Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HERC HOLDINGS INC. | |
Entity Central Index Key | 1,364,479 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 28,498,142 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 18 | $ 41.5 |
Receivables, net of allowances of $24.9 and $26.9, respectively | 373.5 | 386.3 |
Inventory | 20.2 | 23.7 |
Prepaid and other current assets | 22.2 | 23 |
Total current assets | 433.9 | 474.5 |
Rental equipment, net | 2,620.8 | 2,374.6 |
Property and equipment, net | 287 | 286.3 |
Intangible assets, net | 294.5 | 283.9 |
Goodwill | 91 | 91 |
Other long-term assets | 43.6 | 39.4 |
Total assets | 3,770.8 | 3,549.7 |
LIABILITIES AND EQUITY | ||
Current maturities of long-term debt and financing obligations | 28.9 | 25.4 |
Accounts payable | 233.8 | 152 |
Accrued liabilities | 119.1 | 113.3 |
Total current liabilities | 381.8 | 290.7 |
Long-term debt, net | 2,229 | 2,137.1 |
Financing obligations, net | 110.9 | 112.9 |
Deferred tax liabilities | 458.4 | 462.8 |
Other long-term liabilities | 36.4 | 35.8 |
Total liabilities | 3,216.5 | 3,039.3 |
Commitments and contingencies (Note 9) | ||
Equity: | ||
Preferred stock, $0.01 par value, 13.3 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 133.3 shares authorized, 31.2 and 31.1 shares issued and 28.5 and 28.3 shares outstanding | 0.3 | 0.3 |
Additional paid-in capital | 1,773.8 | 1,763.1 |
Accumulated deficit | (426.6) | (462.4) |
Accumulated other comprehensive loss | (101.2) | (98.6) |
Treasury stock, at cost, 2.7 shares and 2.7 shares | (692) | (692) |
Total equity | 554.3 | 510.4 |
Total liabilities and equity | $ 3,770.8 | $ 3,549.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 24.9 | $ 26.9 |
Preferred Stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized (in shares) | 13,300,000 | 13,300,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 133,300,000 | 133,300,000 |
Common Stock, shares issued (in shares) | 31,200,000 | 31,100,000 |
Common Stock, shares outstanding (in shares) | 28,500,000 | 28,300,000 |
Treasury Stock, shares (in shares) | 2,700,000 | 2,700,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenue | $ 516.2 | $ 457.6 | $ 1,433 | $ 1,262.8 |
Expenses: | ||||
Direct operating | 194.4 | 188.1 | 584.9 | 525.6 |
Depreciation of rental equipment | 98.3 | 96.3 | 288.6 | 283.5 |
Cost of sales of rental equipment | 51.1 | 28.6 | 168.9 | 134.9 |
Cost of sales of new equipment, parts and supplies | 10.6 | 10.8 | 27.7 | 30.3 |
Selling, general and administrative | 78.4 | 84.5 | 230.2 | 244.4 |
Impairment | 0 | 0 | 0.1 | 29.3 |
Interest expense, net | 38.6 | 32.4 | 103 | 101.8 |
Other income, net | (0.4) | (1.7) | (0.9) | (1.5) |
Total expenses | 471 | 439 | 1,402.5 | 1,348.3 |
Income (loss) before income taxes | 45.2 | 18.6 | 30.5 | (85.5) |
Income tax benefit (provision) | 1 | (5.8) | 5.3 | 31.5 |
Net income (loss) | $ 46.2 | $ 12.8 | $ 35.8 | $ (54) |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 28.5 | 28.3 | 28.4 | 28.3 |
Weighted Average Number of Shares Outstanding, Diluted | 28.9 | 28.6 | 28.9 | 28.3 |
Earnings (loss) per share: | ||||
Earnings Per Share, Diluted | $ 1.60 | $ 0.45 | $ 1.24 | $ (1.91) |
Earnings Per Share, Basic | $ 1.62 | $ 0.45 | $ 1.26 | $ (1.91) |
Equipment rental | ||||
Revenues: | ||||
Revenue | $ 449 | $ 413.1 | $ 1,210.6 | $ 1,084.5 |
Sales of rental equipment | ||||
Revenues: | ||||
Revenue | 50.1 | 27.7 | 175.6 | 128.5 |
Sales of new equipment, parts and supplies | ||||
Revenues: | ||||
Revenue | 14.2 | 13.9 | 36.4 | 40.3 |
Service and other revenue | ||||
Revenues: | ||||
Revenue | $ 2.9 | $ 2.9 | $ 10.4 | $ 9.5 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 46.2 | $ 12.8 | $ 35.8 | $ (54) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 8.6 | 12.8 | (5.6) | 21.5 |
Unrealized gains and losses on hedging instruments: | ||||
Unrealized gains (losses) on hedging instruments | 0.2 | 0.5 | 3.2 | (0.4) |
Income tax (provision) benefit related to hedging instruments | 0 | (0.2) | (0.8) | 0.2 |
Pension and postretirement benefit liability adjustments: | ||||
Amortization of net losses included in net periodic pension cost | 0.3 | 0.2 | 0.8 | 1.1 |
Pension and postretirement benefit liability adjustments arising during the period | 0 | 0 | 0 | (2.7) |
Income tax (provision) benefit related to defined benefit pension plans | (0.1) | (0.1) | (0.2) | 0.6 |
Total other comprehensive income (loss) | 9 | 13.2 | (2.6) | 20.3 |
Total comprehensive income (loss) | $ 55.2 | $ 26 | $ 33.2 | $ (33.7) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2017 | 28.3 | |||||
Beginning balance at Dec. 31, 2017 | $ 510.4 | $ 0.3 | $ 1,763.1 | $ (462.4) | $ (98.6) | $ (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | (35.8) | |||||
Other comprehensive loss | (2.6) | (2.6) | ||||
Net settlement on vesting of equity awards, shares | 0.1 | |||||
Net settlement on vesting of equity awards | (1.1) | (1.1) | ||||
Stock-based compensation charges | 9.9 | 9.9 | ||||
Employee stock purchase plan | 1.4 | 1.4 | ||||
Exercise of stock options, shares | 0.1 | |||||
Exercise of stock options | 0.5 | 0.5 | ||||
Ending balance at Sep. 30, 2018 | $ 554.3 | $ 0.3 | $ 1,773.8 | $ (426.6) | $ (101.2) | $ (692) |
Ending balance (in shares) at Sep. 30, 2018 | 28.5 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 35.8 | $ (54) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation of rental equipment | 288.6 | 283.5 |
Depreciation of property and equipment | 38.2 | 34 |
Amortization of intangible assets | 3.6 | 3.7 |
Amortization of deferred debt and financing obligations costs | 4.7 | 4.7 |
Stock-based compensation charges | 9.9 | 7.5 |
Impairment | 0.1 | 29.3 |
Provision for receivables allowance | 41 | 39.4 |
Deferred taxes | (6.4) | (31.5) |
(Gain) loss on sale of rental equipment | (6.7) | 6.4 |
Income from joint ventures | (1.3) | (1.3) |
Other | 9.6 | 2.1 |
Changes in assets and liabilities: | ||
Receivables | (46.7) | (98.6) |
Inventory, prepaid and other assets | (2.2) | (6.7) |
Accounts payable | (3.5) | (3.4) |
Accrued liabilities and other long-term liabilities | 10.3 | 38.5 |
Net cash provided by operating activities | 375 | 253.6 |
Cash flows from investing activities: | ||
Rental equipment expenditures | (617.5) | (356.3) |
Proceeds from disposal of rental equipment | 189.1 | 121.6 |
Non-rental capital expenditures | (58.5) | (57.1) |
Proceeds from disposal of property and equipment | 3.9 | 2.8 |
Net cash used in investing activities | (483) | (289) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (123.5) | (123.5) |
Proceeds from revolving lines of credit and securitization | 650.8 | 405.9 |
Repayments on revolving lines of credit and securitization | (424.5) | (238.7) |
Principal payments under capital lease and financing obligations | (13.1) | (11.6) |
Debt extinguishment costs | (3.7) | (3.7) |
Payments of Debt Issuance Costs | (1) | 0 |
Proceeds from exercise of stock options and other | 0.5 | 0.2 |
Proceeds from employee stock purchase plan | 1.4 | 0.7 |
Net settlement on vesting of equity awards | (1.1) | 0 |
Net cash provided by financing activities | 85.8 | 29.3 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (1.3) | 1.3 |
Net decrease in cash, cash equivalents and restricted cash during the period | (23.5) | (4.8) |
Cash, cash equivalents and restricted cash at beginning of period | 41.5 | 31 |
Cash, cash equivalents and restricted cash at end of period | 18 | 26.2 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 90.2 | 74.9 |
Cash paid (refunded) for income taxes, net | 12 | (3.1) |
Supplemental disclosure of non-cash investing activity: | ||
Purchases of rental equipment in accounts payable | 80.6 | 106.7 |
Non-rental capital expenditures in accounts payable | 5.6 | 1.3 |
Supplemental disclosure of non-cash financing activity: | ||
Non-cash settlement of transactions with THC through equity | $ 0 | $ 3.6 |
Background
Background | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background Herc Holdings Inc. ("we," "us," "our," "Herc Holdings," "the Company" or, as the context requires, "its") is one of the leading equipment rental suppliers with approximately 275 locations at September 30, 2018 , principally in North America. The Company conducts substantially all of its operations through subsidiaries, including Herc Rentals Inc. ("Herc"). Operations are conducted under the Herc Rentals brand in the United States and Canada and under the Hertz Equipment Rental brand in other international locations. With over 50 years of experience, we are a full-line equipment rental supplier offering a broad portfolio of equipment for rent. In addition to our principal business of equipment rental, we sell used equipment and contractor supplies such as construction consumables, tools, small equipment and safety supplies; provide repair, maintenance, equipment management services and safety training to certain of our customers; offer equipment re-rental services and provide on-site support to our customers; and provide ancillary services such as equipment transport, rental protection, cleaning, refueling and labor. Our classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction and lighting. Our equipment rental business is supported by ProSolutions TM , our industry-specific solutions-based services which includes power generation, climate control, remediation and restoration, and studio and production equipment, and our ProContractor professional grade tools. On June 30, 2016, the Company, in its previous form as the holding company of both the existing equipment rental operations as well as the former vehicle rental operations (in its form prior to the Spin-Off, "Hertz Holdings"), completed a spin-off (the "Spin-Off") of its global vehicle rental business through a dividend to stockholders of all of the issued and outstanding common stock of Hertz Rental Car Holding Company, Inc., which was re-named Hertz Global Holdings, Inc. ("New Hertz") in connection with the Spin-Off. New Hertz is an independent public company that trades on the New York Stock Exchange under the symbol "HTZ" and continues to operate its global vehicle rental business through its operating subsidiaries including The Hertz Corporation ("THC"). The Company changed its name to Herc Holdings Inc. on June 30, 2016, and trades on the New York Stock Exchange under the symbol “HRI.” |
Basis of Presentation and Recen
Basis of Presentation and Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recently Issued Accounting Pronouncements | Basis of Presentation and Recently Issued Accounting Pronouncements Basis of Presentation The Company prepares its condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements, however, these condensed consolidated financial statements do not include all of the disclosures required for complete annual financial statements and, accordingly, certain information, footnotes and disclosures normally included in annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with Securities and Exchange Commission ("SEC") rules and regulations. The Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, the condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 28, 2018. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include allowance for accounts receivable, depreciation of rental equipment, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and intangible assets including goodwill and trade name, pension and postretirement benefits, valuation of stock-based compensation, reserves for litigation and other contingencies, accounting for income taxes, among others. Principles of Consolidation The condensed consolidated financial statements include the accounts of Herc Holdings and its wholly owned subsidiaries. In the event that the Company is a primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. The Company accounts for its investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation. Recently Issued Accounting Pronouncements Adopted Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance that replaced existing revenue recognition guidance in U.S. GAAP. The new guidance requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted the guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The Company did not record any amount to the opening balance of retained earnings as of January 1, 2018 as the cumulative impact of adopting the guidance was not material. The comparative financial statement information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the guidance had no material impact on the Company’s consolidated balance sheet as of January 1, 2018. The Company's accounting for equipment rental revenue is primarily outside the scope of this new revenue guidance and will be evaluated under the new lease guidance which is described further under the subheading "Leases" below. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued guidance to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. The Company adopted this guidance on January 1, 2018 in accordance with the effective date and has amended its statement of cash flows for the nine months ended September 30, 2017 by reclassifying $3.7 million of debt extinguishment costs from cash used in operating activities to cash used in financing activities. Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued guidance requiring an entity to recognize upon transfer the income tax consequences of an intra-entity transfer of an asset other than inventory, eliminating the current recognition exception. Two common examples of assets included in the scope of this standard are intellectual property and property, plant and equipment. The Company adopted this guidance on January 1, 2018 in accordance with the effective date. Adoption of this guidance did not have a significant impact on the Company's financial position, results of operations or cash flows. Statement of Cash Flows: Restricted Cash In November 2016, the FASB issued guidance requiring restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. The Company adopted this guidance on January 1, 2018 in accordance with the effective date and has amended its statement of cash flows for the nine months ended September 30, 2017 accordingly. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs In March 2017, the FASB issued guidance on the presentation of net periodic pension and postretirement benefit costs in the income statement and on the components eligible for capitalization. The guidance requires the reporting of the service cost component of the net periodic benefit costs in the same income statement line item as other components of net periodic costs arising from services rendered by an employee during the period, and that non-service-cost components be presented in the income statement separately from the service cost components and outside a subtotal of income from operations. The guidance also allows for the capitalization of the service cost components, when applicable. The Company adopted this guidance on January 1, 2018 in accordance with the effective date. Adoption of this guidance resulted in an immaterial reclassification of costs from "Direct operating" and "Selling, general and administrative" expense into "Other income, net" in the Company's statement of operations. Compensation - Stock Compensation In May 2017, the FASB issued guidance pursuant to which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the updated guidance, a modification is defined as a change in the terms or conditions of a share-based payment award, and an entity should account for the effects of a modification unless all of the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation techniques that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance requires prospective application to an award modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018 in accordance with the effective date and will apply the guidance to any future changes to the terms or conditions of its share-based payment awards. Not Yet Adopted Leases In February 2016, the FASB issued guidance that replaces the existing lease guidance. The new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods using a modified retrospective transition approach. The Company expects to adopt this guidance on its effective date of January 1, 2019 and is currently in the process of assessing the potential impact this guidance may have on its financial position, results of operations and cash flows, including which of its existing lease arrangements will be impacted by the new guidance and whether other arrangements not currently classified as leases may become subject to the guidance. The Company plans to take advantage of the transition package of practical expedients permitted within the new standard which, among other things, allows the historical lease classification to be carried forward. Additionally, the Company is implementing a lease management system to assist in the accounting and is evaluating additional changes to its processes and internal controls to ensure the new reporting and disclosure requirements are met upon adoption. Upon adoption, the Company currently expects to recognize additional lease liabilities totaling between $165.0 million and $185.0 million , with corresponding ROU assets. The liabilities will be calculated as the present value of the remaining minimum rental payments for existing operating leases. This estimate could change due to factors including future lease versus buy decisions and acquisitions and dispositions of assets under lease arrangements. Additionally, as discussed in Note 3 , " Revenue Recognition ," most of the Company's equipment rental revenues will be accounted for under the current lease accounting standard, Accounting Standards Codification (“ASC”) Topic 840, Leases, ("Topic 840") until the adoption of the new lease accounting standard ("Topic 842"). While the Company's review of the equipment rental revenue under Topic 842 is ongoing, the Company has preliminarily concluded that no significant changes are expected to the accounting for most of its equipment rental revenues upon adoption of Topic 842. Income Statement - Reporting Comprehensive Income In February 2018, the FASB issued guidance that allows reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") that would otherwise be stranded in accumulated other comprehensive income. This guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company is principally engaged in the business of renting equipment. Ancillary to the Company’s principal equipment rental business, the Company also sells used rental equipment, new equipment and parts and supplies and offers certain services to support its customers. The Company’s business is primarily focused in North America with revenue from the United States representing approximately 89.6% and 88.7% of total revenue for the three and nine months ended September 30, 2018, respectively, compared to 88.6% and 88.2% for the same periods in 2017. The Company’s rental transactions are principally accounted for under Topic 840. The Company’s sale of rental and new equipment, parts and supplies along with certain services provided to customers are accounted for under ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). Prior to the adoption of Topic 606, the Company accounted for these non-rental transactions under ASC Topic 605, Revenue Recognition ("Topic 605"). The following tables summarize the applicable accounting guidance for the Company’s revenues for the three and nine months ended September 30, 2018 and 2017, respectively (in millions): Three Months Ended September 30, 2018 2017 Topic 840 Topic 606 Total Topic 840 Topic 605 Total Revenues: Equipment rental $ 404.8 $ — $ 404.8 $ 375.3 $ — $ 375.3 Other rental revenue: Delivery and pick-up — 25.5 25.5 — 21.4 21.4 Other 18.7 — 18.7 16.4 — 16.4 Total other rental revenues 18.7 25.5 44.2 16.4 21.4 37.8 Total equipment rentals 423.5 25.5 449.0 391.7 21.4 413.1 Sales of rental equipment — 50.1 50.1 — 27.7 27.7 Sales of new equipment, parts and supplies — 14.2 14.2 — 13.9 13.9 Service and other revenues — 2.9 2.9 — 2.9 2.9 Total revenues $ 423.5 $ 92.7 $ 516.2 $ 391.7 $ 65.9 $ 457.6 Nine Months Ended September 30, 2018 2017 Topic 840 Topic 606 Total Topic 840 Topic 605 Total Revenues: Equipment rental $ 1,101.6 $ — $ 1,101.6 $ 993.9 $ — $ 993.9 Other rental revenue: Delivery and pick-up — 63.9 63.9 — 54.3 54.3 Other 45.1 — 45.1 36.3 — 36.3 Total other rental revenues 45.1 63.9 109.0 36.3 54.3 90.6 Total equipment rentals 1,146.7 63.9 1,210.6 1,030.2 54.3 1,084.5 Sales of rental equipment — 175.6 175.6 — 128.5 128.5 Sales of new equipment, parts and supplies — 36.4 36.4 — 40.3 40.3 Service and other revenues — 10.4 10.4 — 9.5 9.5 Total revenues $ 1,146.7 $ 286.3 $ 1,433.0 $ 1,030.2 $ 232.6 $ 1,262.8 Topic 840 revenues Equipment Rental Revenue Equipment rental revenue includes revenue generated from renting equipment to customers and is recognized on a straight-line basis over the length of the rental contract. The Company offers a broad portfolio of equipment for rent on a daily, weekly or monthly basis with most rental agreements cancelable upon the return of the equipment. Virtually all customer contracts can be canceled with no penalty by the customer by returning the equipment within one day, therefore, the Company does not allocate the transaction price between the different contract elements. Also included in equipment rental revenue is re-rent revenue in which the Company will rent specific pieces of equipment from vendors and then re-rent that equipment to its customers. Provisions for discounts, rebates to customers and other adjustments are provided for in the period the related revenue is recorded. Other Other equipment rental revenue is primarily comprised of fees for the Company’s rental protection program and environmental charges. Fees paid for the rental protection program allow customers to limit the risk of financial loss in the event the Company’s equipment is damaged or lost. Fees for the rental protection program and environmental recovery fees are recognized on a straight-line basis over the length of the rental contract. Topic 606 revenues Delivery and pick-up Delivery and pick-up revenue associated with renting equipment is recognized when the services are performed. Sales of Rental Equipment, New Equipment, Parts and Supplies The Company sells its used rental equipment, new equipment, parts and supplies. Revenues recorded for each category are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sales of rental equipment $ 50.1 $ 27.7 $ 175.6 $ 128.5 Sales of new equipment 5.1 7.4 15.5 20.8 Sales of parts and supplies 9.1 6.5 20.9 19.5 Total $ 64.3 $ 41.6 $ 212.0 $ 168.8 The Company recognizes revenue from the sale of rental equipment, new equipment, parts and supplies when control of the asset transfers to the customer, which is typically when the asset is picked up by or delivered to the customer and when significant risks and rewards of ownership have passed to the customer. Sales and other tax amounts collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue. The Company routinely sells its used rental equipment in order to manage repair and maintenance costs, as well as the composition, age and size of its fleet. The Company disposes of used equipment through a variety of channels including retail sales to customers and other third parties, sales to wholesalers, brokered sales and auctions. The Company also sells new equipment, parts and supplies. The types of new equipment that the Company sells vary by location and include a variety of ProContractor tools and supplies, small equipment (such as work lighting, generators, pumps, compaction equipment and power trowels), safety supplies and expendables. Under Topic 606, the accounts receivable balance, prior to allowances for doubtful accounts, for the sale of rental equipment, new equipment, parts and supplies, was approximately $19.6 million as of September 30, 2018 . Service and other revenues Service and other revenues primarily include revenue earned from equipment management and similar services for rental customers which includes providing customer support functions such as dedicated in-plant operations, plant management services, training, and repair and maintenance services particularly to industrial customers who request such services. The Company recognizes revenue for service and other revenues as the services are provided. Service and other revenues are typically invoiced together with a customer’s rental amounts and, therefore, it is not practical for the Company to separate the accounts receivable amount related to services and other revenues that are accounted for under Topic 606; however, such amount is not considered material. Receivables and contract assets and liabilities Most of the Company's equipment rental revenue is accounted for under Topic 840. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent the Company's equipment. Concentration of credit risk with respect to the Company's accounts receivable is limited because a large number of geographically diverse customers makes up its customer base. No single customer makes up more than 3% of the Company's equipment rental revenue or accounts receivable balance for the last three years. The Company manages credit risk associated with its accounts receivable at the customer level through credit approvals, credit limits and other monitoring procedures. The Company maintains allowances for doubtful accounts that reflect the Company's estimate of the amount of receivables that the Company will be unable to collect based on its historical write-off experience. The Company does not have contract assets or material contract liabilities associated with customer contracts. The Company's contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. The Company did not recognize material revenue during the three and nine months ended September 30, 2018 that was included in the contract liability balance as of the beginning of such period. Performance obligations Most of the Company's revenue recognized under Topic 606 is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, the Company does not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amount of such revenue recognized during the three and nine months ended September 30, 2018 was not material. We also do not expect to recognize material revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2018 . Contract estimates and judgments The Company's 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 on the Company's contracts; • As noted above, the Company's contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation; • The Company's revenues do not include material amounts of variable consideration; and • Most of the Company's 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, the revenue recognized under Topic 606 is generally recognized at the time of delivery to, or pick-up by, the customer. The Company monitors and reviews its estimated standalone selling prices on a regular basis. |
Revenue Earning Equipment
Revenue Earning Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property Subject to or Available for Operating Lease, Net [Abstract] | |
Revenue Earning Equipment | Rental Equipment Rental equipment consists of the following (in millions): September 30, 2018 December 31, 2017 Rental equipment $ 4,012.9 $ 3,757.2 Less: Accumulated depreciation (1,392.1 ) (1,382.6 ) Rental equipment, net $ 2,620.8 $ 2,374.6 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at September 30, 2018 Weighted Average Stated Interest Rate at September 30, 2018 Fixed or Floating Interest Rate Maturity September 30, December 31, Senior Secured Second Priority Notes 2022 Notes 7.88% 7.50% Fixed 2022 $ 427.0 $ 488.0 2024 Notes 8.06% 7.75% Fixed 2024 437.5 500.0 Other Debt ABL Credit Facility N/A 3.90% Floating 2021 1,177.8 1,130.0 AR Facility N/A 2.87% Floating 2020 175.0 — Capital leases 4.15% N/A Fixed 2018-2022 42.5 53.7 Other borrowings N/A 4.79% Floating 2018 6.3 2.6 Unamortized Debt Issuance Costs (a) (11.0 ) (14.5 ) Total debt 2,255.1 2,159.8 Less: Current maturities of long-term debt (26.1 ) (22.7 ) Long-term debt, net $ 2,229.0 $ 2,137.1 (a) Unamortized debt issuance costs totaling $11.4 million and $13.3 million related to the ABL Credit Facility and, as of September 30, 2018, the AR Facility (as each is defined below) are included in "Other long-term assets" in the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 , respectively. The effective interest rates for the fixed rate 2022 Notes and 2024 Notes (as defined below) include the stated interest on the notes and the amortization of any debt issuance costs. Senior Secured Second Priority Notes In June 2016 , Herc issued $610.0 million aggregate principal amount of 7.50% senior secured second priority notes due 2022 (the "2022 Notes") and $625.0 million aggregate principal amount of 7.75% senior secured second priority notes due 2024 (the "2024 Notes" and, together with the 2022 Notes, the "Notes"). In March and October 2017, Herc drew down on its ABL Credit Facility (as defined below) and cumulatively redeemed $122.0 million in aggregate principal amount of the 2022 Notes and $125.0 million in aggregate principal amount of the 2024 Notes. On July 12, 2018, for the redemption period from June 1, 2018 to May 31, 2019, Herc drew down on its ABL Credit Facility (as defined below) and redeemed $61.0 million in aggregate principal amount of the 2022 Notes and $62.5 million in aggregate principal amount of the 2024 Notes and recorded a $5.4 million loss on the early extinguishment of debt, comprised of a 3% cash premium totaling $3.7 million and a non-cash charge of $1.7 million for the write-off of unamortized debt issuance costs. The loss on early extinguishment of debt is included in "Interest expense, net" in the Company's condensed consolidated statement of operations. ABL Credit Facility The Company's asset-based revolving credit agreement, executed by its Herc subsidiary, provides for senior secured revolving loans up to a maximum aggregate principal amount of $1,750 million (subject to availability under a borrowing base), including revolving loans in an aggregate principal amount of $350 million available to Canadian borrowers and U.S. borrowers (the "ABL Credit Facility"). Up to $250 million of the revolving loan facility is available for the issuance of letters of credit, subject to certain conditions including issuing lender participation. Extensions of credit under the ABL Credit Facility are limited by a borrowing base calculated periodically based on specified percentages of the value of eligible rental equipment, eligible service vehicles, eligible spare parts and merchandise, eligible accounts receivable, and eligible unbilled accounts subject to certain reserves and other adjustments. Subject to the satisfaction of certain conditions and limitations, the ABL Credit Facility allows for the addition of incremental revolving and/or term loan commitments. In addition, the ABL Credit Facility permits Herc to increase the amount of commitments under the ABL Credit Facility with the consent of each lender providing an additional commitment, subject to satisfaction of certain conditions. Accounts Receivable Securitization Facility In September 2018, the Company entered into an accounts receivable securitization facility (the "AR Facility") with aggregate commitments of $175 million that matures on September 16, 2020. In connection with the AR Facility, Herc and one of its wholly-owned subsidiaries sell their accounts receivables on an ongoing basis to Herc Receivables U.S. LLC, a wholly-owned special-purpose entity (the "SPE"). The SPE's sole business consists of the purchase by the SPE of accounts receivable from Herc and the Herc subsidiary seller and borrowing by the SPE against the eligible accounts receivable from the lenders under the facility. The borrowings are secured by liens on the accounts receivable and other assets of the SPE. Collections on the accounts receivable are used to service the borrowings. The SPE is a separate legal entity which is consolidated in the Company's financial statements. The SPE assets are owned by the SPE and are not available to settle the obligations of the Company or any of its other subsidiaries. Herc is the servicer of the accounts receivable under the AR Facility. At September 30, 2018 , $175.0 million was outstanding under the AR Facility, representing net cash proceeds received from the lenders. The agreements governing the AR Facility contain restrictions and covenants which include limitations applicable to Herc, the Herc subsidiary seller and the SPE on the creation of certain liens, and restrictions and covenants which include limitations applicable to the SPE on the making of certain restricted payments, and limitations applicable to Herc and the SPE with respect to certain corporate acts such as mergers, consolidations and the sale of substantially all assets, with certain exceptions. The Company was in compliance with all such covenants as of September 30, 2018 . The financing agreement with the lenders provides for customary events of default (subject to customary exceptions, thresholds and grace periods) including, without limitation, failure to perform covenants, ineffectiveness of transaction documents, invalidity of security interests or failure to cooperate in the administrative agent's assumption of control of accounts, material inaccuracy of representations or warranties, failure of certain ratios related to the accounts receivables, specified cross default and cross acceleration to other material indebtedness, certain bankruptcy events, certain ERISA events, material judgments, material adverse effect and change in control. All of the obligations of the Herc subsidiary seller and the servicer and certain indemnification obligations of the SPE under the agreements governing the AR Facility are guaranteed by Herc pursuant to a performance guarantee. Other Borrowings The Company's subsidiary in China has uncommitted credit agreements with a bank for up to the aggregate principal amount of $10.0 million . Interest accrues on the loans drawn under these facilities at a rate of 110% of the prevailing base lending rates published by People's Bank of China and is payable quarterly. As of September 30, 2018 , the Company had short-term borrowings under these facilities totaling $6.3 million . Borrowing Capacity and Availability After outstanding borrowings, the following was available to the Company under the ABL Credit Facility and AR Facility as of September 30, 2018 (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 546.7 $ 546.7 AR Facility — — Total $ 546.7 $ 546.7 In addition, as of September 30, 2018 , the Company's subsidiary in China had uncommitted credit facilities of which $3.7 million was available for borrowing. Letters of Credit As of September 30, 2018 , $25.5 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $224.5 million available under the letter of credit facility sublimit, subject to borrowing base restrictions. |
Financing Obligations
Financing Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Financing Obligations | Financing Obligations In October 2017, Herc consummated a sale-leaseback transaction pursuant to which it sold 42 of its properties located in the U.S. for gross proceeds of approximately $119.5 million , and entered into a master lease agreement pursuant to which it has continued operations at those properties as a tenant. The triple net lease agreement has an initial term of 20 years, subject to extension, at Herc's option, for up to five additional periods of five years each. The sale of the properties did not qualify for sale-leaseback accounting due to continuing involvement with the properties. Therefore, the book value of the buildings and land remains on the Company's condensed consolidated balance sheet. The Company's financing obligations consist of the following (in millions): Weighted Average Effective Interest Rate at September 30, 2018 Maturity September 30, 2018 December 31, 2017 Financing obligations 4.62% 2037 $ 116.2 $ 118.2 Unamortized financing issuance costs (2.5 ) (2.6 ) Total financing obligations 113.7 115.6 Less: Current maturities of financing obligations (2.8 ) (2.7 ) Financing obligations, net $ 110.9 $ 112.9 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit was $1.0 million and $5.3 million for the three and nine months ended September 30, 2018, respectively, which were primarily driven by the level of pre-tax income, which was offset by discrete items related to the revision of the estimated one-time transition tax on earnings of certain foreign subsidiaries, non-deductible expenses, foreign taxes and valuation allowances recorded on losses generated by certain foreign loss jurisdictions. The effective tax rate for the 2018 fiscal year is expected to be approximately 2.0% . Tax Cuts and Jobs Act The 2017 Tax Act was enacted in December 2017 which reduced the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The Company is following the provisions of Staff Accounting Bulletin No. 118 ("SAB 118"), which was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. As of December 31, 2017, the Company determined a reasonable estimate of (i) the effects on existing deferred tax balances and (ii) the one-time transition tax. The Company recognized a provisional income tax benefit of $207.1 million in the year ended December 31, 2017 associated with these items that it reasonably estimated. During the three months ended September 30, 2018, the Company reduced its estimate of the one-time transition tax by $24.5 million , resulting in a net $14.8 million benefit after consideration of the Company's net operating loss carryforwards. The Company is continuing to collect and analyze detailed information about the earnings and profits of its non-U.S. subsidiaries, the amounts which could be repatriated, the foreign taxes which may be incurred on repatriation, and the associated impact of these items under the 2017 Tax Act. The Company may record further adjustments to refine those estimates during the fourth quarter of 2018, as additional analysis is completed. The 2017 Tax Act subjects U.S. shareholders to a tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. Entities can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. Given the complexity of the GILTI provisions, the Company is still evaluating the tax impact and has not yet made the accounting policy election. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in the accumulated other comprehensive income (loss) balance by component (net of tax) for the nine months ended September 30, 2018 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Unrealized Gains on Hedging Instruments Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ (13.5 ) $ 1.3 $ (86.4 ) $ (98.6 ) Other comprehensive income (loss) before reclassification — 2.4 (5.6 ) (3.2 ) Amounts reclassified from accumulated other comprehensive loss 0.6 — — 0.6 Net current period other comprehensive income (loss) 0.6 2.4 (5.6 ) (2.6 ) Balance at September 30, 2018 $ (12.9 ) $ 3.7 $ (92.0 ) $ (101.2 ) Amounts reclassified from accumulated other comprehensive income (loss) to net loss were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, Pension and other postretirement benefit plans Statement of Operations Caption 2018 2017 2018 2017 Amortization of actuarial losses Selling, general and administrative $ 0.3 $ 0.2 $ 0.8 $ 1.1 Tax benefit Income tax benefit (0.1 ) — (0.2 ) (0.4 ) Total reclassifications for the period $ 0.2 $ 0.2 $ 0.6 $ 0.7 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time the Company is a party to various legal proceedings. Summarized below are the most significant legal proceedings to which the Company is a party. In re Hertz Global Holdings, Inc. Securities Litigation - In November 2013, a putative shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Hertz Holdings and certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleged that Hertz Holdings made material misrepresentations and/or omission of material fact in its public disclosures during the period from February 25, 2013 through November 4, 2013, in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder. The complaint sought unspecified monetary damages on behalf of the purported class and an award of costs and expenses, including counsel fees and expert fees. In June 2014, Hertz Holdings moved to dismiss the amended complaint. In October 2014, the court granted Hertz Holdings’ motion to dismiss without prejudice, allowing the plaintiff to amend the complaint a second time. In November 2014, plaintiff filed a second amended complaint which shortened the putative class period and made allegations that were not substantively very different than the allegations in the prior complaint. In early 2015, Hertz Holdings moved to dismiss the second amended complaint. In July 2015, the court granted Hertz Holdings’ motion to dismiss without prejudice, allowing plaintiff to file a third amended complaint. In August 2015, plaintiff filed a third amended complaint which included additional allegations, named additional then-current and former officers as defendants and expanded the putative class period to extend from February 14, 2013 to July 16, 2015. In November 2015, Hertz Holdings moved to dismiss the third amended complaint. The plaintiff then sought leave to add a new plaintiff because of challenges to the standing of the first plaintiff. The court granted plaintiff leave to file a fourth amended complaint to add the new plaintiff, and the new complaint was filed on March 1, 2016. Hertz Holdings and the individual defendants moved to dismiss the fourth amended complaint with prejudice on March 24, 2016. In April 2017, the court granted Hertz Holdings' and the individual defendants' motions to dismiss and dismissed the action with prejudice. In May 2017, plaintiff filed a notice of appeal and, in June 2018, oral argument was conducted before the U.S. Court of Appeals for the Third Circuit. In September 2018, the court affirmed the dismissal of the action with prejudice. Governmental Investigations - In June 2014, Hertz Holdings was advised by the staff of the New York Regional Office of the SEC that it is investigating the events disclosed in certain of Hertz Holdings’ filings with the SEC. In addition, starting in June 2016, Hertz Holdings and New Hertz have had communications with the United States Attorney’s Office for the District of New Jersey regarding the same or similar events. New Hertz is responsible for managing these matters. The investigations and communications generally involve the restatements included in Hertz Holdings’ 2014 Form 10-K and related accounting for prior periods. The Company has and intends to continue to cooperate with all governmental requests related to the foregoing. New Hertz is engaged in discussions with the enforcement staff of the New York office of the SEC (“Staff”) to resolve certain matters under investigation. Any proposed settlement that might result from discussions with Staff would be subject to additional reviews and approvals, including acceptance and authorization by the SEC. The Company cannot predict the ultimate timing or the final terms of a possible settlement, including any settlement amount. Given the uncertainties associated with the matters under discussion and the immateriality to the Company of the Company’s share of the minimum amount of probable loss based on current circumstances, the Company has not accrued a loss contingency at this time. However, it is possible that an adverse outcome with respect to the restatement investigations could result in losses that could be material to the Company’s consolidated financial condition, results of operations or cash flows in any particular reporting period. In addition, the Company is subject to a number of claims and proceedings that generally arise in the ordinary conduct of its business. These matters include, but are not limited to, claims arising from the operation of rented equipment and workers' compensation claims. The Company does not believe that the liabilities arising from such ordinary course claims and proceedings will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. The Company has established reserves for matters where the Company believes the losses are probable and can be reasonably estimated. For matters where a reserve has not been established, including certain of those described above, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and there can be no assurance as to the outcome of the individual litigated matters. It is possible that certain of the actions, claims, inquiries or proceedings, including those discussed above, could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period. Off-Balance Sheet Commitments Indemnification Obligations In the ordinary course of business, the Company executes contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business or assets or a financial transaction. These indemnification obligations might include claims relating to the following: accuracy of representations; compliance with covenants and agreements by the Company or third parties; environmental matters; intellectual property rights; governmental regulations; employment-related matters; customer, supplier and other commercial contractual relationships; condition of assets; and financial or other matters. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third party claim. The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable. The types of indemnification obligations for which payments are possible include the following: The Spin-Off In connection with the Spin-Off, pursuant to the separation and distribution agreement (as discussed in Note 14 , " Arrangements with New Hertz "), the Company has assumed the liability for, and control of, all pending and threatened legal matters related to its equipment rental business and related assets, as well as assumed or retained liabilities, and will indemnify New Hertz for any liability arising out of or resulting from such assumed legal matters. The separation and distribution agreement also provides for certain liabilities to be shared by the parties. The Company is responsible for a portion of these shared liabilities (typically 15% ), as set forth in that agreement. New Hertz is responsible for managing the settlement or other disposition of such shared liabilities. Pursuant to the tax matters agreement, the Company has agreed to indemnify New Hertz for any resulting taxes and related losses if the Company takes or fails to take any action (or permits any of its affiliates to take or fail to take any action) that causes the Spin-Off and related transactions to be taxable, or if there is an acquisition of the equity securities or assets of the Company or of any member of the Company’s group that causes the Spin-Off and related transactions to be taxable. Environmental The Company has indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held responsible could be substantial. The probable expenses that the Company expects to incur for such matters have been accrued, and those expenses are reflected in the Company's consolidated financial statements. As of September 30, 2018 and December 31, 2017 , the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in the Company's consolidated balance sheets in "Accrued liabilities" were $0.1 million . The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up activities, and the estimated cost to implement remediation actions, including on-going maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites. For many sites, the remediation costs and other damages for which the Company ultimately may be responsible cannot be reasonably estimated because of uncertainties with respect to factors such as the Company's connection to the site, the materials there, the involvement of other potentially responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the technologies to be required and the extent, duration, and success of remediation). |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments The Company established risk management policies and procedures, which seek to reduce the Company’s risk exposure to fluctuations in foreign currency exchange rates and interest rates. However, there can be no assurance that these policies and procedures will be successful. Although the instruments utilized involve varying degrees of credit, market and interest risk, the counterparties to the agreements are expected to perform fully under the terms of the agreements. The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, in the event of default under the Company’s master derivative agreements, the non-defaulting party has the option to set-off any amounts owed with regard to open derivative positions. Foreign Currency Exchange Rate Risk The Company’s objective in managing exposure to foreign currency fluctuations is to limit the exposure of certain cash flows and earnings to foreign currency exchange rate changes through the use of various derivative contracts. The Company experiences foreign currency risks in its global operations as a result of various factors, including intercompany local currency denominated loans, rental operations in various currencies and purchasing fleet in various currencies. Interest Rate Swap Arrangement In March 2017, the Company entered into a three -year LIBOR-based interest rate swap arrangement on a portion of its outstanding ABL Credit Facility. The aggregate amount of the swap is equal to a portion of the U.S. dollar principal amount of the ABL Credit Facility and the payment dates of the swap coincide with the interest payment dates of the ABL Credit Facility. The swap contract provides for the Company to pay a fixed interest rate and receive a floating rate. The variable interest rate resets monthly. The swap has been accounted for as cash flow hedge of a portion of the ABL Credit Facility. The following table summarizes the outstanding interest rate swap arrangement as of September 30, 2018 (dollars in millions): Aggregate Notional Amount Receive Rate Receive Rate as of September 30, 2018 Pay Rate ABL Credit Facility $ 350.0 1 month LIBOR + 1.75% 4.0 % 3.5 % The following table summarizes the estimated fair value of the Company's financial instruments (in millions): Fair Value of Financial Instruments Other Long-Term Assets Accrued Liabilities September 30, December 31, September 30, December 31, Derivatives Designated as Hedging Instruments Interest rate swap $ 5.3 $ 2.1 $ — $ — The following table summarizes the gains and losses on derivative instruments for the periods indicated. Gains and losses recognized on foreign currency forward contracts and the effective portion of interest rate swaps are included in the condensed consolidated statements of operations together with the corresponding offsetting gains and losses on the underlying hedged transactions. All gains and losses recognized are included in "Selling, general and administrative" in the condensed consolidated statements of operations (in millions). Gain (Loss) Recognized Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivatives Not Designated as Hedging Instruments Foreign currency forward contracts $ — $ (0.4 ) $ 0.2 $ (4.0 ) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair value of accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments. Cash Equivalents Cash equivalents, when held, primarily consist of money market accounts which are classified as Level 1 assets which the Company measures at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. The Company had no cash equivalents at September 30, 2018 or December 31, 2017 . Financial Instruments The fair value of the Company's financial instruments as of September 30, 2018 and December 31, 2017 is shown in Note 10 , " Financial Instruments ." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets. Debt Obligations The fair values of the Company's ABL Credit Facility, AR Facility, capital leases and other borrowings approximated their book values as of September 30, 2018 and December 31, 2017. The fair value of the Company's Notes are estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs) (in millions). September 30, 2018 December 31, 2017 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value Notes $ 864.5 $ 921.9 $ 988.0 $ 1,074.6 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share has been computed based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share has been computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings (loss) per share (in millions, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic and diluted earnings (loss) per share: Numerator: Net income (loss), basic and diluted $ 46.2 $ 12.8 $ 35.8 $ (54.0 ) Denominator: Basic weighted average common shares 28.5 28.3 28.4 28.3 Stock options, RSUs and PSUs 0.4 0.3 0.5 — Weighted average shares used to calculate diluted income (loss) per share 28.9 28.6 28.9 28.3 Earnings (loss) per share: Basic $ 1.62 $ 0.45 $ 1.26 $ (1.91 ) Diluted $ 1.60 $ 0.45 $ 1.24 $ (1.91 ) Antidilutive stock options, RSUs and PSUs 0.2 0.4 0.2 0.7 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Agreements with Carl C. Icahn The Company is subject to the Nomination and Standstill Agreement, dated September 15, 2014 (the "Nomination and Standstill Agreement"), with Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P. Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn Capital LP, Icahn Onshore LP, Icahn Offshore LP, Beckton Corp., Vincent J. Intrieri, Samuel Merksamer and Daniel A. Ninivaggi (collectively, the "Original Icahn Group"). In connection with their appointments or nomination, as applicable, to the Company’s board of directors (the "Board"), each of Courtney Mather, Louis J. Pastor, Stephen A. Mongillo and Nicholas F. Graziano (collectively, the "Icahn Designees," and, together with the Original Icahn Group, the "Icahn Group") executed a Joinder Agreement agreeing to become bound as a party to the terms and conditions of the Nomination and Standstill Agreement (such Joinder Agreements, together with the Nomination and Standstill Agreement, are collectively referred to herein as the "Icahn Agreements"). Pursuant to the Icahn Agreements, Messrs. Mather, Pastor and Mongillo were appointed to the Company’s Board effective June 30, 2016 and Mr. Graziano was elected to the Board at the Company's 2018 annual meeting of stockholders in place of Mr. Mongillo. Pursuant to the Icahn Agreements, so long as an Icahn Designee is a member of the Board, the Board will not be expanded beyond its current size of 11 members without approval from the Icahn Designees then on the Board. In addition, pursuant to the Icahn Agreements, subject to certain restrictions and requirements, the Icahn Group will have certain replacement rights in the event an Icahn Designee resigns or is otherwise unable to serve as a director (other than as a result of not being nominated by the Company for an annual meeting). In addition, until the date that no Icahn Designee is a member of the Board (or otherwise deemed to be on the Board pursuant to the terms of the Icahn Agreements) (the “Board Representation Period”), the Icahn Group agrees to vote all of its shares of the Company’s common stock in favor of the election of all of the Company’s director nominees at each annual or special meeting of the Company’s stockholders, and, subject to limited exceptions, the Icahn Group further agrees to (i) adhere to certain standstill obligations, including the obligation to not solicit proxies or consents or influence others with respect to the same, and (ii) not acquire or otherwise beneficially own more than 20% of the Company’s outstanding voting securities. Under the Icahn Agreements, if the Icahn Group ceases to hold a “net long position,” as defined in the Nomination and Standstill Agreement, in at least 1,900,000 shares of the Company’s common stock, the Icahn Group will cause one Icahn Designee to resign from the Board; if the Icahn Group’s holdings are further reduced to specified levels, additional Icahn Designees are required to resign. In addition, pursuant to the Icahn Agreements, the Company entered into a registration rights agreement, effective June 30, 2016 (the "Registration Rights Agreement"), with High River Limited Partnership, Icahn Partners LP and Icahn Partners Master Fund LP, on behalf of any person who is a member of the "Icahn group" (as such term is defined therein) who owns applicable securities at the relevant time and is or has become a party to the Registration Rights Agreement. The Registration Rights Agreement provides for customary demand and piggyback registration rights and obligations. Arrangements with New Hertz In connection with the Spin-Off, the Company entered into a separation and distribution agreement (the "Separation Agreement") with New Hertz. In connection therewith, the Company also entered into various other ancillary agreements with New Hertz to effect the Spin-Off and provide a framework for its relationship with New Hertz. The following summarizes some of the most significant agreements and relationships that Herc Holdings continues to have with New Hertz. Separation and Distribution Agreement The Separation Agreement sets forth the Company's agreements with New Hertz regarding the principal actions taken in connection with the Spin-Off. It also sets forth other agreements that govern aspects of the Company's relationship with New Hertz following the Spin-Off including (i) the manner in which legal matters and claims are allocated and certain liabilities are shared between the Company and New Hertz; (ii) other matters including transfers of assets and liabilities, treatment or termination of intercompany arrangements and releases of certain claims between the parties and their affiliates; (iii) mutual indemnification clauses; and (iv) allocation of Spin-Off expenses between the parties. Transition Services Agreement The Company entered into a transition services agreement ("TSA"), pursuant to which New Hertz or its affiliates provided, during the three and nine months ended September 30, 2018, specified services, primarily consisting of IT support, to the Company on a transitional basis to help ensure an orderly transition following the Spin-Off. Effective upon the migration of the Company’s financial systems from the New Hertz system to a stand-alone system in July 2018, the Company receives no further services from New Hertz under the TSA. During the three and nine months ended September 30, 2018, the Company incurred expenses of $0.6 million and $6.3 million , respectively, under the TSA which are included in "Direct operating" and "Selling, general and administrative" expenses in the Company's condensed consolidated statements of operations, compared to $4.2 million and $14.3 million for the same periods in 2017. Tax Matters Agreement The Company entered into a tax matters agreement (the "Tax Matters Agreement") with New Hertz that governs the parties' rights, responsibilities and obligations after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns. Employee Matters Agreement The Company and New Hertz entered into an employee matters agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation, benefit plans and programs and other related matters for current and former employees of the vehicle rental business and the equipment rental business. Intellectual Property Agreement The Company and New Hertz entered into an intellectual property agreement (the “Intellectual Property Agreement”) that provides for ownership, licensing and other arrangements regarding the trademarks and related intellectual property that New Hertz and the Company use in conducting their businesses. The Intellectual Property Agreement allocates ownership between New Hertz and the Company of all trademarks, domain names and certain copyrights that Hertz Holdings or its subsidiaries owned immediately prior to the Spin-Off. Real Estate Arrangements The Company and New Hertz entered into certain real estate lease agreements pursuant to which the Company leased certain office space from New Hertz through June 30, 2018 and New Hertz leased certain rental facilities space from the Company through April 30, 2018. Rent payments were negotiated based on comparable fair market rental rates. |
Arrangements With New Hertz
Arrangements With New Hertz | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Arrangements With New Hertz | Related Party Transactions Agreements with Carl C. Icahn The Company is subject to the Nomination and Standstill Agreement, dated September 15, 2014 (the "Nomination and Standstill Agreement"), with Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P. Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn Capital LP, Icahn Onshore LP, Icahn Offshore LP, Beckton Corp., Vincent J. Intrieri, Samuel Merksamer and Daniel A. Ninivaggi (collectively, the "Original Icahn Group"). In connection with their appointments or nomination, as applicable, to the Company’s board of directors (the "Board"), each of Courtney Mather, Louis J. Pastor, Stephen A. Mongillo and Nicholas F. Graziano (collectively, the "Icahn Designees," and, together with the Original Icahn Group, the "Icahn Group") executed a Joinder Agreement agreeing to become bound as a party to the terms and conditions of the Nomination and Standstill Agreement (such Joinder Agreements, together with the Nomination and Standstill Agreement, are collectively referred to herein as the "Icahn Agreements"). Pursuant to the Icahn Agreements, Messrs. Mather, Pastor and Mongillo were appointed to the Company’s Board effective June 30, 2016 and Mr. Graziano was elected to the Board at the Company's 2018 annual meeting of stockholders in place of Mr. Mongillo. Pursuant to the Icahn Agreements, so long as an Icahn Designee is a member of the Board, the Board will not be expanded beyond its current size of 11 members without approval from the Icahn Designees then on the Board. In addition, pursuant to the Icahn Agreements, subject to certain restrictions and requirements, the Icahn Group will have certain replacement rights in the event an Icahn Designee resigns or is otherwise unable to serve as a director (other than as a result of not being nominated by the Company for an annual meeting). In addition, until the date that no Icahn Designee is a member of the Board (or otherwise deemed to be on the Board pursuant to the terms of the Icahn Agreements) (the “Board Representation Period”), the Icahn Group agrees to vote all of its shares of the Company’s common stock in favor of the election of all of the Company’s director nominees at each annual or special meeting of the Company’s stockholders, and, subject to limited exceptions, the Icahn Group further agrees to (i) adhere to certain standstill obligations, including the obligation to not solicit proxies or consents or influence others with respect to the same, and (ii) not acquire or otherwise beneficially own more than 20% of the Company’s outstanding voting securities. Under the Icahn Agreements, if the Icahn Group ceases to hold a “net long position,” as defined in the Nomination and Standstill Agreement, in at least 1,900,000 shares of the Company’s common stock, the Icahn Group will cause one Icahn Designee to resign from the Board; if the Icahn Group’s holdings are further reduced to specified levels, additional Icahn Designees are required to resign. In addition, pursuant to the Icahn Agreements, the Company entered into a registration rights agreement, effective June 30, 2016 (the "Registration Rights Agreement"), with High River Limited Partnership, Icahn Partners LP and Icahn Partners Master Fund LP, on behalf of any person who is a member of the "Icahn group" (as such term is defined therein) who owns applicable securities at the relevant time and is or has become a party to the Registration Rights Agreement. The Registration Rights Agreement provides for customary demand and piggyback registration rights and obligations. Arrangements with New Hertz In connection with the Spin-Off, the Company entered into a separation and distribution agreement (the "Separation Agreement") with New Hertz. In connection therewith, the Company also entered into various other ancillary agreements with New Hertz to effect the Spin-Off and provide a framework for its relationship with New Hertz. The following summarizes some of the most significant agreements and relationships that Herc Holdings continues to have with New Hertz. Separation and Distribution Agreement The Separation Agreement sets forth the Company's agreements with New Hertz regarding the principal actions taken in connection with the Spin-Off. It also sets forth other agreements that govern aspects of the Company's relationship with New Hertz following the Spin-Off including (i) the manner in which legal matters and claims are allocated and certain liabilities are shared between the Company and New Hertz; (ii) other matters including transfers of assets and liabilities, treatment or termination of intercompany arrangements and releases of certain claims between the parties and their affiliates; (iii) mutual indemnification clauses; and (iv) allocation of Spin-Off expenses between the parties. Transition Services Agreement The Company entered into a transition services agreement ("TSA"), pursuant to which New Hertz or its affiliates provided, during the three and nine months ended September 30, 2018, specified services, primarily consisting of IT support, to the Company on a transitional basis to help ensure an orderly transition following the Spin-Off. Effective upon the migration of the Company’s financial systems from the New Hertz system to a stand-alone system in July 2018, the Company receives no further services from New Hertz under the TSA. During the three and nine months ended September 30, 2018, the Company incurred expenses of $0.6 million and $6.3 million , respectively, under the TSA which are included in "Direct operating" and "Selling, general and administrative" expenses in the Company's condensed consolidated statements of operations, compared to $4.2 million and $14.3 million for the same periods in 2017. Tax Matters Agreement The Company entered into a tax matters agreement (the "Tax Matters Agreement") with New Hertz that governs the parties' rights, responsibilities and obligations after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns. Employee Matters Agreement The Company and New Hertz entered into an employee matters agreement to allocate liabilities and responsibilities relating to employment matters, employee compensation, benefit plans and programs and other related matters for current and former employees of the vehicle rental business and the equipment rental business. Intellectual Property Agreement The Company and New Hertz entered into an intellectual property agreement (the “Intellectual Property Agreement”) that provides for ownership, licensing and other arrangements regarding the trademarks and related intellectual property that New Hertz and the Company use in conducting their businesses. The Intellectual Property Agreement allocates ownership between New Hertz and the Company of all trademarks, domain names and certain copyrights that Hertz Holdings or its subsidiaries owned immediately prior to the Spin-Off. Real Estate Arrangements The Company and New Hertz entered into certain real estate lease agreements pursuant to which the Company leased certain office space from New Hertz through June 30, 2018 and New Hertz leased certain rental facilities space from the Company through April 30, 2018. Rent payments were negotiated based on comparable fair market rental rates. |
Basis of Presentation and Rec_2
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company prepares its condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements, however, these condensed consolidated financial statements do not include all of the disclosures required for complete annual financial statements and, accordingly, certain information, footnotes and disclosures normally included in annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with Securities and Exchange Commission ("SEC") rules and regulations. The Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, the condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 28, 2018. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the condensed consolidated financial statements include allowance for accounts receivable, depreciation of rental equipment, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and intangible assets including goodwill and trade name, pension and postretirement benefits, valuation of stock-based compensation, reserves for litigation and other contingencies, accounting for income taxes, among others. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Herc Holdings and its wholly owned subsidiaries. In the event that the Company is a primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. The Company accounts for its investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance that replaced existing revenue recognition guidance in U.S. GAAP. The new guidance requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted the guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The Company did not record any amount to the opening balance of retained earnings as of January 1, 2018 as the cumulative impact of adopting the guidance was not material. The comparative financial statement information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of the guidance had no material impact on the Company’s consolidated balance sheet as of January 1, 2018. The Company's accounting for equipment rental revenue is primarily outside the scope of this new revenue guidance and will be evaluated under the new lease guidance which is described further under the subheading "Leases" below. Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued guidance to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. The Company adopted this guidance on January 1, 2018 in accordance with the effective date and has amended its statement of cash flows for the nine months ended September 30, 2017 by reclassifying $3.7 million of debt extinguishment costs from cash used in operating activities to cash used in financing activities. Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued guidance requiring an entity to recognize upon transfer the income tax consequences of an intra-entity transfer of an asset other than inventory, eliminating the current recognition exception. Two common examples of assets included in the scope of this standard are intellectual property and property, plant and equipment. The Company adopted this guidance on January 1, 2018 in accordance with the effective date. Adoption of this guidance did not have a significant impact on the Company's financial position, results of operations or cash flows. Statement of Cash Flows: Restricted Cash In November 2016, the FASB issued guidance requiring restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. The Company adopted this guidance on January 1, 2018 in accordance with the effective date and has amended its statement of cash flows for the nine months ended September 30, 2017 accordingly. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs In March 2017, the FASB issued guidance on the presentation of net periodic pension and postretirement benefit costs in the income statement and on the components eligible for capitalization. The guidance requires the reporting of the service cost component of the net periodic benefit costs in the same income statement line item as other components of net periodic costs arising from services rendered by an employee during the period, and that non-service-cost components be presented in the income statement separately from the service cost components and outside a subtotal of income from operations. The guidance also allows for the capitalization of the service cost components, when applicable. The Company adopted this guidance on January 1, 2018 in accordance with the effective date. Adoption of this guidance resulted in an immaterial reclassification of costs from "Direct operating" and "Selling, general and administrative" expense into "Other income, net" in the Company's statement of operations. Compensation - Stock Compensation In May 2017, the FASB issued guidance pursuant to which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the updated guidance, a modification is defined as a change in the terms or conditions of a share-based payment award, and an entity should account for the effects of a modification unless all of the following are met: 1. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation techniques that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance requires prospective application to an award modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018 in accordance with the effective date and will apply the guidance to any future changes to the terms or conditions of its share-based payment awards. Not Yet Adopted Leases In February 2016, the FASB issued guidance that replaces the existing lease guidance. The new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods using a modified retrospective transition approach. The Company expects to adopt this guidance on its effective date of January 1, 2019 and is currently in the process of assessing the potential impact this guidance may have on its financial position, results of operations and cash flows, including which of its existing lease arrangements will be impacted by the new guidance and whether other arrangements not currently classified as leases may become subject to the guidance. The Company plans to take advantage of the transition package of practical expedients permitted within the new standard which, among other things, allows the historical lease classification to be carried forward. Additionally, the Company is implementing a lease management system to assist in the accounting and is evaluating additional changes to its processes and internal controls to ensure the new reporting and disclosure requirements are met upon adoption. Upon adoption, the Company currently expects to recognize additional lease liabilities totaling between $165.0 million and $185.0 million , with corresponding ROU assets. The liabilities will be calculated as the present value of the remaining minimum rental payments for existing operating leases. This estimate could change due to factors including future lease versus buy decisions and acquisitions and dispositions of assets under lease arrangements. Additionally, as discussed in Note 3 , " Revenue Recognition ," most of the Company's equipment rental revenues will be accounted for under the current lease accounting standard, Accounting Standards Codification (“ASC”) Topic 840, Leases, ("Topic 840") until the adoption of the new lease accounting standard ("Topic 842"). While the Company's review of the equipment rental revenue under Topic 842 is ongoing, the Company has preliminarily concluded that no significant changes are expected to the accounting for most of its equipment rental revenues upon adoption of Topic 842. Income Statement - Reporting Comprehensive Income In February 2018, the FASB issued guidance that allows reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") that would otherwise be stranded in accumulated other comprehensive income. This guidance is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Prospective Adoption of New Accounting Pronouncements | The following tables summarize the applicable accounting guidance for the Company’s revenues for the three and nine months ended September 30, 2018 and 2017, respectively (in millions): Three Months Ended September 30, 2018 2017 Topic 840 Topic 606 Total Topic 840 Topic 605 Total Revenues: Equipment rental $ 404.8 $ — $ 404.8 $ 375.3 $ — $ 375.3 Other rental revenue: Delivery and pick-up — 25.5 25.5 — 21.4 21.4 Other 18.7 — 18.7 16.4 — 16.4 Total other rental revenues 18.7 25.5 44.2 16.4 21.4 37.8 Total equipment rentals 423.5 25.5 449.0 391.7 21.4 413.1 Sales of rental equipment — 50.1 50.1 — 27.7 27.7 Sales of new equipment, parts and supplies — 14.2 14.2 — 13.9 13.9 Service and other revenues — 2.9 2.9 — 2.9 2.9 Total revenues $ 423.5 $ 92.7 $ 516.2 $ 391.7 $ 65.9 $ 457.6 Nine Months Ended September 30, 2018 2017 Topic 840 Topic 606 Total Topic 840 Topic 605 Total Revenues: Equipment rental $ 1,101.6 $ — $ 1,101.6 $ 993.9 $ — $ 993.9 Other rental revenue: Delivery and pick-up — 63.9 63.9 — 54.3 54.3 Other 45.1 — 45.1 36.3 — 36.3 Total other rental revenues 45.1 63.9 109.0 36.3 54.3 90.6 Total equipment rentals 1,146.7 63.9 1,210.6 1,030.2 54.3 1,084.5 Sales of rental equipment — 175.6 175.6 — 128.5 128.5 Sales of new equipment, parts and supplies — 36.4 36.4 — 40.3 40.3 Service and other revenues — 10.4 10.4 — 9.5 9.5 Total revenues $ 1,146.7 $ 286.3 $ 1,433.0 $ 1,030.2 $ 232.6 $ 1,262.8 |
Disaggregation of Revenue | Revenues recorded for each category are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sales of rental equipment $ 50.1 $ 27.7 $ 175.6 $ 128.5 Sales of new equipment 5.1 7.4 15.5 20.8 Sales of parts and supplies 9.1 6.5 20.9 19.5 Total $ 64.3 $ 41.6 $ 212.0 $ 168.8 |
Revenue Earning Equipment (Tabl
Revenue Earning Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property Subject to or Available for Operating Lease, Net [Abstract] | |
Components of Revenue Earning Equipment | Rental equipment consists of the following (in millions): September 30, 2018 December 31, 2017 Rental equipment $ 4,012.9 $ 3,757.2 Less: Accumulated depreciation (1,392.1 ) (1,382.6 ) Rental equipment, net $ 2,620.8 $ 2,374.6 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at September 30, 2018 Weighted Average Stated Interest Rate at September 30, 2018 Fixed or Floating Interest Rate Maturity September 30, December 31, Senior Secured Second Priority Notes 2022 Notes 7.88% 7.50% Fixed 2022 $ 427.0 $ 488.0 2024 Notes 8.06% 7.75% Fixed 2024 437.5 500.0 Other Debt ABL Credit Facility N/A 3.90% Floating 2021 1,177.8 1,130.0 AR Facility N/A 2.87% Floating 2020 175.0 — Capital leases 4.15% N/A Fixed 2018-2022 42.5 53.7 Other borrowings N/A 4.79% Floating 2018 6.3 2.6 Unamortized Debt Issuance Costs (a) (11.0 ) (14.5 ) Total debt 2,255.1 2,159.8 Less: Current maturities of long-term debt (26.1 ) (22.7 ) Long-term debt, net $ 2,229.0 $ 2,137.1 (a) Unamortized debt issuance costs totaling $11.4 million and $13.3 million related to the ABL Credit Facility and, as of September 30, 2018, the AR Facility (as each is defined below) are included in "Other long-term assets" in the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 , respectively. |
Borrowing Capacity and Availability on Line of Credit | After outstanding borrowings, the following was available to the Company under the ABL Credit Facility and AR Facility as of September 30, 2018 (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 546.7 $ 546.7 AR Facility — — Total $ 546.7 $ 546.7 |
Financing Obligations (Tables)
Financing Obligations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Capital Leases in Financial Statements of Lessee Disclosure | The Company's financing obligations consist of the following (in millions): Weighted Average Effective Interest Rate at September 30, 2018 Maturity September 30, 2018 December 31, 2017 Financing obligations 4.62% 2037 $ 116.2 $ 118.2 Unamortized financing issuance costs (2.5 ) (2.6 ) Total financing obligations 113.7 115.6 Less: Current maturities of financing obligations (2.8 ) (2.7 ) Financing obligations, net $ 110.9 $ 112.9 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the accumulated other comprehensive income (loss) balance by component (net of tax) for the nine months ended September 30, 2018 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Unrealized Gains on Hedging Instruments Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2017 $ (13.5 ) $ 1.3 $ (86.4 ) $ (98.6 ) Other comprehensive income (loss) before reclassification — 2.4 (5.6 ) (3.2 ) Amounts reclassified from accumulated other comprehensive loss 0.6 — — 0.6 Net current period other comprehensive income (loss) 0.6 2.4 (5.6 ) (2.6 ) Balance at September 30, 2018 $ (12.9 ) $ 3.7 $ (92.0 ) $ (101.2 ) |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from accumulated other comprehensive income (loss) to net loss were as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, Pension and other postretirement benefit plans Statement of Operations Caption 2018 2017 2018 2017 Amortization of actuarial losses Selling, general and administrative $ 0.3 $ 0.2 $ 0.8 $ 1.1 Tax benefit Income tax benefit (0.1 ) — (0.2 ) (0.4 ) Total reclassifications for the period $ 0.2 $ 0.2 $ 0.6 $ 0.7 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Interest Rate Swap Arrangement | The following table summarizes the outstanding interest rate swap arrangement as of September 30, 2018 (dollars in millions): Aggregate Notional Amount Receive Rate Receive Rate as of September 30, 2018 Pay Rate ABL Credit Facility $ 350.0 1 month LIBOR + 1.75% 4.0 % 3.5 % |
Estimated Fair Value of Financial Instruments | The following table summarizes the estimated fair value of the Company's financial instruments (in millions): Fair Value of Financial Instruments Other Long-Term Assets Accrued Liabilities September 30, December 31, September 30, December 31, Derivatives Designated as Hedging Instruments Interest rate swap $ 5.3 $ 2.1 $ — $ — |
Derivative Instruments, Gain (Loss) | The following table summarizes the gains and losses on derivative instruments for the periods indicated. Gains and losses recognized on foreign currency forward contracts and the effective portion of interest rate swaps are included in the condensed consolidated statements of operations together with the corresponding offsetting gains and losses on the underlying hedged transactions. All gains and losses recognized are included in "Selling, general and administrative" in the condensed consolidated statements of operations (in millions). Gain (Loss) Recognized Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivatives Not Designated as Hedging Instruments Foreign currency forward contracts $ — $ (0.4 ) $ 0.2 $ (4.0 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Debt | The fair value of the Company's Notes are estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs) (in millions). September 30, 2018 December 31, 2017 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value Notes $ 864.5 $ 921.9 $ 988.0 $ 1,074.6 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings (loss) per share (in millions, except per share data). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic and diluted earnings (loss) per share: Numerator: Net income (loss), basic and diluted $ 46.2 $ 12.8 $ 35.8 $ (54.0 ) Denominator: Basic weighted average common shares 28.5 28.3 28.4 28.3 Stock options, RSUs and PSUs 0.4 0.3 0.5 — Weighted average shares used to calculate diluted income (loss) per share 28.9 28.6 28.9 28.3 Earnings (loss) per share: Basic $ 1.62 $ 0.45 $ 1.26 $ (1.91 ) Diluted $ 1.60 $ 0.45 $ 1.24 $ (1.91 ) Antidilutive stock options, RSUs and PSUs 0.2 0.4 0.2 0.7 |
Background (Details)
Background (Details) | 9 Months Ended |
Sep. 30, 2018company_operated_branch | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company owned locations | 275 |
Basis of Presentation and Rec_3
Basis of Presentation and Recently Issued Accounting Pronouncements - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 375 | $ 253.6 |
Net cash provided by financing activities | 85.8 | 29.3 |
Accounting Standards Update 2016-15 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | 3.7 | |
Net cash provided by financing activities | $ (3.7) | |
Minimum [Member] | Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Liability | 165 | |
Maximum [Member] | Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating Lease, Liability | $ 185 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
United States | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 89.60% | 88.60% | 88.70% | 88.20% |
Accounting Standards Update 2014-09 | ||||
Concentration Risk [Line Items] | ||||
Accounts receivable | $ 19.6 | $ 19.6 |
Revenue Recognition - Applicabl
Revenue Recognition - Applicable Accounting Guidance for Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Equipment rental | $ 404.8 | $ 375.3 | $ 1,101.6 | $ 993.9 |
Total other rental revenues | 44.2 | 37.8 | 109 | 90.6 |
Equipment rental | 449 | 413.1 | 1,210.6 | 1,084.5 |
Sales of rental equipment | 50.1 | 27.7 | 175.6 | 128.5 |
Sales of new equipment, parts and supplies | 14.2 | 13.9 | 36.4 | 40.3 |
Service and other revenue | 2.9 | 2.9 | 10.4 | 9.5 |
Total revenues | 516.2 | 457.6 | 1,433 | 1,262.8 |
Topic 840 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Equipment rental | 404.8 | 375.3 | 1,101.6 | 993.9 |
Total other rental revenues | 18.7 | 16.4 | 45.1 | 36.3 |
Equipment rental | 423.5 | 391.7 | 1,146.7 | 1,030.2 |
Sales of rental equipment | 0 | 0 | 0 | 0 |
Sales of new equipment, parts and supplies | 0 | 0 | 0 | 0 |
Service and other revenue | 0 | 0 | 0 | 0 |
Total revenues | 423.5 | 391.7 | 1,146.7 | 1,030.2 |
Topic 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Equipment rental | 0 | 0 | 0 | 0 |
Total other rental revenues | 25.5 | 21.4 | 63.9 | 54.3 |
Equipment rental | 25.5 | 21.4 | 63.9 | 54.3 |
Sales of rental equipment | 50.1 | 27.7 | 175.6 | 128.5 |
Sales of new equipment, parts and supplies | 14.2 | 13.9 | 36.4 | 40.3 |
Service and other revenue | 2.9 | 2.9 | 10.4 | 9.5 |
Total revenues | 92.7 | 65.9 | 286.3 | 232.6 |
Delivery and Pick-up | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | 25.5 | 21.4 | 63.9 | 54.3 |
Delivery and Pick-up | Topic 840 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | 0 | 0 | 0 | 0 |
Delivery and Pick-up | Topic 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | 25.5 | 21.4 | 63.9 | 54.3 |
Other Revenue | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | 18.7 | 16.4 | 45.1 | 36.3 |
Other Revenue | Topic 840 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | 18.7 | 16.4 | 45.1 | 36.3 |
Other Revenue | Topic 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total other rental revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Revenue E
Revenue Recognition - Revenue Earning Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Sales of rental equipment | $ 50.1 | $ 27.7 | $ 175.6 | $ 128.5 |
Sales of new equipment | 5.1 | 7.4 | 15.5 | 20.8 |
Sales of parts and supplies | 9.1 | 6.5 | 20.9 | 19.5 |
Total | $ 64.3 | $ 41.6 | $ 212 | $ 168.8 |
Revenue Earning Equipment - Rev
Revenue Earning Equipment - Revenue Earning Equipment Components (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Property Subject to or Available for Operating Lease, Net [Abstract] | ||
Rental equipment | $ 4,012.9 | $ 3,757.2 |
Less: Accumulated depreciation | (1,392.1) | (1,382.6) |
Rental equipment, net | $ 2,620.8 | $ 2,374.6 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Costs | $ (11) | $ (14.5) |
Total debt | 2,255.1 | 2,159.8 |
Less: Current maturities of financing obligations | (26.1) | (22.7) |
Long-term debt, net | $ 2,229 | 2,137.1 |
Capital leases | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at September 30, 2018 | 4.62% | |
Debt, gross | $ 116.2 | 118.2 |
Less: Current maturities of financing obligations | $ (2.8) | (2.7) |
2022 Notes | Senior Secured Second Priority Notes | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at September 30, 2018 | 7.88% | |
Weighted Average Stated Interest Rate at September 30, 2018 | 7.50% | |
Debt, gross | $ 427 | 488 |
2024 Notes | Senior Secured Second Priority Notes | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at September 30, 2018 | 8.06% | |
Weighted Average Stated Interest Rate at September 30, 2018 | 7.75% | |
Debt, gross | $ 437.5 | 500 |
ABL Credit Facility | Line of Credit | Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted Average Stated Interest Rate at September 30, 2018 | 3.90% | |
Debt, gross | $ 1,177.8 | 1,130 |
ABL Credit Facility | Line of Credit | Senior Secured Revolving Credit Facility | Other long-term assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs related to credit facility | $ 11.4 | 13.3 |
Asset-backed Securities, Securitized Loans and Receivables [Member] | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted Average Stated Interest Rate at September 30, 2018 | 2.87% | |
Debt, gross | $ 175 | 0 |
Capital leases | Capital leases | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at September 30, 2018 | 4.15% | |
Debt, gross | $ 42.5 | 53.7 |
Other borrowings | Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted Average Stated Interest Rate at September 30, 2018 | 4.79% | |
Debt, gross | $ 6.3 | $ 2.6 |
Debt - Senior Secured Second Pr
Debt - Senior Secured Second Priority Notes (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jul. 12, 2018 | Jun. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Gain (Loss) on Extinguishment of Debt | $ 5,400,000 | |||
Extinguishment on Debt, Cash Premium, Percentage | 3,700,000 | $ 3,700,000 | ||
Write off of Deferred Debt Issuance Cost | 1,700,000 | |||
Senior Secured Second Priority Notes | 7.50% Senior Notes, Due 2022 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 610,000,000 | |||
Stated rate | 7.50% | |||
Aggregate principal amount redeemed | 122,000,000 | $ 61,000,000 | ||
Senior Secured Second Priority Notes | 7.75% Senior Notes, Due 2024 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 625,000,000 | |||
Stated rate | 7.75% | |||
Aggregate principal amount redeemed | $ 125,000,000 | $ 62,500,000 |
Debt - ABL Credit Facility & Ot
Debt - ABL Credit Facility & Other Borrowings (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Remaining Capacity | $ 546,700,000 | |
Availability Under Borrowing Base Limitation | 546,700,000 | |
Line of Credit | ABL Credit Facility | Senior Secured Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,750,000,000 | |
Debt, gross | 1,177,800,000 | $ 1,130,000,000 |
Remaining Capacity | 546,700,000 | |
Availability Under Borrowing Base Limitation | 546,700,000 | |
Line of Credit | ABL Credit Facility | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 350,000,000 | |
Line of Credit | ABL Credit Facility | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 250,000,000 | |
Remaining Capacity | 224,500,000 | |
Letter of credit outstanding | 25,500,000 | |
Long-term Line of Credit | 0 | |
Line of Credit | Other borrowings | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |
Line of credit facility, percentage ratio of interest rate to prevailing base lending rates | 110.00% | |
Debt, gross | $ 6,300,000 | 2,600,000 |
Remaining Capacity | 3,700,000 | |
Line of Credit | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | 175,000,000 | $ 0 |
Remaining Capacity | 0 | |
Availability Under Borrowing Base Limitation | $ 0 |
Debt - Securitization (Details)
Debt - Securitization (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Line of Credit | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Financing obligations | $ 175,000,000 | $ 0 |
Weighted Average Stated Interest Rate at September 30, 2018 | 2.87% | |
Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 175,000,000 |
Financing Obligations - Narrati
Financing Obligations - Narrative (Details) $ in Millions | Oct. 10, 2017USD ($)propertyperiod |
Leases [Abstract] | |
Sale leaseback transaction, number of properties | property | 42 |
Sale leaseback transaction, gross proceeds | $ | $ 119.5 |
Sale leaseback transaction, lease term (in years) | 20 years |
Sale leaseback transaction, number of additional periods | period | 5 |
Sale leaseback transaction, length of each additional period (in years) | 5 years |
Financing Obligations - Obligat
Financing Obligations - Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Less: Current maturities of financing obligations | $ (26.1) | $ (22.7) |
Capital leases | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at September 30, 2018 | 4.62% | |
Financing obligations | $ 116.2 | 118.2 |
Unamortized financing issuance costs | (2.5) | (2.6) |
Total financing obligations | 113.7 | 115.6 |
Less: Current maturities of financing obligations | (2.8) | (2.7) |
Financing obligations, net | $ 110.9 | $ 112.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||||
Income tax expense (benefit) | $ (1) | $ 5.8 | $ (5.3) | $ (31.5) | ||
Provisions income tax benefit | $ 207.1 | |||||
Reduction of the gross income tax benefit related to toll charge as a result tax rate change | 24.5 | |||||
Net income tax benefit related to toll charge as a result tax rate change | $ 14.8 | |||||
Forecast | ||||||
Income Tax Contingency [Line Items] | ||||||
Effective income tax rate reconciliation, percent | 2.00% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 510.4 | |||
Total other comprehensive income (loss) | $ 9 | $ 13.2 | (2.6) | $ 20.3 |
Ending balance | 554.3 | 554.3 | ||
Pension and Other Post-Employment Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (13.5) | |||
Other comprehensive income (loss) before reclassification | 0 | |||
Amounts reclassified from accumulated other comprehensive loss | 0.6 | |||
Total other comprehensive income (loss) | 0.6 | |||
Ending balance | (12.9) | (12.9) | ||
Unrealized Gains on Hedging Instruments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 1.3 | |||
Other comprehensive income (loss) before reclassification | 2.4 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Total other comprehensive income (loss) | 2.4 | |||
Ending balance | 3.7 | 3.7 | ||
Foreign Currency Items | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (86.4) | |||
Other comprehensive income (loss) before reclassification | (5.6) | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Total other comprehensive income (loss) | (5.6) | |||
Ending balance | (92) | (92) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (98.6) | |||
Other comprehensive income (loss) before reclassification | (3.2) | |||
Amounts reclassified from accumulated other comprehensive loss | 0.6 | |||
Total other comprehensive income (loss) | (2.6) | |||
Ending balance | $ (101.2) | $ (101.2) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of actuarial losses | $ (0.4) | $ (1.7) | $ (0.9) | $ (1.5) |
Tax benefit | (1) | 5.8 | (5.3) | (31.5) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period | 0.2 | 0.2 | 0.6 | 0.7 |
Reclassification out of Accumulated Other Comprehensive Income | Selling, general and administrative | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of actuarial losses | 0.3 | 0.2 | 0.8 | 1.1 |
Reclassification out of Accumulated Other Comprehensive Income | Income tax benefit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax benefit | $ (0.1) | $ 0 | $ (0.2) | $ (0.4) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Loss Contingencies [Line Items] | |
Accrual for environmental liabilities | $ 0.1 |
New Hertz | |
Loss Contingencies [Line Items] | |
Portion of shared liabilities | 15.00% |
Financial Instruments - Summary
Financial Instruments - Summary of Outstanding Interest Rate Swap Agreement (Details) - Interest rate swap - Cash Flow Hedge $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative contract term | 3 years |
Aggregate Notional Amount | $ 350 |
LIBOR | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Spread on receive rate | 1.75% |
Receive Rate as of September 30, 2018 | 4.00% |
Pay Rate | 3.50% |
Financial Instruments - Estimat
Financial Instruments - Estimated Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - Derivatives Designated as Hedging Instruments - Interest rate swap - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Prepaid Expenses and Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset Derivatives | $ 5.3 | $ 2.1 |
Accrued Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability Derivatives | $ 0 | $ 0 |
Financial Instruments - Gains (
Financial Instruments - Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Selling, General and Administrative Expenses | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss on cash flow hedge | $ 0 | $ (0.4) | $ 0.2 | $ (4) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents and investments | $ 0 | |
Carrying value | ||
Fair Value of Financial Instruments [Abstract] | ||
Notes | 864,500,000 | $ 988,000,000 |
Fair Value | Level 2 | ||
Fair Value of Financial Instruments [Abstract] | ||
Notes | $ 921,900,000 | $ 1,074,600,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (loss), basic and diluted | $ 46.2 | $ 12.8 | $ 35.8 | $ (54) |
Denominator: | ||||
Basic weighted average common shares | 28.5 | 28.3 | 28.4 | 28.3 |
Stock options, RSUs and PSUs | 0.4 | 0.3 | 0.5 | 0 |
Weighted average shares used to calculate diluted income (loss) per share | 28.9 | 28.6 | 28.9 | 28.3 |
Earnings Per Share, Basic | $ 1.62 | $ 0.45 | $ 1.26 | $ (1.91) |
Earnings Per Share, Diluted | $ 1.60 | $ 0.45 | $ 1.24 | $ (1.91) |
Antidilutive stock options, RSUs and PSUs | ||||
Earnings (loss) per share: | ||||
Antidilutive stock options, RSUs and PSUs | 0.2 | 0.4 | 0.2 | 0.7 |
Related Party Transactions - Ag
Related Party Transactions - Agreements with Carl Icahn (Details) - Nomination and Standstill Agreement - Icahn Group - shares | Sep. 15, 2014 | Sep. 30, 2018 |
Related Party Transaction [Line Items] | ||
Ownership percentage limit (more than) | 20.00% | |
Net long position shares held, tranche one (at least) (in shares) | 1,900,000 |
Arrangements With New Hertz Arr
Arrangements With New Hertz Arrangements With New Hertz (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Transition Services Agreement | New Hertz | ||||
Related Party Transaction [Line Items] | ||||
Incurred expenses | $ 0.6 | $ 4.2 | $ 6.3 | $ 14.3 |