Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 17, 2020 | |
Entity Information [Line Items] | ||
Document Transition Report | false | |
Document Quarterly Report | true | |
Document Fiscal Period Focus | Q1 | |
20-3530539 | 20-3530539 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Registrant Name | HERC HOLDINGS INC. | |
Entity Address, Address Line One | 27500 Riverview Center Blvd. | |
Entity Address, City or Town | Bonita Springs | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34134 | |
City Area Code | 239 | |
Local Phone Number | 301-1000 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | HRI | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0001364479 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Entity File Number | 001-33139 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Common Stock, Shares Outstanding | 29,111,222 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 55.8 | $ 33 |
Receivables, net of allowances of $22.5 and $18.8, respectively | 288.8 | 306.7 |
Other current assets | 22.5 | 28.9 |
Assets held for sale | 28.4 | 31.1 |
Total current assets | 395.5 | 399.7 |
Rental equipment, net | 2,440.4 | 2,490 |
Property and equipment, net | 306.2 | 311.8 |
Right-of-use lease assets | 219.1 | 207.3 |
Intangible assets, net | 290.2 | 291.5 |
Goodwill | 93.6 | 93.6 |
Other long-term assets | 22.2 | 23.1 |
Total assets | 3,767.2 | 3,817 |
LIABILITIES AND EQUITY | ||
Current maturities of long-term debt and financing obligations | 25.7 | 30.4 |
Current maturities of operating lease liabilities | 30.9 | 30.5 |
Accounts payable | 135.4 | 126.5 |
Accrued liabilities | 107.1 | 135.7 |
Total current liabilities | 299.1 | 323.1 |
Long-term debt, net | 2,041.6 | 2,051.5 |
Financing obligations, net | 116.7 | 117.6 |
Operating lease liabilities | 193.9 | 182.2 |
Deferred tax liabilities | 457 | 459.3 |
Other long-term liabilities | 39 | 39 |
Total liabilities | 3,147.3 | 3,172.7 |
Commitments and contingencies (Note 11) | ||
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, 31.8 and 31.5 shares issued and 29.1 and 28.8 shares outstanding | 0.3 | 0.3 |
Additional paid-in capital | 1,798.2 | 1,796.9 |
Accumulated deficit | (354.9) | (351.2) |
Accumulated other comprehensive loss | (131.7) | (109.7) |
Treasury stock, at cost, 2.7 shares and 2.7 shares | (692) | (692) |
Total equity | 619.9 | 644.3 |
Total liabilities and equity | $ 3,767.2 | $ 3,817 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 22.5 | $ 18.8 |
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) | 31,800,000 | 31,500,000 |
Common Stock, shares outstanding (in shares) | 29,100,000 | 28,800,000 |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 436.2 | $ 475.7 |
Expenses: | ||
Direct operating | 189.2 | 189.1 |
Depreciation of rental equipment | 100.4 | 100 |
Cost of sales of rental equipment | 42.4 | 83.5 |
Cost of sales of new equipment, parts and supplies | 5.1 | 8.2 |
Selling, general and administrative | 69.8 | 71.5 |
Impairment | 6.3 | 0 |
Interest expense, net | 24.4 | 32.9 |
Other expense, net | 1.2 | 0.3 |
Total expenses | 438.8 | 485.5 |
Loss before income taxes | (2.6) | (9.8) |
Income tax benefit (provision) | (1.1) | 3.1 |
Net loss | $ (3.7) | $ (6.7) |
Weighted average shares outstanding: | ||
Basic and diluted | 28.9 | 28.6 |
Loss per share: | ||
Basic and diluted | $ (0.13) | $ (0.23) |
Equipment rental | ||
Revenues: | ||
Total revenues | $ 386.5 | $ 377.6 |
Sales of rental equipment | ||
Revenues: | ||
Total revenues | 40 | 85.1 |
Sales of new equipment, parts and supplies | ||
Revenues: | ||
Total revenues | 7 | 10.9 |
Service and other revenue | ||
Revenues: | ||
Total revenues | $ 2.7 | $ 2.1 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (3.7) | $ (6.7) |
Foreign currency translation adjustments | (21.1) | 5.3 |
Unrealized gains (losses) on hedging instruments | 0 | (1.2) |
Reclassification into net loss | 1.5 | |
Income tax provision related to hedging instruments | (0.3) | (0.3) |
Amortization of net losses included in net periodic pension cost | 0.4 | 0.4 |
Pension and postretirement benefit liability adjustments: | ||
Income tax provision related to defined benefit pension plans | (0.1) | (0.1) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (22) | 4.7 |
Total comprehensive loss | $ (25.7) | $ (2) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 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, 2018 | 28.5 | |||||
Beginning balance at Dec. 31, 2018 | $ 572.7 | $ 0.3 | $ 1,777.9 | $ (391.1) | $ (122.4) | $ (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 6.7 | 6.7 | ||||
Other comprehensive income | 4.7 | 4.7 | ||||
Net settlement on vesting of equity awards (shares) | 0.1 | |||||
Net settlement on vesting of equity awards | 1.8 | 1.8 | ||||
Stock-based compensation charges | 3.9 | 3.9 | ||||
Employee stock purchase plan | 0.6 | 0.6 | ||||
Ending balance at Mar. 31, 2019 | 565.8 | $ 0.3 | 1,780.6 | (405.4) | (117.7) | (692) |
Ending balance (in shares) at Mar. 31, 2019 | 28.6 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of new accounting pronouncement | (7.6) | (7.6) | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 28.8 | |||||
Beginning balance at Dec. 31, 2019 | 644.3 | $ 0.3 | 1,796.9 | (351.2) | (109.7) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | 3.7 | 3.7 | ||||
Other comprehensive income | (22) | (22) | ||||
Net settlement on vesting of equity awards (shares) | 0.3 | |||||
Net settlement on vesting of equity awards | 2.5 | 2.5 | ||||
Stock-based compensation charges | 3.2 | 3.2 | ||||
Employee stock purchase plan | 0.6 | 0.6 | ||||
Ending balance at Mar. 31, 2020 | $ 619.9 | $ 0.3 | $ 1,798.2 | $ (354.9) | $ (131.7) | $ (692) |
Ending balance (in shares) at Mar. 31, 2020 | 29.1 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (3.7) | $ (6.7) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation of rental equipment | 100.4 | 100 | |
Depreciation of property and equipment | 14 | 13.3 | |
Amortization of intangible assets | 1.8 | 1.7 | |
Amortization of deferred debt and financing obligations costs | 0.9 | 1.6 | |
Stock-based compensation charges | 3.2 | 3.9 | |
Impairment | 6.3 | 0 | |
Provision for receivables allowances | 12.3 | 12.3 | |
Deferred taxes | 0.8 | (3.3) | |
Loss (gain) on sale of rental equipment | 2.4 | (1.6) | |
Other Operating Activities, Cash Flow Statement | 3.1 | 3.4 | |
Changes in assets and liabilities: | |||
Receivables | 6 | 3.7 | |
Other assets | (3.4) | 2.3 | |
Accounts payable | (11.4) | (2.3) | |
Accrued liabilities and other long-term liabilities | (31.2) | 2.9 | |
Net cash provided by operating activities | 101.5 | 131.2 | |
Cash flows from investing activities: | |||
Rental equipment expenditures | (83) | (82.6) | |
Proceeds from disposal of rental equipment | 34.6 | 69.6 | |
Non-rental capital expenditures | (15.5) | (11.4) | |
Proceeds from disposal of property and equipment | 1.6 | 0.9 | |
Net cash used in investing activities | (62.3) | (23.5) | |
Cash flows from financing activities: | |||
Proceeds from revolving lines of credit and securitization | 261 | 62.3 | |
Repayments on revolving lines of credit and securitization | (271.7) | (172.7) | |
Proceeds from financing obligations | 0 | 4.7 | $ 6.4 |
Principal payments under capital lease and financing obligations | (3.2) | (4.2) | |
Proceeds from employee stock purchase plan | 0.6 | 0.5 | |
Net settlement on vesting of equity awards | (2.5) | (1.8) | |
Net cash used in financing activities | (15.8) | (111.2) | |
Effect of foreign exchange rate changes on cash and cash equivalents | (0.6) | 0.2 | |
Net increase (decrease) in cash and cash equivalents during the period | 22.8 | (3.3) | |
Cash and cash equivalents cash at beginning of period | 33 | 27.8 | |
Cash and cash equivalents at end of period | 55.8 | 24.5 | $ 27.8 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 41.5 | 15.3 | |
Cash paid (refunded) for income taxes, net | 0.7 | (1.3) | |
Supplemental disclosure of non-cash investing activity: | |||
Purchases of rental equipment in accounts payable | 24.6 | 25.4 | |
Disposal of rental equipment in accounts receivable | 1.9 | 7.5 | |
Disposal of property and equipment in accounts receivable | $ 0 | $ 1.1 |
Background
Background | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 , 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, the Company is a full-line equipment rental supplier offering a broad portfolio of equipment for rent. In addition to its principal business of equipment rental, the Company sells used equipment and contractor supplies such as construction consumables, tools, small equipment and safety supplies; provides repair, maintenance, equipment management services and safety training to certain of its customers; offers equipment re-rental services and provides on-site support to its customers; and provides ancillary services such as equipment transport, rental protection, cleaning, refueling and labor. The Company's classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction and lighting. The Company's equipment rental business is supported by ProSolutions R , its industry-specific solutions-based services, which includes power generation, climate control, remediation and restoration, and studio and production equipment, and its 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 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. |
Basis of Presentation and Recen
Basis of Presentation and Recently Issued Accounting Pronouncements Basis of Presentation and Recently Issued Accounting Pronouncements (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | 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, 2019 , filed with the SEC on February 27, 2020. 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 receivables allowances, 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 and 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 Fair Value Measurement In August 2018, the FASB issued new guidance that modifies disclosure requirements on fair value measurements, removing and modifying certain disclosures, while adding other disclosures. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company adopted the new guidance on its effective date and did not have a material impact on its financial statement disclosures. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance that requires companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted. Different components of the guidance require modified retrospective or prospective adoption. This guidance does not apply to receivables arising from operating leases and, as discussed in Note 3 , " Revenue Recognition ," most of the Company's equipment rental revenue is accounted for as lease revenue under Accounting Standards Codification ("ASC") Topic 842, Leases, ("Topic 842"). The Company adopted this guidance on its effective date and did not have a material impact on its financial position, results of operations or cash flows. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance that simplifies the accounting for income taxes. The guidance removes the following exceptions: (i) exceptions to the approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, (ii) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, (iii) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and (iv) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: (i) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (ii) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, (iii) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), (iv) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and (v) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The Company early adopted this guidance on January 1, 2020 and there was no material impact on its financial position, results of operations or cash flows. Not Yet Adopted Compensation - Retirement Benefits In August 2018, the FASB issued guidance that adds, removes, and modifies disclosure requirements related to defined benefit pension and other postretirement plans in order to improve the disclosure effectiveness. The guidance is effective for fiscal years beginning after December 15, 2020 and should be applied on a retrospective basis to all periods presented, with early adoption permitted. The Company expects to adopt the new and modified disclosures requirements of this new guidance on its effective date. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
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 90.0% of total revenue for the three months ended March 31, 2020 , respectively, compared to 88.8% for the same period in 2019 . The Company’s rental transactions are accounted for under Topic 842. 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"). The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for such products or services. The following tables summarizes the applicable accounting guidance for the Company’s revenues for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 353.5 $ — $ 353.5 $ 346.7 $ — $ 346.7 Other rental revenue: Delivery and pick-up — 20.9 20.9 — 19.9 19.9 Other 12.1 — 12.1 11.0 — 11.0 Total other rental revenues 12.1 20.9 33.0 11.0 19.9 30.9 Total equipment rentals 365.6 20.9 386.5 357.7 19.9 377.6 Sales of rental equipment — 40.0 40.0 — 85.1 85.1 Sales of new equipment, parts and supplies — 7.0 7.0 — 10.9 10.9 Service and other revenues — 2.7 2.7 — 2.1 2.1 Total revenues $ 365.6 $ 70.6 $ 436.2 $ 357.7 $ 118.0 $ 475.7 Topic 842 revenues Equipment Rental Revenue 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 by the customer with no penalty by returning the equipment within one day; therefore, the Company does not allocate the transaction price between the different contract elements. 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. As part of this straight-line methodology, when the equipment is returned, the Company recognizes as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, the Company will have customers return equipment and be contractually required to pay more than the cumulative amount of revenue recognized to date under the straight-line methodology. 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 March 31, 2020 2019 Sales of rental equipment $ 40.0 $ 85.1 Sales of new equipment 3.0 4.5 Sales of parts and supplies 4.0 6.4 Total $ 47.0 $ 96.0 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 $17.4 million and $15.6 million as of March 31, 2020 and December 31, 2019 , respectively. 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 842. The customers that are responsible for the remaining equipment rental 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. 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 material contract assets or 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 months ended March 31, 2020 and 2019 that was included in the contract liability balance as of the beginning of each 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 months ended March 31, 2020 and 2019 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 March 31, 2020 . 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 | 3 Months Ended |
Mar. 31, 2020 | |
Property Subject to or Available for Operating Lease, Net [Abstract] | |
Revenue Earning Equipment | Rental Equipment Rental equipment consists of the following (in millions): March 31, 2020 December 31, 2019 Rental equipment $ 3,786.2 $ 3,821.6 Less: Accumulated depreciation (1,345.8 ) (1,331.6 ) Rental equipment, net $ 2,440.4 $ 2,490.0 |
Impairment (Notes)
Impairment (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Assets Held for Sale and Impairment As of March 31, 2020 , the Company's assets held for sale consisted of the net assets of its remaining international operations outside of North America. The operations have been actively marketed for sale and management expects the sale to be completed within the next 12 months. In connection with the reclassification of the assets held for sale, an impairment analysis was performed and an impairment charge of approximately $4.0 million was recorded during the year ended December 31, 2019 . During the three months ended March 31, 2020 , the Company recorded an impairment charge of $6.3 million on a certain long-term receivable balance related to a previous joint venture, the remaining balance of $12.7 million is included in "Other long-term assets" in the condensed consolidated balance sheets. |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lessee, Finance Leases [Text Block] | Leases The Company leases real estate, office equipment and service vehicles. The Company's leases have remaining lease terms of up to 15 years , some of which include options to extend the leases for up to 20 years . The Company has included the initial lease term and, in the case where there are options to extend, will include the option to extend if it has determined that it is reasonably certain that the Company would exercise those options. The Company also leases certain equipment that it rents to its customers where the payments vary based upon the amount of time the equipment is on rent. There are no fixed payments on these leases and, therefore, no lease liability or right-of-use ("ROU") assets have been recorded. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. The components of lease expense consist of the following (in millions): Three Months Ended March 31, Classification 2020 2019 Operating lease cost (a) Direct operating $ 24.3 $ 22.4 Finance lease cost: Amortization of ROU assets Depreciation and amortization (b) 3.1 2.4 Interest on lease liabilities Interest expense, net 0.4 0.4 Sublease income Equipment rental revenue (15.1 ) (14.7 ) Net lease cost $ 12.7 $ 10.5 (a) Includes short-term leases of $ 12.0 million and $11.6 million for the three months ended March 31, 2020 and 2019, respectively, and variable lease costs of $0.8 million and $1.6 million for the three months ended March 31, 2020 and 2019, respectively. (b) Depreciation and amortization is included with selling, general and administrative expense. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at March 31, 2020 Weighted Average Stated Interest Rate at March 31, 2020 Fixed or Floating Interest Rate Maturity March 31, December 31, Senior Notes 2027 Notes 5.61% 5.50% Fixed 2027 $ 1,200.0 $ 1,200.0 Other Debt ABL Credit Facility N/A 2.16% Floating 2024 776.0 650.0 AR Facility N/A 1.55% Floating 2020 40.0 175.0 Finance lease liabilities 3.02% N/A Fixed 2020-2027 52.0 56.2 Other borrowings N/A 4.79% Floating 2021 3.5 5.2 Unamortized Debt Issuance Costs (a) (7.7 ) (7.9 ) Total debt 2,063.8 2,078.5 Less: Current maturities of long-term debt (22.2 ) (27.0 ) Long-term debt, net $ 2,041.6 $ 2,051.5 (a) Unamortized debt issuance costs totaling $8.7 million and $9.3 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of March 31, 2020 and December 31, 2019 , respectively, and are included in "Other long-term assets" in the condensed consolidated balance sheets. The effective interest rate for the fixed rate 2027 Notes (as defined below) includes the stated interest on the notes and the amortization of any debt issuance costs. Senior Notes On July 9, 2019, the Company issued $1.2 billion aggregate principal amount of its 5.50% Senior Notes due 2027 (the "2027 Notes"). Interest on the 2027 Notes accrues at the rate of 5.50% per annum and will be payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2020. The 2027 Notes will mature on July 15, 2027. Additional information about the 2027 Notes is included in Note 10 to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019. ABL Credit Facility On July 31, 2019, Herc Holdings, Herc and certain other subsidiaries of Herc Holdings entered into a credit agreement with respect to a senior secured asset-based revolving credit facility (the "ABL Credit Facility"). The ABL Credit Facility provides (subject to availability under a borrowing base) for aggregate maximum borrowings of up to $1,750 million under a revolving loan 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. Subject to the satisfaction of certain conditions and limitations, the ABL Credit Facility allows for the addition of incremental revolving commitments and/or incremental term loans. The ABL Credit Facility matures on July 31, 2024. Additional information about the ABL Credit Facility is included in Note 10 to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019. 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 that 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. 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. The AR Facility is excluded from current maturities of long-term debt as the Company has the intent and ability to consummate refinancing and extend the term of the agreement. Other Borrowings The Company's subsidiary in China has uncommitted credit agreements for up to an aggregate principal amount of $10.0 million . Interest accrues on the loans drawn under these facilities at an applicable loan prime rate plus 0.535% published by National Interbank Funding Center and is payable quarterly. As of March 31, 2020 , the Company had short-term borrowings under these facilities totaling $3.5 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 March 31, 2020 (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 954.4 $ 954.4 AR Facility 135.0 127.1 Total $ 1,089.4 $ 1,081.5 In addition, as of March 31, 2020 , the Company's subsidiary in China had uncommitted credit facilities of which $6.5 million was available for borrowing. Letters of Credit As of March 31, 2020 , $19.6 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $230.4 million available under the letter of credit facility sublimit, subject to borrowing base restrictions. |
Financing Obligations
Financing Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Financing Obligations | The Company's financing obligations consist of the following (in millions): Weighted Average Effective Interest Rate at March 31, 2020 Maturities March 31, 2020 December 31, 2019 Financing obligations 5.00% 2026-2038 $ 122.7 $ 123.5 Unamortized financing issuance costs (2.5 ) (2.5 ) Total financing obligations 120.2 121.0 Less: Current maturities of financing obligations (3.5 ) (3.4 ) Financing obligations, net $ 116.7 $ 117.6 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax provision was $1.1 million for the three months ended March 31, 2020 compared to a benefit of $3.1 million |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
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 three months ended March 31, 2020 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Unrealized Gains (Loss) on Hedging Instruments Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ (16.0 ) $ 1.2 $ (94.9 ) $ (109.7 ) Other comprehensive loss before reclassification — — (21.1 ) (21.1 ) Amounts reclassified from accumulated other comprehensive loss 0.3 (1.2 ) — (0.9 ) Net current period other comprehensive income (loss) 0.3 (1.2 ) (21.1 ) (22.0 ) Balance at March 31, 2020 $ (15.7 ) $ — $ (116.0 ) $ (131.7 ) Amounts reclassified from accumulated other comprehensive income (loss) to net loss were as follows (in millions): Three Months Ended March 31, Pension and other postretirement benefit plans Statement of Operations Caption 2020 2019 Amortization of actuarial losses Selling, general and administrative $ 0.4 $ 0.4 Tax benefit Income tax benefit (provision) (0.1 ) (0.1 ) 0.3 0.3 Hedging instruments Gain on settlement Interest expense, net (1.5 ) — Tax provision Income tax benefit (provision) 0.3 — (1.2 ) — Total reclassifications for the period $ (0.9 ) $ 0.3 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings 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. On February 5, 2019, plaintiff filed a motion to set aside the judgment against it, and for leave to file a fifth amended complaint. The proposed amended complaint would add allegations related to New Hertz’s December 31, 2018 settlement with the SEC that, among other things, ordered New Hertz to cease and desist from violating certain of the federal securities laws and imposed a civil penalty of $16.0 million . On February 26, 2019, New Hertz filed an opposition to plaintiff’s motion for relief from judgment and leave to file a fifth amended complaint. On March 8, 2019, plaintiff filed a reply in support of that motion. On September 30, 2019, the court denied plaintiff’s motion for relief from judgment and leave to file a fifth amended complaint. On October 30, 2019, plaintiff filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit, and appellate briefing was completed in March 2020. 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, 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 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, 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 March 31, 2020 and December 31, 2019 , the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in the Company's consolidated balance sheets in "Accrued liabilities" was $0.2 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). Guarantee The Company has guaranteed an outstanding bank loan in connection with a previous joint venture. The Company has determined the maximum potential payment amount under the guarantee is approximately $5.6 million ; however, the probability of any payment is remote and therefore the Company has not recorded a liability on its balance sheet as of March 31, 2020 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 or December 31, 2019 . Debt Obligations The fair values of the Company's ABL Credit Facility, AR Facility, finance lease liabilities and other borrowings approximated their book values as of March 31, 2020 and December 31, 2019 . The fair value of the Company's 2027 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). March 31, 2020 December 31, 2019 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value 2027 Notes $ 1,200.0 $ 1,113.0 $ 1,200.0 $ 1,265.0 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Basic and diluted loss per share: Numerator: Net loss, basic and diluted $ (3.7 ) $ (6.7 ) Denominator: Basic weighted average common shares 28.9 28.6 Stock options, RSUs and PSUs — — Weighted average shares used to calculate diluted loss per share 28.9 28.6 Loss per share: Basic and diluted $ (0.13 ) $ (0.23 ) Antidilutive stock options, RSUs and PSUs 0.8 0.9 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
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 and certain related entities and individuals. In connection with their appointments or nomination, as applicable, to the Company’s board of directors (the "Board"), each of Jonathan Frates, Nicholas F. Graziano, Andrew N. Langham and Louis J. Pastor (collectively, the "Icahn Designees," and, together with Carl C. Icahn and the other parties to the Nomination and Standstill Agreements, 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, the Icahn Designees were appointed or nominated to the Company’s Board. 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 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 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. Pursuant to the Icahn Agreements, the Company will not create a separate executive committee of the Board so as long as an Icahn Designee is a member of the Board. 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 certain entities related to Carl C. Icahn 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. Tax Matters Agreement The Company entered into a 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. |
Arrangements with new hertz (No
Arrangements with new hertz (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [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 and certain related entities and individuals. In connection with their appointments or nomination, as applicable, to the Company’s board of directors (the "Board"), each of Jonathan Frates, Nicholas F. Graziano, Andrew N. Langham and Louis J. Pastor (collectively, the "Icahn Designees," and, together with Carl C. Icahn and the other parties to the Nomination and Standstill Agreements, 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, the Icahn Designees were appointed or nominated to the Company’s Board. 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 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 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. Pursuant to the Icahn Agreements, the Company will not create a separate executive committee of the Board so as long as an Icahn Designee is a member of the Board. 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 certain entities related to Carl C. Icahn 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. Tax Matters Agreement The Company entered into a 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. |
Sub Event (Notes)
Sub Event (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event In December 2019, a novel strain of coronavirus (COVID-19) was identified in China and has since spread to approximately 160 countries, including the United States. In March 2020, the World Health Organization characterized COVID-19 as a pandemic. During the three months ended March 31, 2020, the COVID-19 pandemic did not have a material impact on the Company’s business. However, federal, state and local efforts to contain the spread of COVID-19 intensified in March 2020 when several states in the United States enacted shelter in place orders, declared states of emergency, took steps to restrict travel, enacted temporary closures of non-essential businesses and took other restrictive measures in response to the COVID-19 pandemic. As a result of these measures, in April 2020, the Company is currently experiencing a year-over-year decrease in volume of fleet on rent and this reduction in volume could negatively impact equipment rental revenue. The length of the closures will determine the severity of the impact, which remains highly uncertain. The Company’s business has been designated an essential business, which allows the Company to continue to serve customers that remain open. The Company conducts its operations in support of industries and services that are also designated essential businesses such as healthcare, utilities, government and construction. However, many other industries in which the Company operates have been required to temporarily close their facilities or delay or cancel projects and events. As a result, the Company has reduced its capital spending in the short-term and, where possible, also reducing operating expenses while ensuring ongoing safe and reliable operations. The impact of the COVID-19 pandemic is developing rapidly and continues to evolve, and therefore, the Company cannot predict the extent to which its financial condition, results of operations or cash flows will ultimately be impacted. |
Basis of Presentation and Rec_2
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2019 , filed with the SEC on February 27, 2020. 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 receivables allowances, 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 and accounting for income taxes, among others. |
Principles of Consolidation | Principles of Consolidation |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Fair Value Measurement In August 2018, the FASB issued new guidance that modifies disclosure requirements on fair value measurements, removing and modifying certain disclosures, while adding other disclosures. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company adopted the new guidance on its effective date and did not have a material impact on its financial statement disclosures. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued guidance that requires companies to present assets held at amortized cost and available for sale debt securities net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted. Different components of the guidance require modified retrospective or prospective adoption. This guidance does not apply to receivables arising from operating leases and, as discussed in Note 3 , " Revenue Recognition ," most of the Company's equipment rental revenue is accounted for as lease revenue under Accounting Standards Codification ("ASC") Topic 842, Leases, ("Topic 842"). The Company adopted this guidance on its effective date and did not have a material impact on its financial position, results of operations or cash flows. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance that simplifies the accounting for income taxes. The guidance removes the following exceptions: (i) exceptions to the approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, (ii) exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, (iii) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary and (iv) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Additionally, the guidance simplifies the accounting for income taxes by: (i) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (ii) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction, (iii) specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements (although the entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority), (iv) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and (v) making minor improvements for income tax accounting related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. The Company early adopted this guidance on January 1, 2020 and there was no material impact on its financial position, results of operations or cash flows. Not Yet Adopted Compensation - Retirement Benefits In August 2018, the FASB issued guidance that adds, removes, and modifies disclosure requirements related to defined benefit pension and other postretirement plans in order to improve the disclosure effectiveness. The guidance is effective for fiscal years beginning after December 15, 2020 and should be applied on a retrospective basis to all periods presented, with early adoption permitted. The Company expects to adopt the new and modified disclosures requirements of this new guidance on its effective date. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Prospective Adoption of New Accounting Pronouncements | The following tables summarizes the applicable accounting guidance for the Company’s revenues for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 353.5 $ — $ 353.5 $ 346.7 $ — $ 346.7 Other rental revenue: Delivery and pick-up — 20.9 20.9 — 19.9 19.9 Other 12.1 — 12.1 11.0 — 11.0 Total other rental revenues 12.1 20.9 33.0 11.0 19.9 30.9 Total equipment rentals 365.6 20.9 386.5 357.7 19.9 377.6 Sales of rental equipment — 40.0 40.0 — 85.1 85.1 Sales of new equipment, parts and supplies — 7.0 7.0 — 10.9 10.9 Service and other revenues — 2.7 2.7 — 2.1 2.1 Total revenues $ 365.6 $ 70.6 $ 436.2 $ 357.7 $ 118.0 $ 475.7 |
Disaggregation of Revenue | 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 March 31, 2020 2019 Sales of rental equipment $ 40.0 $ 85.1 Sales of new equipment 3.0 4.5 Sales of parts and supplies 4.0 6.4 Total $ 47.0 $ 96.0 |
Revenue Earning Equipment (Tabl
Revenue Earning Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Subject to or Available for Operating Lease, Net [Abstract] | |
Components of Revenue Earning Equipment | Rental equipment consists of the following (in millions): March 31, 2020 December 31, 2019 Rental equipment $ 3,786.2 $ 3,821.6 Less: Accumulated depreciation (1,345.8 ) (1,331.6 ) Rental equipment, net $ 2,440.4 $ 2,490.0 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The components of lease expense consist of the following (in millions): Three Months Ended March 31, Classification 2020 2019 Operating lease cost (a) Direct operating $ 24.3 $ 22.4 Finance lease cost: Amortization of ROU assets Depreciation and amortization (b) 3.1 2.4 Interest on lease liabilities Interest expense, net 0.4 0.4 Sublease income Equipment rental revenue (15.1 ) (14.7 ) Net lease cost $ 12.7 $ 10.5 (a) Includes short-term leases of $ 12.0 million and $11.6 million for the three months ended March 31, 2020 and 2019, respectively, and variable lease costs of $0.8 million and $1.6 million for the three months ended March 31, 2020 and 2019, respectively. (b) Depreciation and amortization is included with selling, general and administrative expense. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at March 31, 2020 Weighted Average Stated Interest Rate at March 31, 2020 Fixed or Floating Interest Rate Maturity March 31, December 31, Senior Notes 2027 Notes 5.61% 5.50% Fixed 2027 $ 1,200.0 $ 1,200.0 Other Debt ABL Credit Facility N/A 2.16% Floating 2024 776.0 650.0 AR Facility N/A 1.55% Floating 2020 40.0 175.0 Finance lease liabilities 3.02% N/A Fixed 2020-2027 52.0 56.2 Other borrowings N/A 4.79% Floating 2021 3.5 5.2 Unamortized Debt Issuance Costs (a) (7.7 ) (7.9 ) Total debt 2,063.8 2,078.5 Less: Current maturities of long-term debt (22.2 ) (27.0 ) Long-term debt, net $ 2,041.6 $ 2,051.5 (a) Unamortized debt issuance costs totaling $8.7 million and $9.3 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of March 31, 2020 and December 31, 2019 , respectively, and are included in "Other long-term assets" in the condensed consolidated balance sheets. |
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 March 31, 2020 (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 954.4 $ 954.4 AR Facility 135.0 127.1 Total $ 1,089.4 $ 1,081.5 |
Financing Obligations (Tables)
Financing Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Capital Leases in Financial Statements of Lessee Disclosure | 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 during the fourth quarter of 2018, entered into sale-leaseback transactions with respect to two additional properties for gross proceeds of $6.4 million . Herc 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 consolidated balance sheet. During March 2019, Herc entered into a sale-leaseback transaction for certain service vehicles that did not qualify for sale-leaseback accounting, therefore the book value of the vehicles remains on the Company's consolidated balance sheet. Gross proceeds from the sale-leaseback transaction were $4.7 million . The Company's financing obligations consist of the following (in millions): Weighted Average Effective Interest Rate at March 31, 2020 Maturities March 31, 2020 December 31, 2019 Financing obligations 5.00% 2026-2038 $ 122.7 $ 123.5 Unamortized financing issuance costs (2.5 ) (2.5 ) Total financing obligations 120.2 121.0 Less: Current maturities of financing obligations (3.5 ) (3.4 ) Financing obligations, net $ 116.7 $ 117.6 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 three months ended March 31, 2020 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Unrealized Gains (Loss) on Hedging Instruments Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ (16.0 ) $ 1.2 $ (94.9 ) $ (109.7 ) Other comprehensive loss before reclassification — — (21.1 ) (21.1 ) Amounts reclassified from accumulated other comprehensive loss 0.3 (1.2 ) — (0.9 ) Net current period other comprehensive income (loss) 0.3 (1.2 ) (21.1 ) (22.0 ) Balance at March 31, 2020 $ (15.7 ) $ — $ (116.0 ) $ (131.7 ) |
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 March 31, Pension and other postretirement benefit plans Statement of Operations Caption 2020 2019 Amortization of actuarial losses Selling, general and administrative $ 0.4 $ 0.4 Tax benefit Income tax benefit (provision) (0.1 ) (0.1 ) 0.3 0.3 Hedging instruments Gain on settlement Interest expense, net (1.5 ) — Tax provision Income tax benefit (provision) 0.3 — (1.2 ) — Total reclassifications for the period $ (0.9 ) $ 0.3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Debt | Debt Obligations The fair values of the Company's ABL Credit Facility, AR Facility, finance lease liabilities and other borrowings approximated their book values as of March 31, 2020 and December 31, 2019 . The fair value of the Company's 2027 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). March 31, 2020 December 31, 2019 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value 2027 Notes $ 1,200.0 $ 1,113.0 $ 1,200.0 $ 1,265.0 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Basic and diluted loss per share: Numerator: Net loss, basic and diluted $ (3.7 ) $ (6.7 ) Denominator: Basic weighted average common shares 28.9 28.6 Stock options, RSUs and PSUs — — Weighted average shares used to calculate diluted loss per share 28.9 28.6 Loss per share: Basic and diluted $ (0.13 ) $ (0.23 ) Antidilutive stock options, RSUs and PSUs 0.8 0.9 |
Background (Details)
Background (Details) | 3 Months Ended |
Mar. 31, 2019company_operated_branch | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company owned locations | 275 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Contract with Customer, Asset, Net, Current | $ 17.4 | $ 15.6 | |
UNITED STATES | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 90.00% | 88.80% |
Revenue Recognition - Applicabl
Revenue Recognition - Applicable Accounting Guidance for Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Equipment rental | $ 353.5 | $ 346.7 |
Total other rental revenues | 33 | 30.9 |
Total equipment rentals | 386.5 | 377.6 |
Sales of rental equipment | 40 | 85.1 |
Sales of new equipment, parts and supplies | 7 | 10.9 |
Service and other revenues | 2.7 | 2.1 |
Total revenues | 436.2 | 475.7 |
Topic 842 | ||
Revenues: | ||
Equipment rental | 353.5 | 346.7 |
Total other rental revenues | 12.1 | 11 |
Total equipment rentals | 365.6 | 357.7 |
Sales of rental equipment | 0 | 0 |
Sales of new equipment, parts and supplies | 0 | 0 |
Service and other revenues | 0 | 0 |
Total revenues | 365.6 | 357.7 |
Topic 606 | ||
Revenues: | ||
Equipment rental | 0 | 0 |
Total other rental revenues | 20.9 | 19.9 |
Total equipment rentals | 20.9 | 19.9 |
Sales of rental equipment | 40 | 85.1 |
Sales of new equipment, parts and supplies | 7 | 10.9 |
Service and other revenues | 2.7 | 2.1 |
Total revenues | 70.6 | 118 |
Delivery and pick-up | ||
Revenues: | ||
Total other rental revenues | 20.9 | 19.9 |
Delivery and pick-up | Topic 842 | ||
Revenues: | ||
Total other rental revenues | 0 | 0 |
Delivery and pick-up | Topic 606 | ||
Revenues: | ||
Total other rental revenues | 20.9 | 19.9 |
Other | ||
Revenues: | ||
Total other rental revenues | 12.1 | 11 |
Other | Topic 842 | ||
Revenues: | ||
Total other rental revenues | 12.1 | 11 |
Other | Topic 606 | ||
Revenues: | ||
Total other rental revenues | $ 0 | $ 0 |
Revenue Recognition Revenue by
Revenue Recognition Revenue by Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Sales Revenue, Revenue Earning Equipment, Gross | $ 40 | $ 85.1 |
Sales Revenue, New Equipment | 3 | 4.5 |
Sales Revenue, Parts and Supplies | 4 | 6.4 |
Sales Revenue, Revenue Earning Equipment, Net | $ 47 | $ 96 |
Revenue Earning Equipment - Rev
Revenue Earning Equipment - Revenue Earning Equipment Components (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Property Subject to or Available for Operating Lease, Net [Abstract] | ||
Rental equipment | $ 3,786.2 | $ 3,821.6 |
Less: Accumulated depreciation | (1,345.8) | (1,331.6) |
Rental equipment, net | $ 2,440.4 | $ 2,490 |
Impairment (Details)
Impairment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment of assets held for sale | $ 4 | |
Impairment | 6.3 | $ 0 |
Note receivable related to sale of joint venture | $ 12.7 |
Leases Narrative (Details)
Leases Narrative (Details) - Maximum [Member] | 3 Months Ended |
Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |
Remaining Lease Term | 15 years |
Lessee, Finance Lease, Renewal Term | 20 years |
Leases Lease Cost (Details)
Leases Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating Lease, Cost | $ 24.3 | $ 22.4 |
Finance Lease, Right-of-Use Asset, Amortization | 3.1 | 2.4 |
Finance Lease, Interest Expense | 0.4 | 0.4 |
Sublease Income | (15.1) | (14.7) |
Lease, Cost | 12.7 | 10.5 |
Short-term Lease, Cost | 12 | 11.6 |
Variable Lease, Cost | $ 0.8 | $ 1.6 |
Leases Balance Sheet Lease Info
Leases Balance Sheet Lease Information (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Right-of-use assets | $ 219.1 | $ 207.3 |
Current | ||
Current maturities of operating lease liabilities | 30.9 | 30.5 |
Non-current | ||
Operating lease liabilities | $ 193.9 | $ 182.2 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Costs | $ (7.7) | $ (7.9) |
Total debt | 2,063.8 | 2,078.5 |
Less: Current maturities of financing obligations | (22.2) | (27) |
Long-term debt, net | $ 2,041.6 | 2,051.5 |
Senior Secured Second Priority Notes | 2027 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at March 31, 2020 | 5.61% | |
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |
Debt, gross | $ 1,200 | 1,200 |
Line of Credit | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.55% | |
Debt, gross | $ 40 | 175 |
Line of Credit | Other borrowings | ||
Debt Instrument [Line Items] | ||
Debt, gross | $ 3.5 | 5.2 |
Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at March 31, 2020 | 5.00% | |
Debt, gross | $ 122.7 | 123.5 |
Less: Current maturities of financing obligations | $ (3.5) | (3.4) |
Finance lease liabilities | Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Finance leases | 3.02% | |
Finance lease liabilities | Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Finance Lease, Liability | $ 52 | 56.2 |
Senior Secured Revolving Credit Facility | Line of Credit | New Credit Facility [Member] [Domain] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.16% | |
Debt, gross | $ 776 | 650 |
Senior Secured Revolving Credit Facility | Line of Credit | Other borrowings | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.79% | |
Other long-term assets | Senior Secured Revolving Credit Facility | Line of Credit | ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs related to credit facility | $ 8.7 | $ 9.3 |
Debt - ABL Credit Facility & Ot
Debt - ABL Credit Facility & Other Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||
Remaining Capacity | $ 1,089.4 | |
Availability Under Borrowing Base Limitation | 1,081.5 | |
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 | |
Remaining Capacity | 954.4 | |
Availability Under Borrowing Base Limitation | 954.4 | |
Line of Credit | ABL Credit Facility | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 250 | |
Remaining Capacity | 230.4 | |
Letter of credit outstanding | 19.6 | |
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 | |
Line of credit facility, percentage ratio of interest rate to prevailing base lending rates | 0.535% | |
Debt, gross | $ 3.5 | $ 5.2 |
Remaining Capacity | 6.5 | |
Line of Credit | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | 40 | $ 175 |
Remaining Capacity | 135 | |
Availability Under Borrowing Base Limitation | $ 127.1 |
Debt - Securitization (Details)
Debt - Securitization (Details) $ in Millions | Mar. 31, 2020USD ($) |
Asset-backed Securities, Securitized Loans and Receivables [Member] | |
Debt Instrument [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 175 |
Financing Obligations - Narrati
Financing Obligations - Narrative (Details) $ in Millions | Oct. 10, 2017USD ($)propertyperiod | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019 | Dec. 31, 2018USD ($)property |
Leases [Abstract] | |||||
Sale leaseback transaction, number of properties | property | 42 | 2 | |||
Sale leaseback transaction, gross proceeds | $ | $ 119.5 | $ 0 | $ 4.7 | $ 6.4 | |
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 | 5 years |
Financing Obligations - Obligat
Financing Obligations - Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Less: Current maturities of financing obligations | $ (22.2) | $ (27) |
Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at March 31, 2020 | 5.00% | |
Financing obligations | $ 122.7 | 123.5 |
Unamortized financing issuance costs | (2.5) | (2.5) |
Total financing obligations | 120.2 | 121 |
Less: Current maturities of financing obligations | (3.5) | (3.4) |
Financing obligations, net | $ 116.7 | $ 117.6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income Tax Expense (Benefit) | $ 1.1 | $ (3.1) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 644.3 | $ 572.7 |
Ending balance | 619.9 | 565.8 |
Other comprehensive income | (22) | 4.7 |
Pension and Other Post-Employment Benefits | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.3) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (16) | |
Ending balance | (15.7) | |
Other comprehensive income | 0.3 | |
Unrealized Gains (Loss) on Hedging Instruments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (1.2) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 1.2 | |
Ending balance | 0 | |
Other comprehensive income | (1.2) | 0 |
Foreign Currency Items | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (21.1) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (94.9) | |
Ending balance | (116) | |
Other comprehensive income | (21.1) | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (21.1) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0.9 | (0.3) |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (109.7) | (122.4) |
Ending balance | (131.7) | (117.7) |
Other comprehensive income | $ (22) | $ 4.7 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassification out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of actuarial losses | $ 1.2 | $ 0.3 |
Tax benefit | 1.1 | (3.1) |
Other comprehensive income | (22) | 4.7 |
Unrealized Gains (Loss) on Hedging Instruments | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other comprehensive income | (1.2) | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 1.2 | |
Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other comprehensive income | (22) | 4.7 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (0.9) | 0.3 |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net loss | 0.3 | 0.3 |
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 | (0.4) | (0.4) |
Reclassification out of Accumulated Other Comprehensive Income | Income tax benefit (provision) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Tax benefit | (0.1) | (0.1) |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Loss) on Hedging Instruments | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Tax benefit | 0.3 | 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, before Tax | $ (1.5) | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Accrual for environmental liabilities | $ 0.2 | $ 0.2 |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 5.6 | |
New Hertz | ||
Loss Contingencies [Line Items] | ||
Portion of shared liabilities | 15.00% | |
Hertz Governmental Investigation [Member] | ||
Loss Contingencies [Line Items] | ||
Litigation Settlement, Amount Awarded to Other Party | $ 16 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents and investments | $ 0 | |
Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 1,113,000,000 | $ 1,265,000,000 |
Carry Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 1,200,000,000 | $ 1,200,000,000 |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net loss, basic and diluted | $ (3.7) | $ (6.7) |
Denominator: | ||
Basic weighted average common shares | 28.9 | 28.6 |
Stock options, RSUs and PSUs | 0 | 0 |
Weighted average shares used to calculate diluted loss per share | 28.9 | 28.6 |
Earnings Per Share, Basic and Diluted | $ (0.13) | $ (0.23) |
Antidilutive stock options, RSUs and PSUs | ||
Loss per share: | ||
Antidilutive stock options, RSUs and PSUs | 0.8 | 0.9 |
Related Party Transactions - Ag
Related Party Transactions - Agreements with Carl Icahn (Details) - Nomination and Standstill Agreement - Icahn Group - shares | Sep. 15, 2014 | Mar. 31, 2020 |
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 |