 1 3 Sublease income (2) (32) (34) Net lease cost $ 69 $ 72 _________________ (1) Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation includes $28 and $31 for the three months ended March 31, 2021 and 2020, respectively, of short-term lease costs associated with equipment that we rent from vendors and then rent to our customers, as discussed further above. Apart from these costs, short-term lease costs are immaterial. (2) Primarily reflects re-rent revenue as discussed further above. Maturity of lease liabilities (as of March 31, 2021) Operating leases (1) Finance leases (2) 2021 $ 155 $ 46 2022 181 44 2023 150 32 2024 117 11 2025 81 2 Thereafter 111 5 Total 795 140 Less amount representing interest (76) (9) Present value of lease liabilities $ 719 $ 131 _________________ (1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of March 31, 2021. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. (2) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. Lease term and discount rate March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 4.9 5.0 Finance leases 3.0 3.0 Weighted-average discount rate Operating leases 4.1 % 4.2 % Finance leases 3.0 % 3.4 % Other information Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 52 $ 52 Operating cash flows from finance leases 1 3 Financing cash flows from finance leases 21 12 Leased assets obtained in exchange for new operating lease liabilities 41 48 Leased assets obtained in exchange for new finance lease liabilities $ 16 $ 34 |
Leases | Leases As discussed in note 2 to the condensed consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such lease revenue represented 74 percent of our total revenues for the three months ended March 31, 2021). See note 2 to the condensed consolidated financial statements for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842). We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases. Operating leases result in the recognition of right-of-use ("ROU") assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options, at our sole discretion, to extend or terminate the lease that we are reasonably certain to exercise. The amount of payments associated with such options reflected in the “Maturity of lease liabilities” table below is not material. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term. The primary leases we enter into with initial terms of 12 months or less are for equipment that we rent from vendors and then rent to our customers. We generate sublease revenue from such leases that we refer to as "re-rent revenue" as discussed in note 2 to the condensed consolidated financial statements. Apart from this re-rent revenue, we do not generate material sublease income. We have lease agreements with lease and non-lease components, and, for our real estate operating leases, we use the practical expedient that allows us to account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The tables below present financial information associated with our leases as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and 2020. Classification March 31, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 681 $ 688 Finance lease assets Rental equipment 296 295 Less accumulated depreciation (86) (86) Rental equipment, net 210 209 Property and equipment, net: Non-rental vehicles 8 8 Buildings 20 19 Less accumulated depreciation and amortization (13) (11) Property and equipment, net 15 16 Total leased assets 906 913 Liabilities Current Operating Accrued expenses and other liabilities 178 178 Finance Short-term debt and current maturities of long-term debt 51 60 Long-term Operating Operating lease liabilities 541 549 Finance Long-term debt 80 75 Total lease liabilities $ 850 $ 862 Lease cost Classification Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Operating lease cost (1) Cost of equipment rentals, excluding depreciation (1) $ 90 $ 92 Selling, general and administrative expenses 2 3 Restructuring charge 1 1 Finance lease cost Amortization of leased assets Depreciation of rental equipment 7 7 Non-rental depreciation and amortization — — Interest on lease liabilities Interest expense, net 1 3 Sublease income (2) (32) (34) Net lease cost $ 69 $ 72 _________________ (1) Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation includes $28 and $31 for the three months ended March 31, 2021 and 2020, respectively, of short-term lease costs associated with equipment that we rent from vendors and then rent to our customers, as discussed further above. Apart from these costs, short-term lease costs are immaterial. (2) Primarily reflects re-rent revenue as discussed further above. Maturity of lease liabilities (as of March 31, 2021) Operating leases (1) Finance leases (2) 2021 $ 155 $ 46 2022 181 44 2023 150 32 2024 117 11 2025 81 2 Thereafter 111 5 Total 795 140 Less amount representing interest (76) (9) Present value of lease liabilities $ 719 $ 131 _________________ (1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of March 31, 2021. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. (2) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. Lease term and discount rate March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 4.9 5.0 Finance leases 3.0 3.0 Weighted-average discount rate Operating leases 4.1 % 4.2 % Finance leases 3.0 % 3.4 % Other information Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 52 $ 52 Operating cash flows from finance leases 1 3 Financing cash flows from finance leases 21 12 Leased assets obtained in exchange for new operating lease liabilities 41 48 Leased assets obtained in exchange for new finance lease liabilities $ 16 $ 34 |
Legal and Regulatory Matters
Legal and Regulatory Matters | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | Legal and Regulatory MattersWe 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, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic 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, 2021 2020 Numerator: Net income available to common stockholders 203 173 Denominator: Denominator for basic earnings per share—weighted-average common shares 72,338 74,041 Effect of dilutive securities: Employee stock options 6 15 Restricted stock units 330 210 Denominator for diluted earnings per share—adjusted weighted-average common shares 72,674 74,266 Basic earnings per share $ 2.81 $ 2.33 Diluted earnings per share $ 2.80 $ 2.33 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On April 15, 2021, we entered into an Agreement and Plan of Merger (the “GFN Merger Agreement”) that provides for our acquisition of General Finance Corporation (“General Finance”) in a two-step all cash transaction, consisting of a tender offer, followed by a subsequent back-end merger. Pursuant to the GFN Merger Agreement, we will acquire General Finance for $19 (actual dollars) per share in cash, representing a total enterprise value of approximately $996, including the assumption of $400 of net debt. The acquisition and related fees and expenses will be funded through available cash and drawings on our ABL facility. General Finance, which operates as Pac-Van and Container King in the U.S. and Canada, and as Royal Wolf in Australia and New Zealand, is a leading provider of mobile storage and modular office space. Its network serves diverse end-markets, including construction, commercial, industrial, retail, transportation, petrochemical, consumer, natural resources, governmental and education. As of March 31, 2021, General Finance’s rental fleet consisted of approximately 100,000 units at an original cost of approximately $639. For the 12 months ending December 31, 2020, General Finance had revenues of $346. The transaction is subject to customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other regulatory approvals. The transaction is expected to close in the second quarter of 2021. |
Organization, Description of _2
Organization, Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | Guidance Adopted in 2021 Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued guidance intended to simplify the accounting for income taxes. The guidance removes the following exceptions: 1) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, 2) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, 3) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and 4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: 1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, 2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, 3) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity |
Lease revenues (Topic 842) | Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 68 percent of total revenues for the three months ended March 31, 2021) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $51 as of March 31, 2021 and December 31, 2020. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment. |
Revenues from contracts with customers (Topic 606) | Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 74 percent of our total revenues for the three months ended March 31, 2021). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address receivables arising from revenues from both Topic 606 and Topic 842. Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues for the three months ended March 31, 2021, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent and two percent of total receivables at March 31, 2021 and December 31, 2020, respectively. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowances for doubtful accounts reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for doubtful accounts. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Our allowance for doubtful accounts as of March 31, 2021 included an adjustment for the estimated impact of COVID-19 on future collectibility that was not material to our financial statements. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 74 percent of our total revenues for the three months ended March 31, 2021, and these revenues account for corresponding portions of the $1.254 billion of net accounts receivable and the associated allowance for doubtful accounts of $104 reported on our condensed consolidated balance sheet as of March 31, 2021). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Beginning balance $ 108 $ 103 Charged to costs and expenses (1) — 4 Charged to revenue (2) 4 8 Deductions (3) (8) (8) Ending balance $ 104 $ 107 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Represents write-offs of accounts, net of immaterial recoveries. We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the three months ended March 31, 2021 or 2020 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2021 and 2020 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2021. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: • The transaction price is generally fixed and stated in our contracts; • As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation; • Our revenues do not include material amounts of variable consideration, or result in significant obligations associated with returns, refunds or warranties; and • Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis. |
Leases | As discussed in note 2 to the condensed consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such lease revenue represented 74 percent of our total revenues for the three months ended March 31, 2021). See note 2 to the condensed consolidated financial statements for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842). We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases. Operating leases result in the recognition of right-of-use ("ROU") assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options, at our sole discretion, to extend or terminate the lease that we are reasonably certain to exercise. The amount of payments associated with such options reflected in the “Maturity of lease liabilities” table below is not material. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term. The primary leases we enter into with initial terms of 12 months or less are for equipment that we rent from vendors and then rent to our customers. We generate sublease revenue from such leases that we refer to as "re-rent revenue" as discussed in note 2 to the condensed consolidated financial statements. Apart from this re-rent revenue, we do not generate material sublease income. We have lease agreements with lease and non-lease components, and, for our real estate operating leases, we use the practical expedient that allows us to account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of changes in accounting principles | In the following table, revenue is summarized by type and by the applicable accounting standard. Three Months Ended March 31, 2021 2020 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 1,405 $ — $ 1,405 $ 1,522 $ — $ 1,522 Re-rent revenue 32 — 32 34 — 34 Ancillary and other rental revenues: Delivery and pick-up — 116 116 — 119 119 Other 81 33 114 81 27 108 Total ancillary and other rental revenues 81 149 230 81 146 227 Total equipment rentals 1,518 149 1,667 1,637 146 1,783 Sales of rental equipment — 267 267 — 208 208 Sales of new equipment — 49 49 — 62 62 Contractor supplies sales — 24 24 — 25 25 Service and other revenues — 50 50 — 47 47 Total revenues $ 1,518 $ 539 $ 2,057 $ 1,637 $ 488 $ 2,125 |
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure | The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Beginning balance $ 108 $ 103 Charged to costs and expenses (1) — 4 Charged to revenue (2) 4 8 Deductions (3) (8) (8) Ending balance $ 104 $ 107 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Represents write-offs of accounts, net of immaterial recoveries. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Financial information by segment | The following tables set forth financial information by segment. General Trench, power and fluid solutions Total Three Months Ended March 31, 2021 Equipment rentals $ 1,273 $ 394 $ 1,667 Sales of rental equipment 247 20 267 Sales of new equipment 42 7 49 Contractor supplies sales 16 8 24 Service and other revenues 44 6 50 Total revenue 1,622 435 2,057 Depreciation and amortization expense 380 86 466 Equipment rentals gross profit 411 166 577 Capital expenditures 284 30 314 Three Months Ended March 31, 2020 Equipment rentals $ 1,394 $ 389 $ 1,783 Sales of rental equipment 190 18 208 Sales of new equipment 53 9 62 Contractor supplies sales 16 9 25 Service and other revenues 41 6 47 Total revenue 1,694 431 2,125 Depreciation and amortization expense 437 89 526 Equipment rentals gross profit 448 162 610 Capital expenditures 198 63 261 March 31, December 31, Total reportable segment assets General rentals $ 14,814 $ 15,051 Trench, power and fluid solutions 2,728 2,817 Total assets $ 17,542 $ 17,868 |
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, 2021 2020 Total equipment rentals gross profit $ 577 $ 610 Gross profit from other lines of business 137 117 Selling, general and administrative expenses (250) (267) Restructuring charge (1) (1) (2) Non-rental depreciation and amortization (91) (100) Interest expense, net (99) (136) Other income, net 2 4 Income before provision for income taxes $ 275 $ 226 ___________________ (1) Primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements. |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | The table below provides certain information concerning restructuring activity under the 2020-2021 Cost Savings restructuring program during the three months ended March 31, 2021: Description Beginning Charged to Payments Ending Branch closure charges $ 3 $ — $ (1) $ 2 Severance and other 2 — (1) 1 Total $ 5 $ — $ (2) $ 3 ________________ (1) Reflected in our condensed consolidated statements of income as “Restructuring charge” (such charge also includes activity under our other restructuring programs). The restructuring charges are not allocated to our segments. As of March 31, 2021, we have incurred total restructuring charges under the 2020-2021 Cost Savings restructuring program of $16, comprised of $8 of branch closure charges and $8 of severance and other costs. |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other assets | Prepaid expenses and other assets consist of the following: March 31, 2021 December 31, 2020 Equipment (1) 289 300 Insurance 12 18 Advertising reimbursements (2) 9 11 Income taxes 4 4 Other (3) 44 42 Prepaid expenses and other assets $ 358 $ 375 _________________ (1) Reflects refundable deposits on expected purchases, primarily of rental equipment, pursuant to advanced purchase agreements. Such deposits are presented as a component of our cash flow from operations when paid. We expect to purchase and receive the equipment in 2021. During the three months ended March 31, 2021, we placed deposits of $50 and purchased $61 of equipment that we had placed deposits on. (2) Reflects reimbursements due for advertising that promotes a vendor’s products or services. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2021 and December 31, 2020 have been calculated based upon available market information, and were as follows: March 31, 2021 December 31, 2020 Carrying Fair Carrying Fair Senior notes $ 6,967 $ 7,344 $ 6,965 $ 7,470 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 December 31, 2020 Accounts Receivable Securitization Facility expiring 2021 (1) (2) $ 524 $ 634 $3.75 billion ABL Facility expiring 2024 (1) (3) 491 977 Term loan facility expiring 2025 (1) 969 971 5 7 / 8 percent Senior Notes due 2026 999 999 5 1 / 2 percent Senior Notes due 2027 994 994 3 7 / 8 percent Senior Secured Notes due 2027 742 742 4 7 / 8 percent Senior Notes due 2028 (4) 1,655 1,654 4 7 / 8 percent Senior Notes due 2028 (4) 4 4 5 1 / 4 percent Senior Notes due 2030 743 742 4 percent Senior Notes due 2030 742 742 3 7 / 8 percent Senior Notes due 2031 1,088 1,088 Finance leases 131 135 Total debt 9,082 9,682 Less short-term portion (5) (585) (704) Total long-term debt $ 8,497 $ 8,978 ___________________ (1) The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2021. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation. ABL facility Accounts receivable securitization facility Term loan facility Borrowing capacity, net of letters of credit $ 3,191 $ 276 $ — Letters of credit 60 Interest rate at March 31, 2021 1.3 % 1.4 % 1.9 % Average month-end debt outstanding 624 603 977 Weighted-average interest rate on average debt outstanding 1.3 % 1.4 % 1.9 % Maximum month-end debt outstanding 774 644 978 (2) Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of March 31, 2021, there were $787 of receivables, net of applicable reserves and other deductions, in the collateral pool. (3) The decrease in the outstanding debt under the ABL facility since December 31, 2020 primarily reflects the use of proceeds from operations to reduce borrowings under the facility. (4) URNA separately issued 4 7 / 8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, URNA consummated an exchange offer pursuant to which most of the 4 7 / 8 percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4 7 / 8 percent Senior Notes issued in August 2017. (5) As of March 31, 2021, our short-term debt primarily reflects $524 of borrowings under our accounts receivable securitization facility. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Assets and liabilities of leases | The tables below present financial information associated with our leases as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and 2020. Classification March 31, 2021 December 31, 2020 Assets Operating lease assets Operating lease right-of-use assets $ 681 $ 688 Finance lease assets Rental equipment 296 295 Less accumulated depreciation (86) (86) Rental equipment, net 210 209 Property and equipment, net: Non-rental vehicles 8 8 Buildings 20 19 Less accumulated depreciation and amortization (13) (11) Property and equipment, net 15 16 Total leased assets 906 913 Liabilities Current Operating Accrued expenses and other liabilities 178 178 Finance Short-term debt and current maturities of long-term debt 51 60 Long-term Operating Operating lease liabilities 541 549 Finance Long-term debt 80 75 Total lease liabilities $ 850 $ 862 |
Lease, cost | Lease cost Classification Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Operating lease cost (1) Cost of equipment rentals, excluding depreciation (1) $ 90 $ 92 Selling, general and administrative expenses 2 3 Restructuring charge 1 1 Finance lease cost Amortization of leased assets Depreciation of rental equipment 7 7 Non-rental depreciation and amortization — — Interest on lease liabilities Interest expense, net 1 3 Sublease income (2) (32) (34) Net lease cost $ 69 $ 72 _________________ (1) Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation includes $28 and $31 for the three months ended March 31, 2021 and 2020, respectively, of short-term lease costs associated with equipment that we rent from vendors and then rent to our customers, as discussed further above. Apart from these costs, short-term lease costs are immaterial. (2) Primarily reflects re-rent revenue as discussed further above. Lease term and discount rate March 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 4.9 5.0 Finance leases 3.0 3.0 Weighted-average discount rate Operating leases 4.1 % 4.2 % Finance leases 3.0 % 3.4 % Other information Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 52 $ 52 Operating cash flows from finance leases 1 3 Financing cash flows from finance leases 21 12 Leased assets obtained in exchange for new operating lease liabilities 41 48 Leased assets obtained in exchange for new finance lease liabilities $ 16 $ 34 |
Lessee, operating lease, liability, maturity | Maturity of lease liabilities (as of March 31, 2021) Operating leases (1) Finance leases (2) 2021 $ 155 $ 46 2022 181 44 2023 150 32 2024 117 11 2025 81 2 Thereafter 111 5 Total 795 140 Less amount representing interest (76) (9) Present value of lease liabilities $ 719 $ 131 _________________ (1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of March 31, 2021. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. (2) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. |
Finance lease, liability, maturity | Maturity of lease liabilities (as of March 31, 2021) Operating leases (1) Finance leases (2) 2021 $ 155 $ 46 2022 181 44 2023 150 32 2024 117 11 2025 81 2 Thereafter 111 5 Total 795 140 Less amount representing interest (76) (9) Present value of lease liabilities $ 719 $ 131 _________________ (1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of March 31, 2021. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. (2) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 2020 Numerator: Net income available to common stockholders 203 173 Denominator: Denominator for basic earnings per share—weighted-average common shares 72,338 74,041 Effect of dilutive securities: Employee stock options 6 15 Restricted stock units 330 210 Denominator for diluted earnings per share—adjusted weighted-average common shares 72,674 74,266 Basic earnings per share $ 2.81 $ 2.33 Diluted earnings per share $ 2.80 $ 2.33 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Re-rent revenue, Topic 842 | $ 32 | $ 34 |
Revenues | 2,057 | 2,125 |
Topic 842 | ||
Revenues: | ||
Revenues | 1,518 | 1,637 |
Topic 606 | ||
Revenues: | ||
Revenues | 539 | 488 |
Equipment rentals | ||
Revenues: | ||
Revenues | 1,667 | 1,783 |
Equipment rentals | Topic 842 | ||
Revenues: | ||
Revenues | 1,518 | 1,637 |
Equipment rentals | Topic 606 | ||
Revenues: | ||
Revenues | 149 | 146 |
Owned equipment rentals | ||
Revenues: | ||
Owned equipment rentals, Topic 842 | 1,405 | 1,522 |
Owned equipment rentals | Topic 842 | ||
Revenues: | ||
Owned equipment rentals, Topic 842 | 1,405 | 1,522 |
Re-rent revenue | ||
Revenues: | ||
Re-rent revenue, Topic 842 | 32 | 34 |
Re-rent revenue | Topic 842 | ||
Revenues: | ||
Re-rent revenue, Topic 842 | 32 | 34 |
Ancillary and Other Rental Revenues | ||
Revenues: | ||
Revenue from contract with customer | 116 | 119 |
Other | 114 | 108 |
Revenues | 230 | 227 |
Ancillary and Other Rental Revenues | Topic 842 | ||
Revenues: | ||
Revenue from contract with customer | 0 | 0 |
Other | 81 | 81 |
Revenues | 81 | 81 |
Ancillary and Other Rental Revenues | Topic 606 | ||
Revenues: | ||
Revenue from contract with customer | 116 | 119 |
Other | 33 | 27 |
Revenues | 149 | 146 |
Sales of rental equipment | ||
Revenues: | ||
Revenue from contract with customer | 267 | 208 |
Sales of rental equipment | Topic 606 | ||
Revenues: | ||
Revenue from contract with customer | 267 | 208 |
Sales of new equipment | ||
Revenues: | ||
Revenue from contract with customer | 49 | 62 |
Sales of new equipment | Topic 606 | ||
Revenues: | ||
Revenue from contract with customer | 49 | 62 |
Contractor supplies sales | ||
Revenues: | ||
Revenue from contract with customer | 24 | 25 |
Contractor supplies sales | Topic 606 | ||
Revenues: | ||
Revenue from contract with customer | 24 | 25 |
Service and other revenues | ||
Revenues: | ||
Revenue from contract with customer | 50 | 47 |
Service and other revenues | Topic 606 | ||
Revenues: | ||
Revenue from contract with customer | $ 50 | $ 47 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Contract with customer, liability | $ 51 | $ 51 | |||
Accounts receivable, net | 1,254 | 1,315 | |||
Allowance for doubtful accounts | 104 | $ 108 | |||
Contract with customer, asset | 0 | ||||
Revenue recognized | 0 | $ 0 | |||
Contract with customer, performance obligation satisfied in previous period | $ 0 | $ 0 | |||
Accounts Receivable | Customer concentration risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 1.00% | 2.00% | |||
Revenues | Product concentration risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 74.00% | ||||
Revenues | Largest customer | Customer concentration risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 1.00% | 1.00% | 1.00% | 1.00% | |
Owned equipment rentals | Revenues | Product concentration risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 68.00% | ||||
US | Revenues | Geographic Concentration Risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 91.00% | ||||
General rentals | Revenues | Product concentration risk | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration risk | 79.00% |
Revenue Recognition (Allowance
Revenue Recognition (Allowance for Doubtful Accounts Rollforward) (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 108 | $ 103 |
Charged to costs and expenses | 0 | 4 |
Charged to revenue | 4 | 8 |
Deductions | (8) | (8) |
Ending balance | $ 104 | $ 107 |
Segment Information (Financial
Segment Information (Financial Information by Segment) (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($)region | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Segment Reporting Information | |||
Revenues | $ 2,057 | $ 2,125 | |
Depreciation and amortization expense | 466 | 526 | |
Equipment rentals gross profit | 714 | 727 | |
Capital expenditures | 314 | 261 | |
Assets | 17,542 | $ 17,868 | |
Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 1,667 | 1,783 | |
Sales of rental equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 267 | 208 | |
Sales of new equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 49 | 62 | |
Contractor supplies sales | |||
Segment Reporting Information | |||
Revenue from contract with customer | 24 | 25 | |
Service and other revenues | |||
Segment Reporting Information | |||
Revenue from contract with customer | 50 | 47 | |
Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | $ 577 | 610 | |
General rentals | |||
Segment Reporting Information | |||
Number of geographic regions entity operates in (locations) | region | 11 | ||
Revenues | $ 1,622 | 1,694 | |
Depreciation and amortization expense | 380 | 437 | |
Capital expenditures | 284 | 198 | |
Assets | 14,814 | 15,051 | |
General rentals | Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 1,273 | 1,394 | |
General rentals | Sales of rental equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 247 | 190 | |
General rentals | Sales of new equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 42 | 53 | |
General rentals | Contractor supplies sales | |||
Segment Reporting Information | |||
Revenue from contract with customer | 16 | 16 | |
General rentals | Service and other revenues | |||
Segment Reporting Information | |||
Revenue from contract with customer | 44 | 41 | |
General rentals | Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | 411 | 448 | |
Trench, power and fluid solutions | |||
Segment Reporting Information | |||
Revenues | 435 | 431 | |
Depreciation and amortization expense | 86 | 89 | |
Capital expenditures | 30 | 63 | |
Assets | 2,728 | $ 2,817 | |
Trench, power and fluid solutions | Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 394 | 389 | |
Trench, power and fluid solutions | Sales of rental equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 20 | 18 | |
Trench, power and fluid solutions | Sales of new equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 7 | 9 | |
Trench, power and fluid solutions | Contractor supplies sales | |||
Segment Reporting Information | |||
Revenue from contract with customer | 8 | 9 | |
Trench, power and fluid solutions | Service and other revenues | |||
Segment Reporting Information | |||
Revenue from contract with customer | 6 | 6 | |
Trench, power and fluid solutions | Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | $ 166 | $ 162 |
Segment Information (Reconcilia
Segment Information (Reconciliation to Income (loss) from Continuing Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 714 | $ 727 |
Selling, general and administrative expenses | (250) | (267) |
Restructuring charge | (1) | (2) |
Non-rental depreciation and amortization | (91) | (100) |
Interest expense, net | (99) | (136) |
Other income, net | 2 | 4 |
Income before provision for income taxes | 275 | 226 |
Total equipment rentals gross profit | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | 577 | 610 |
Gross profit from other lines of business | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 137 | $ 117 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Narrative) (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)restructuring_program | |
Restructuring Cost and Reserve | ||
Restructuring costs incurred to date | $ 351 | |
Asset impairment charges | $ 26 | |
Closed Restructuring Programs | ||
Restructuring Cost and Reserve | ||
Number of restructuring programs | restructuring_program | 5 | |
Restructuring and related activities, number of completed restructuring programs, liability | $ 12 |
Restructuring and Asset Impai_4
Restructuring and Asset Impairment Charges (Schedule of Restructuring Charges) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Charged to Costs and Expenses | $ 1 | $ 2 |
Restructuring costs incurred to date | 351 | |
2020-2021 Cost Savings Restructuring Program | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Reserve Balance | 5 | |
Charged to Costs and Expenses | 0 | |
Payments and Other | (2) | |
Ending Reserve Balance | 3 | |
Restructuring costs incurred to date | 16 | |
2020-2021 Cost Savings Restructuring Program | Branch closure charges | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Reserve Balance | 3 | |
Charged to Costs and Expenses | 0 | |
Payments and Other | (1) | |
Ending Reserve Balance | 2 | |
Restructuring costs incurred to date | 8 | |
2020-2021 Cost Savings Restructuring Program | Severance and other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Reserve Balance | 2 | |
Charged to Costs and Expenses | 0 | |
Payments and Other | (1) | |
Ending Reserve Balance | 1 | |
Restructuring costs incurred to date | $ 8 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Equipment | $ 289 | $ 300 |
Insurance | 12 | 18 |
Advertising reimbursements | 9 | 11 |
Income taxes | 4 | 4 |
Other | 44 | 42 |
Prepaid expenses and other assets | 358 | $ 375 |
Increase (decrease) in prepaid expense and other assets, equipment, placed deposits | (50) | |
Increase (decrease) in prepaid expense and other assets, equipment purchase | $ (61) |
Fair Value Measurements (Fair v
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,967 | $ 6,965 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 7,344 | $ 7,470 |
Debt (Schedule of long-term deb
Debt (Schedule of long-term debt instruments) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument | ||
Finance leases | $ 131,000,000 | $ 135,000,000 |
Total debt | 9,082,000,000 | 9,682,000,000 |
Less short-term portion | (585,000,000) | (704,000,000) |
Total long-term debt | 8,497,000,000 | 8,978,000,000 |
Term loan facility expiring 2025 | ||
Debt Instrument | ||
Long-term debt | $ 969,000,000 | 971,000,000 |
Annual repayment rate | 1.00% | |
Line of Credit | $3.75 billion ABL Facility expiring 2024 | ||
Debt Instrument | ||
Maximum borrowing capacity | $ 3,750,000,000 | |
Long-term debt | 491,000,000 | 977,000,000 |
Borrowing capacity, net of letters of credit | 3,191,000,000 | |
Letters of credit | $ 60,000,000 | |
Interest rate at March 31, 2021 | 1.30% | |
Average month-end debt outstanding | $ 624,000,000 | |
Weighted-average interest rate on average debt outstanding | 1.30% | |
Maximum month-end debt outstanding | $ 774,000,000 | |
Senior notes | 5 7/8 percent Senior Notes due 2026 | ||
Debt Instrument | ||
Stated interest rate | 5.875% | |
Long-term debt | $ 999,000,000 | 999,000,000 |
Senior notes | 5 1/2 percent Senior Notes due 2027 | ||
Debt Instrument | ||
Stated interest rate | 5.50% | |
Long-term debt | $ 994,000,000 | 994,000,000 |
Senior notes | 3 7/8 percent Senior Secured Notes due 2027 | ||
Debt Instrument | ||
Stated interest rate | 3.875% | |
Long-term debt | $ 742,000,000 | 742,000,000 |
Senior notes | 4 7/8 percent Senior Notes due 2028 | ||
Debt Instrument | ||
Stated interest rate | 4.875% | |
Long-term debt | $ 1,655,000,000 | 1,654,000,000 |
Senior notes | 4 7/8 percent Senior Notes due 2028 | ||
Debt Instrument | ||
Stated interest rate | 4.875% | |
Long-term debt | $ 4,000,000 | 4,000,000 |
Senior notes | 5 1/4 percent Senior Notes due 2030 | ||
Debt Instrument | ||
Stated interest rate | 5.25% | |
Long-term debt | $ 743,000,000 | 742,000,000 |
Senior notes | 4 percent Senior Notes due 2030 | ||
Debt Instrument | ||
Stated interest rate | 4.00% | |
Long-term debt | $ 742,000,000 | 742,000,000 |
Senior notes | 3 7/8 percent Senior Notes due 2031 | ||
Debt Instrument | ||
Stated interest rate | 3.875% | |
Long-term debt | $ 1,088,000,000 | 1,088,000,000 |
Line of Credit | Accounts Receivable Securitization Facility expiring 2021 | ||
Debt Instrument | ||
Long-term debt | 524,000,000 | $ 634,000,000 |
Borrowing capacity, net of letters of credit | $ 276,000,000 | |
Interest rate at March 31, 2021 | 1.40% | |
Average month-end debt outstanding | $ 603,000,000 | |
Weighted-average interest rate on average debt outstanding | 1.40% | |
Maximum month-end debt outstanding | $ 644,000,000 | |
Collateral amount | 787,000,000 | |
Line of Credit | Term loan facility | ||
Debt Instrument | ||
Borrowing capacity, net of letters of credit | $ 0 | |
Interest rate at March 31, 2021 | 1.90% | |
Average month-end debt outstanding | $ 977,000,000 | |
Weighted-average interest rate on average debt outstanding | 1.90% | |
Maximum month-end debt outstanding | $ 978,000,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Line of Credit | ABL Facility | |
Debt Instrument | |
Minimum available borrowing capacity, percentage | 10.00% |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Product concentration risk | Revenues | |
Lessee, Lease, Description [Line Items] | |
Percentage of equipment rental revenue | 74.00% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 5 years |
Leases (Summary of Financial In
Leases (Summary of Financial Information Associated with Leases) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Operating lease right-of-use assets | $ 681 | $ 688 |
Total leased assets | 906 | 913 |
Current | ||
Accrued expenses and other liabilities | 178 | 178 |
Short-term debt and current maturities of long-term debt | $ 51 | $ 60 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities |
Long-term | ||
Operating lease liabilities | $ 541 | $ 549 |
Long-term debt | 80 | 75 |
Total lease liabilities | 850 | 862 |
Rental equipment | ||
Assets | ||
Finance lease, right-of-use asset, before accumulated amortization | 296 | 295 |
Accumulated depreciation | (86) | (86) |
Finance lease assets, net | 210 | 209 |
Property and equipment, net | ||
Assets | ||
Accumulated depreciation | (13) | (11) |
Finance lease assets, net | 15 | 16 |
Non-rental vehicles | ||
Assets | ||
Finance lease, right-of-use asset, before accumulated amortization | 8 | 8 |
Buildings | ||
Assets | ||
Finance lease, right-of-use asset, before accumulated amortization | $ 20 | $ 19 |
Leases (Lease Cost) (Details)
Leases (Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finance lease cost | ||
Sublease income | $ (32) | $ (34) |
Net lease cost | 69 | 72 |
Short-term lease, cost | 28 | 31 |
Cost of equipment rentals, excluding depreciation | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 90 | 92 |
Selling, general and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 2 | 3 |
Restructuring charge | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 1 | 1 |
Depreciation of rental equipment | ||
Finance lease cost | ||
Amortization of leased assets | 7 | 7 |
Non-rental depreciation and amortization | ||
Finance lease cost | ||
Amortization of leased assets | 0 | 0 |
Interest expense, net | ||
Finance lease cost | ||
Interest on lease liabilities | $ 1 | $ 3 |
Leases (Maturity of Lease Liabi
Leases (Maturity of Lease Liabilities) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Operating leases | ||
2021 | $ 155 | |
2022 | 181 | |
2023 | 150 | |
2024 | 117 | |
2025 | 81 | |
Thereafter | 111 | |
Total | 795 | |
Less amount representing interest | (76) | |
Present value of lease liabilities | 719 | |
Finance leases | ||
2021 | 46 | |
2022 | 44 | |
2023 | 32 | |
2024 | 11 | |
2025 | 2 | |
Thereafter | 5 | |
Total | 140 | |
Less amount representing interest | (9) | |
Present value of lease liabilities | $ 131 | $ 135 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Mar. 31, 2021 | Dec. 31, 2020 |
Weighted-average remaining lease term (years) | ||
Operating leases | 4 years 10 months 24 days | 5 years |
Finance leases | 3 years | 3 years |
Weighted-average discount rate | ||
Operating leases | 4.10% | 4.20% |
Finance leases | 3.00% | 3.40% |
Leases (Other Information) (Det
Leases (Other Information) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 52 | $ 52 |
Operating cash flows from finance leases | 1 | 3 |
Financing cash flows from finance leases | 21 | 12 |
Leased assets obtained in exchange for new operating lease liabilities | 41 | 48 |
Leased assets obtained in exchange for new finance lease liabilities | $ 16 | $ 34 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income available to common stockholders | $ 203 | $ 173 |
Denominator: | ||
Denominator for basic earnings per share—weighted-average common shares (in shares) | 72,338 | 74,041 |
Effect of dilutive securities: | ||
Denominator for diluted earnings per share—adjusted weighted-average common shares (in shares) | 72,674 | 74,266 |
Basic earnings per share (in dollars per share) | $ 2.81 | $ 2.33 |
Diluted earnings per share (in dollars per share) | $ 2.80 | $ 2.33 |
Employee stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 6 | 15 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 330 | 210 |
Subsequent Event (Details)
Subsequent Event (Details) $ / shares in Units, rental_unit in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021USD ($)$ / shares | Mar. 31, 2021USD ($)rental_unit | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Subsequent Event [Line Items] | ||||
Revenues | $ 2,057 | $ 2,125 | ||
General Finance Corporation | ||||
Subsequent Event [Line Items] | ||||
Rental fleet, number of units (approximately) | rental_unit | 0.1 | |||
Revenues | $ 346 | |||
Property subject to or available for operating lease, gross | $ 639 | |||
General Finance Corporation | Subsequent Event | Forecast | ||||
Subsequent Event [Line Items] | ||||
Business acquisition, share price (USD per share) | $ / shares | $ 19 | |||
Aggregate consideration paid | $ 996 | |||
Business combination, contingent consideration, liability | $ 400 |