Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33139 | |
Entity Registrant Name | HERC HOLDINGS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3530539 | |
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 $0.01 per share | |
Trading Symbol | HRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,916,562 | |
Entity Central Index Key | 0001364479 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 52.1 | $ 35.1 |
#REF! | 457.8 | 388.1 |
Other current assets | 56.9 | 46.5 |
Total current assets | 566.8 | 469.7 |
Rental equipment, net | 3,115.9 | 2,665.3 |
Property and equipment, net | 336.3 | 308.4 |
Right-of-use lease assets | 517.1 | 413.7 |
Intangible assets, net | 415.9 | 388.7 |
Goodwill | 325.5 | 231.5 |
Other long-term assets | 32.5 | 13.1 |
Total assets | 5,310 | 4,490.4 |
LIABILITIES AND EQUITY | ||
Current maturities of long-term debt and financing obligations | 14.9 | 15.2 |
Current maturities of operating lease liabilities | 41.4 | 38.7 |
Accounts payable | 286.9 | 280.6 |
Accrued liabilities | 185.1 | 195.4 |
Total current liabilities | 528.3 | 529.9 |
Long-term debt, net | 2,503.3 | 1,916.1 |
Financing obligations, net | 109.2 | 111.2 |
Operating lease liabilities | 491.4 | 387.4 |
Deferred tax liabilities | 580.1 | 536.8 |
Other long term liabilities | 32.4 | 32.1 |
Total liabilities | 4,244.7 | 3,513.5 |
Commitments and contingencies (Note 12) | ||
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, 32.6 and 32.4 shares issued and 29.9 and 29.7 shares outstanding | 0.3 | 0.3 |
Additional paid-in capital | 1,802.3 | 1,822.2 |
Retained earnings (accumulated deficit) | 59.6 | (53.4) |
Accumulated other comprehensive loss | (104.9) | (100.2) |
Treasury stock, at cost, 2.7 shares and 2.7 shares | (692) | (692) |
Total equity | 1,065.3 | 976.9 |
Total liabilities and equity | $ 5,310 | $ 4,490.4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 13.5 | $ 13.6 |
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) | 32,600,000 | 32,400,000 |
Common Stock, shares outstanding (in shares) | 29,900,000 | 29,700,000 |
Treasury Stock, shares (in shares) | 2,700,000 | 2,700,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 640.4 | $ 490.9 | $ 1,207.7 | $ 944.7 |
Expenses: | ||||
Direct operating | 270.7 | 203 | 516.9 | 386 |
Depreciation of rental equipment | 130.2 | 101.1 | 249.5 | 201.5 |
Cost of sales of rental equipment | 14.1 | 24.7 | 32.6 | 63.1 |
Cost of sales of new equipment, parts and supplies | 5.4 | 4.9 | 10.7 | 9.1 |
Selling, general and administrative | 97 | 74 | 186.4 | 139.5 |
Interest expense, net | 25.2 | 21 | 47.7 | 42.4 |
Other (income) expense, net | 0.3 | 0.4 | (0.7) | 0.2 |
Total expenses | 542.9 | 429.1 | 1,043.1 | 841.8 |
Income before income taxes | 97.5 | 61.8 | 164.6 | 102.9 |
Income tax provision | (25.3) | (14.7) | (33.9) | (22.9) |
Net income | $ 72.2 | $ 47.1 | $ 130.7 | $ 80 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 29.8 | 29.6 | 29.8 | 29.5 |
Diluted (in shares) | 30.3 | 30.4 | 30.4 | 30.3 |
Earnings per share: | ||||
Basic (in USD per share) | $ 2.42 | $ 1.59 | $ 4.39 | $ 2.71 |
Diluted (in USD per share) | $ 2.38 | $ 1.55 | $ 4.30 | $ 2.64 |
Equipment rental | ||||
Revenues: | ||||
Total revenues | $ 605.4 | $ 448 | $ 1,132.2 | $ 848.4 |
Sales of rental equipment | ||||
Revenues: | ||||
Total revenues | 19.3 | 30.3 | 47 | 74.5 |
Sales of new equipment, parts and supplies | ||||
Revenues: | ||||
Total revenues | 9.4 | 7.8 | 17.1 | 13.9 |
Service and other revenue | ||||
Revenues: | ||||
Total revenues | $ 6.3 | $ 4.8 | $ 11.4 | $ 7.9 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 72.2 | $ 47.1 | $ 130.7 | $ 80 |
Other comprehensive income: | ||||
Foreign currency translation adjustments | (6.7) | 3.1 | (4.3) | 5.5 |
Pension and postretirement benefit liability adjustments: | ||||
Amortization of net losses included in net periodic pension cost | 0.1 | 0.5 | 0.4 | 1 |
Income tax provision related to defined benefit pension plans | 0 | (0.1) | (0.8) | (0.2) |
Total other comprehensive income | (6.6) | 3.5 | (4.7) | 6.3 |
Total comprehensive income | $ 65.6 | $ 50.6 | $ 126 | $ 86.3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 29.4 | |||||
Balance, beginning at Dec. 31, 2020 | $ 742 | $ 0.3 | $ 1,818.2 | $ (277.5) | $ (107) | $ (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 32.9 | 32.9 | ||||
Other comprehensive income | 2.8 | 2.8 | ||||
Net settlement on vesting of equity awards (in shares) | 0.2 | |||||
Net settlement on vesting of equity awards | (7.1) | (7.1) | ||||
Stock-based compensation charges | 5.3 | 5.3 | ||||
Employee stock purchase plan | 0.6 | 0.6 | ||||
Exercise of stock options | 1.5 | 1.5 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 29.6 | |||||
Balance, ending at Mar. 31, 2021 | 778 | $ 0.3 | 1,818.5 | (244.6) | (104.2) | (692) |
Beginning balance (in shares) at Dec. 31, 2020 | 29.4 | |||||
Balance, beginning at Dec. 31, 2020 | 742 | $ 0.3 | 1,818.2 | (277.5) | (107) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 80 | |||||
Ending balance (in shares) at Jun. 30, 2021 | 29.6 | |||||
Balance, ending at Jun. 30, 2021 | 835.4 | $ 0.3 | 1,825.3 | (197.5) | (100.7) | (692) |
Beginning balance (in shares) at Mar. 31, 2021 | 29.6 | |||||
Balance, beginning at Mar. 31, 2021 | 778 | $ 0.3 | 1,818.5 | (244.6) | (104.2) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 47.1 | 47.1 | ||||
Other comprehensive income | 3.5 | 3.5 | ||||
Net settlement on vesting of equity awards | (1.1) | (1.1) | ||||
Stock-based compensation charges | 7.1 | 7.1 | ||||
Employee stock purchase plan | 0.6 | 0.6 | ||||
Exercise of stock options | 0.2 | 0.2 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 29.6 | |||||
Balance, ending at Jun. 30, 2021 | 835.4 | $ 0.3 | 1,825.3 | (197.5) | (100.7) | (692) |
Beginning balance (in shares) at Dec. 31, 2021 | 29.7 | |||||
Balance, beginning at Dec. 31, 2021 | 976.9 | $ 0.3 | 1,822.2 | (53.4) | (100.2) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 58.5 | 58.5 | ||||
Other comprehensive income | 1.9 | 1.9 | ||||
Net settlement on vesting of equity awards (in shares) | 0.2 | |||||
Net settlement on vesting of equity awards | (15) | (15) | ||||
Dividends declared, $0.575 per share | (17.6) | (17.6) | ||||
Stock-based compensation charges | 6.2 | 6.2 | ||||
Employee stock purchase plan | 0.8 | 0.8 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 29.9 | |||||
Balance, ending at Mar. 31, 2022 | 1,011.7 | $ 0.3 | 1,796.6 | 5.1 | (98.3) | (692) |
Beginning balance (in shares) at Dec. 31, 2021 | 29.7 | |||||
Balance, beginning at Dec. 31, 2021 | 976.9 | $ 0.3 | 1,822.2 | (53.4) | (100.2) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 130.7 | |||||
Ending balance (in shares) at Jun. 30, 2022 | 29.9 | |||||
Balance, ending at Jun. 30, 2022 | 1,065.3 | $ 0.3 | 1,802.3 | 59.6 | (104.9) | (692) |
Beginning balance (in shares) at Mar. 31, 2022 | 29.9 | |||||
Balance, beginning at Mar. 31, 2022 | 1,011.7 | $ 0.3 | 1,796.6 | 5.1 | (98.3) | (692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 72.2 | 72.2 | ||||
Other comprehensive income | (6.6) | (6.6) | ||||
Net settlement on vesting of equity awards | (0.2) | (0.2) | ||||
Dividends declared, $0.575 per share | (17.7) | (17.7) | ||||
Stock-based compensation charges | 5.1 | 5.1 | ||||
Employee stock purchase plan | 0.8 | 0.8 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 29.9 | |||||
Balance, ending at Jun. 30, 2022 | $ 1,065.3 | $ 0.3 | $ 1,802.3 | $ 59.6 | $ (104.9) | $ (692) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parentheticals) - $ / shares | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in USD per share) | $ 0.575 | $ 0.575 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 130.7 | $ 80 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of rental equipment | 249.5 | 201.5 |
Depreciation of property and equipment | 30.4 | 26.9 |
Amortization of intangible assets | 13 | 4.9 |
Amortization of deferred debt and financing obligations costs | 1.6 | 1.6 |
Stock-based compensation charges | 11.3 | 12.4 |
Provision for receivables allowances | 20.5 | 14.3 |
Deferred taxes | 43.1 | 16.3 |
Gain on sale of rental equipment | (14.4) | (11.4) |
Other | 1.4 | 2.3 |
Changes in assets and liabilities: | ||
Receivables | (83) | (27.8) |
Other assets | (7.4) | 0.2 |
Accounts payable | (22.8) | 6.2 |
Accrued liabilities and other long-term liabilities | (15) | 0.5 |
Net cash provided by operating activities | 358.9 | 327.9 |
Cash flows from investing activities: | ||
Rental equipment expenditures | (555.3) | (239.3) |
Proceeds from disposal of rental equipment | 46.8 | 71 |
Non-rental capital expenditures | (27.5) | (20.9) |
Proceeds from disposal of property and equipment | 3.3 | 2.4 |
Acquisitions, net of cash acquired | (317.1) | (17.9) |
Other investing activities | (23) | 0 |
Net cash used in investing activities | (872.8) | (204.7) |
Cash flows from financing activities: | ||
Proceeds from revolving lines of credit and securitization | 872.8 | 165 |
Repayments on revolving lines of credit and securitization | (286.2) | (275) |
Principal payments under finance lease and financing obligations | (7.6) | (6.7) |
Dividends paid | (34.3) | 0 |
Proceeds from exercise of stock options | 0 | 1.7 |
Proceeds from employee stock purchase plan | 1.6 | 1.2 |
Net settlement on vesting of equity awards | (15.2) | (8.2) |
Net cash provided by (used in) financing activities | 531.1 | (122) |
Effect of foreign exchange rate changes on cash and cash equivalents | (0.2) | 0.4 |
Net change in cash and cash equivalents during the period | 17 | 1.6 |
Cash and cash equivalents at beginning of period | 35.1 | 33 |
Cash and cash equivalents at end of period | 52.1 | 34.6 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 45.6 | 40.8 |
Cash paid for income taxes, net | 10.1 | 10.8 |
Supplemental disclosure of non-cash investing activity: | ||
Purchases of rental equipment in accounts payable | 7.2 | 63.9 |
Non-rental capital expenditures in accounts payable | 18.4 | 0 |
Supplemental disclosure of non-cash investing and financing activity: | ||
Equipment acquired through finance lease | $ 7.1 | $ 0.3 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Herc Holdings Inc. ("we," "us," "our," "Herc Holdings," or "the Company") is one of the leading equipment rental suppliers with 333 locations in North America as of June 30, 2022. The Company conducts substantially all of its operations through subsidiaries, including Herc Rentals Inc. ("Herc"). With over 56 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®, its industry-specific solutions-based services, which includes power generation, climate control, remediation and restoration, pumps, trench shoring, studio and production equipment, and its ProContractor professional grade tools. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies 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, 2021, filed with the SEC on February 10, 2022. 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, valuation of acquired intangible assets, 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 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 As of July 21, 2022, the Company has implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect. There were no new standards or updates during the three or six months ended June 30, 2022 that had a material impact on the condensed consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
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 operates in North America with revenue from the United States representing approximately 91.2% and 91.3% of total revenue for the three and six months ended June 30, 2022, respectively, compared to 91.6% and 91.9% for the same periods in 2021. The Company’s rental transactions are accounted for under Accounting Standards Codification ("ASC") Topic 842, Leases ("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 summarize the applicable accounting guidance for the Company’s revenues for the three and six months ended June 30, 2022 and 2021 (in millions): Three Months Ended June 30, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 541.3 $ — $ 541.3 $ 405.4 $ — $ 405.4 Other rental revenue: Delivery and pick-up — 40.8 40.8 — 25.6 25.6 Other 23.3 — 23.3 17.0 — 17.0 Total other rental revenues 23.3 40.8 64.1 17.0 25.6 42.6 Total equipment rental 564.6 40.8 605.4 422.4 25.6 448.0 Sales of rental equipment — 19.3 19.3 — 30.3 30.3 Sales of new equipment, parts and supplies — 9.4 9.4 — 7.8 7.8 Service and other revenues — 6.3 6.3 — 4.8 4.8 Total revenues $ 564.6 $ 75.8 $ 640.4 $ 422.4 $ 68.5 $ 490.9 Six Months Ended June 30, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 1,017.8 $ — $ 1,017.8 $ 770.2 $ — $ 770.2 Other rental revenue: Delivery and pick-up — 71.3 71.3 — 46.5 46.5 Other 43.1 — 43.1 31.7 — 31.7 Total other rental revenues 43.1 71.3 114.4 31.7 46.5 78.2 Total equipment rental 1,060.9 71.3 1,132.2 801.9 46.5 848.4 Sales of rental equipment — 47.0 47.0 — 74.5 74.5 Sales of new equipment, parts and supplies — 17.1 17.1 — 13.9 13.9 Service and other revenues — 11.4 11.4 — 7.9 7.9 Total revenues $ 1,060.9 $ 146.8 $ 1,207.7 $ 801.9 $ 142.8 $ 944.7 Topic 842 revenues Equipment Rental Revenue The Company offers a broad portfolio of equipment for rent on a hourly, daily, weekly or monthly basis, with substantially all rental agreements cancellable 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 June 30, Six Months Ended June 30, 2022 2021 2022 2021 Sales of rental equipment $ 19.3 $ 30.3 $ 47.0 $ 74.5 Sales of new equipment 2.5 1.8 4.3 3.7 Sales of parts and supplies 6.9 6.0 12.8 10.2 Total $ 28.7 $ 38.1 $ 64.1 $ 88.4 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 $6.5 million and $11.1 million as of June 30, 2022 and December 31, 2021, 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, equipment and safety 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 and six months ended June 30, 2022 and 2021 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 and six months ended June 30, 2022 and 2021 was not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of June 30, 2022. 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. |
Rental Equipment
Rental Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Rental Equipment [Abstract] | |
Rental Equipment | Rental Equipment Rental equipment consists of the following (in millions): June 30, 2022 December 31, 2021 Rental equipment $ 4,879.4 $ 4,254.8 Less: Accumulated depreciation (1,763.5) (1,589.5) Rental equipment, net $ 3,115.9 $ 2,665.3 |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations 2022 Business Combinations On April 19, 2022, the Company completed the acquisition of substantially all of the assets of Cloverdale Equipment Company ("Cloverdale"). Cloverdale was a full-service general equipment rental company comprising of approximately 120 employees and four locations serving industrial and construction customers with core operations in the metropolitan areas of Detroit and Grand Rapids, Michigan; Cleveland, Ohio; and Pittsburgh, Pennsylvania. The aggregate consideration was approximately $178.2 million. The acquisition and related fees and expenses were funded through available cash and drawings on the senior secured asset-based revolving credit facility. The following table summarizes the purchase price allocation of the assets acquired and liabilities assumed (in millions): Cloverdale Accounts receivable $ 7.6 Other current assets 1.7 Rental equipment 125.2 Property and equipment 4.2 Intangibles (a) 10.9 Total identifiable assets acquired 149.6 Current liabilities 2.0 Net identifiable assets acquired 147.6 Goodwill (b) 30.6 Net assets acquired $ 178.2 (a) The following table reflects the fair values and useful lives of the acquired intangible assets identified (in millions): Cloverdale Life (years) Customer relationships $ 10.2 10 Non-compete agreements 0.7 5 $ 10.9 (b) The level of goodwill that resulted from the acquisitions is primarily reflective of operational synergies that the Company expects to achieve that are not associated with identifiable assets, the value of Cloverdale's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes. The assets and liabilities for Cloverdale were recorded as of April 19, 2022 and the results of operations have been included in the Company's consolidated results of operations since that date. Total revenue and income before taxes for Cloverdale included in the consolidated statement of operations since the acquisition date are $11.9 million and $1.8 million, respectively. In addition to the acquisition of Cloverdale, the Company completed the acquisitions of three companies, totaling 3 locations including Southern Equipment Rental, Harris Diversified, LLC, and Kilowatt Boy, Inc. during the first quarter of 2022 and five companies totaling 5 locations including All Trade Rentals, Inc., Absolute Rental & Supply, Inc., Single Source Rentals Ltd., Kropp Equipment, Inc., and Colvin's Inc. during the second quarter of 2022. 2021 Business Combinations On August 30, 2021, the Company completed the acquisition of substantially all of the assets of Contractors Building Supply Co. LLC ("CBS"). CBS was a full-service general equipment rental company comprising approximately 190 employees and twelve locations serving construction and industrial customers throughout Texas, as well as a location in New Mexico and Tennessee. The acquisition expanded the Company's presence in Texas to 38 physical locations, which collectively provide general and specialty equipment rental solutions and related services. The aggregate consideration was approximately $190.3 million. The acquisition and related fees and expenses were funded through available cash and drawings on the senior secured asset-based revolving credit facility. On November 15, 2021, the Company completed the acquisition of substantially all of the assets of Rapid Equipment Rental Limited ("Rapid"). Rapid was a full-service general equipment rental company comprising approximately 110 employees and seven locations serving construction and industrial customers throughout the Greater Toronto Area. The aggregate consideration was approximately $75.4 million and is subject to a potential working capital adjustment. The acquisition and related fees and expenses were funded through available cash and drawings on the senior secured asset-based revolving credit facility. There have been no material adjustments to the purchase price allocations of CBS or Rapid during the six months ended June 30, 2022. Throughout 2021, the Company also completed the acquisitions of nine additional companies, totaling 14 locations, which included San Mateo Rentals and Jim-N-I Rentals, Inc., Dwight Crane Ltd. along with its U.S. based affiliate, LRX LLC, Reliable Equipment, LLC, SkyKing Lift, Inc., Atlantic Aerial Inc., Central Valley Shoring, Inc., Priority Rental LLC and Temp-Power, Inc. Pro Forma Supplementary Data The unaudited pro forma supplementary data presented in the table below (in millions) gives effect to the acquisitions of Cloverdale, CBS, and Rapid as if they had been included in the Company's condensed consolidated results for the entire period reflected. The unaudited pro forma supplementary data is provided for informational purposes only and is not indicative of the Company's results of operations had the acquisitions been included for the periods present, nor is it indicative of the Company's future results. Three Months Ended June 30, 2022 Herc Cloverdale Total Historic/pro forma total revenues $ 640.4 $ 2.6 643.0 Historic/combined pretax income $ 97.5 1.6 99.1 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 0.4 0.4 Intangible asset amortization (b) (0.4) (0.4) Interest expense (c) (0.2) (0.2) Elimination of historic interest (d) 0.1 0.1 Elimination of merger related costs (e) 0.1 0.1 Pro forma pretax income $ 99.1 Six Months Ended June 30, 2022 Herc Cloverdale Total Historic/pro forma total revenues $ 1,207.7 $ 18.4 1,226.1 Historic/combined pretax income $ 164.6 11.4 176.0 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 2.2 2.2 Intangible asset amortization (b) (0.4) (0.4) Interest expense (c) (1.0) (1.0) Elimination of historic interest (d) 0.9 0.9 Elimination of merger related costs (e) 0.6 0.6 Pro forma pretax income $ 178.3 Three Months Ended June 30, 2021 Herc CBS Rapid Cloverdale Total Historic/pro forma total revenues $ 490.9 $ 16.1 $ 6.3 $ 14.7 $ 528.0 Historic/combined pretax income $ 61.8 2.4 (3.1) 3.9 65.0 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 1.1 (1.0) 2.1 2.2 Intangible asset amortization (b) (1.2) (0.4) (0.3) (1.9) Interest expense (c) (0.6) (0.3) (0.6) (1.5) Elimination of historic interest (d) 0.4 0.3 0.2 0.9 Elimination of merger related costs (e) 0.1 0.1 — 0.2 Pro forma pretax income $ 64.9 Six Months Ended June 30, 2021 Herc CBS Rapid Cloverdale Total Historic/pro forma total revenues $ 944.7 $ 32.2 $ 12.0 $ 28.4 $ 1,017.3 Historic/combined pretax income $ 102.9 4.8 (1.2) 5.1 111.6 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 2.0 (2.0) 2.9 2.9 Intangible asset amortization (b) (2.5) (0.9) (0.7) (4.1) Interest expense (c) (1.2) (0.6) (1.2) (3.0) Elimination of historic interest (d) 0.8 0.6 0.5 1.9 Elimination of merger related costs (e) 0.2 0.2 — 0.4 Pro forma pretax income $ 109.7 (a) Depreciation of rental equipment was adjusted for the fair value at acquisition and changes in useful lives of equipment acquired. (b) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets. (c) As discussed above, the Company funded the Cloverdale, CBS and Rapid acquisitions primarily using drawings on its senior secured asset-based revolving credit facility . Interest expense was adjusted to reflect interest on such borrowings. (d) Historic interest on debt that is not part of the combined entity was eliminated. (e) Merger related direct costs primarily comprised of financial and legal advisory fees associated with the Cloverdale, CBS and Rapid acquisitions were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The following summarizes the Company's goodwill (in millions): June 30, 2022 December 31, 2021 Balance at the beginning of the period: Goodwill $ 906.5 $ 775.4 Accumulated impairment losses (675.0) (674.9) 231.5 100.5 Additions 94.6 131.1 Currency translation (0.6) (0.1) Balance at the end of the period: Goodwill 998.9 906.5 Accumulated impairment losses (673.4) (675.0) $ 325.5 $ 231.5 Intangible Assets Intangible assets, net, consisted of the following major classes (in millions): June 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 150.2 $ (24.4) $ 125.8 Internally developed software (a) 53.9 (34.1) 19.8 Total 204.1 (58.5) 145.6 Indefinite-lived intangible assets: Trade name 270.3 — 270.3 Total intangible assets, net $ 474.4 $ (58.5) $ 415.9 (a) Includes capitalized costs of $10.1 million yet to be placed into service. December 31, 2021 Gross Carrying Accumulated Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 113.7 $ (15.0) $ 98.7 Internally developed software (a) 49.6 (30.5) 19.1 Total 163.3 (45.5) 117.8 Indefinite-lived intangible assets: Trade name 270.9 — 270.9 Total intangible assets, net $ 434.2 $ (45.5) $ 388.7 (a) Includes capitalized costs of $7.4 million yet to be placed into service. Amortization of intangible assets was $7.1 million and $13.0 million for the three and six months ended June 30, 2022, respectively, and $2.5 million and $4.9 million for the three and six months ended June 30, 2021, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases real estate, office equipment and service vehicles. The Company's leases have remaining lease terms of up to 17 years, some of which include options to extend the leases for up to 20 years. The Company determines the lease term used to record each lease by including 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 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 June 30, Six Months Ended June 30, Classification 2022 2021 2022 2021 Operating lease cost (a) Direct operating $ 34.9 $ 27.6 $ 66.3 $ 51.4 Finance lease cost: Amortization of ROU assets Depreciation and amortization (b) 5.4 2.9 10.2 5.2 Interest on lease liabilities Interest expense, net 0.3 0.3 0.7 0.6 Sublease income Equipment rental revenue (21.3) (18.6) (39.5) (32.0) Net lease cost $ 19.3 $ 12.2 $ 37.7 $ 25.2 (a) Includes short-term leases of $17.4 million and $32.7 million for the three and six months ended June 30, 2022, respectively, and $13.7 million and $22.5 million for the three and six months ended June 30, 2021, respectively, and variable lease costs of $0.6 million and $1.3 million for the three and six months ended June 30, 2022, respectively, and $0.8 million and $2.5 million for the three and six months ended June 30, 2021, respectively. (b) Depreciation and amortization are included with selling, general and administrative expense. |
Leases | Leases The Company leases real estate, office equipment and service vehicles. The Company's leases have remaining lease terms of up to 17 years, some of which include options to extend the leases for up to 20 years. The Company determines the lease term used to record each lease by including 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 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 June 30, Six Months Ended June 30, Classification 2022 2021 2022 2021 Operating lease cost (a) Direct operating $ 34.9 $ 27.6 $ 66.3 $ 51.4 Finance lease cost: Amortization of ROU assets Depreciation and amortization (b) 5.4 2.9 10.2 5.2 Interest on lease liabilities Interest expense, net 0.3 0.3 0.7 0.6 Sublease income Equipment rental revenue (21.3) (18.6) (39.5) (32.0) Net lease cost $ 19.3 $ 12.2 $ 37.7 $ 25.2 (a) Includes short-term leases of $17.4 million and $32.7 million for the three and six months ended June 30, 2022, respectively, and $13.7 million and $22.5 million for the three and six months ended June 30, 2021, respectively, and variable lease costs of $0.6 million and $1.3 million for the three and six months ended June 30, 2022, respectively, and $0.8 million and $2.5 million for the three and six months ended June 30, 2021, respectively. (b) Depreciation and amortization are included with selling, general and administrative expense. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at June 30, 2022 Weighted Average Stated Interest Rate at June 30, 2022 Fixed or Floating Interest Rate Maturity June 30, 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 2.65% Floating 2024 1,016.1 456.0 AR Facility N/A 2.18% Floating 2022 250.0 225.0 Finance lease liabilities 2.89% N/A Fixed 2022-2029 53.9 52.6 Unamortized Debt Issuance Costs (a) (5.7) (6.1) Total debt 2,514.3 1,927.5 Less: Current maturities of long-term debt (11.0) (11.4) Long-term debt, net $ 2,503.3 $ 1,916.1 (a) Unamortized debt issuance costs totaling $4.1 million and $5.0 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of June 30, 2022 and December 31, 2021, 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 is payable semi-annually in arrears on January 15 and July 15. The 2027 Notes will mature on July 15, 2027. Additional information about the 2027 Notes is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. 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 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. On July 5, 2022, the Company entered into an amendment of the ABL Credit Facility, see Note 17, "Subsequent Event" for further information. Accounts Receivable Securitization Facility In September 2018, the Company entered into an accounts receivable securitization facility (the "AR Facility"). The AR Facility was amended in August 2021 to extend the maturity date to August 31, 2022 and increase the aggregate commitments from $175 million to $200 million. In October 2021, the Company increased the aggregate commitments to $225 million and, in January 2022, further increased the aggregate commitments to $250 million. 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. Borrowing Capacity and Availability After outstanding borrowings, the following was available to the Company under the ABL Credit Facility and AR Facility as of June 30, 2022 (in millions): Remaining Availability Under ABL Credit Facility $ 709.1 $ 709.1 AR Facility — — Total $ 709.1 $ 709.1 Letters of Credit As of June 30, 2022, $24.8 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $225.2 million available under the letter of credit facility sublimit, subject to borrowing base restrictions. |
Financing Obligations
Financing Obligations | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Financing Obligations | Financing Obligations In October 2017, Herc consummated a sale-leaseback transaction pursuant to which it sold 42 of its properties located in the U.S. for gross proceeds of approximately $119.5 million, and during the fourth quarter of 2018, entered into sale-leaseback transactions with respect to two additional properties for gross proceeds of $6.4 million. 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 June 30, 2022 Maturities June 30, 2022 December 31, 2021 Financing obligations 5.21% 2026-2038 $ 115.2 $ 117.2 Unamortized financing issuance costs (2.1) (2.2) Total financing obligations 113.1 115.0 Less: Current maturities of financing obligations (3.9) (3.8) Financing obligations, net $ 109.2 $ 111.2 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax provision was $25.3 million for the three months ended June 30, 2022 compared to $14.7 million in 2021. The increase in provision was driven by the level of pre-tax income, offset primarily by certain non-deductible expenses. Income tax provision for the six months ended June 30, 2022 was $33.9 million compared to $22.9 million in 2021. The provision was driven by the level of pre-tax income, offset primarily by a benefit related to stock-based compensation of $8.1 million for six months ended June 30, 2022, compared to $3.2 million for the six months ended June 30, 2021, and certain non-deductible expenses. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2022 | |
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 six months ended June 30, 2022 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ (12.3) $ (87.9) $ (100.2) Other comprehensive income before reclassification (0.7) (4.3) (5.0) Amounts reclassified from accumulated other comprehensive income 0.3 — 0.3 Net current period other comprehensive income (0.4) (4.3) (4.7) Balance at June 30, 2022 $ (12.7) $ (92.2) $ (104.9) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings 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 (agreements and defined terms are discussed in Note 16, "Arrangements with New Hertz"), the Company has assumed the liability for, and control of, all pending and threatened legal matters related to its equipment rental business and related assets, as well as assumed or retained liabilities, and will indemnify New Hertz for any liability arising out of or resulting from such assumed legal matters. The separation and distribution agreement also provides for certain liabilities to be shared by the parties. The Company is responsible for a portion of these shared liabilities (typically 15%), as set forth in that agreement. New Hertz is responsible for managing the settlement or other disposition of such shared liabilities. Pursuant to the tax matters agreement, the Company has agreed to indemnify New Hertz for any resulting taxes and related losses if the Company takes or fails to take any action (or permits any of its affiliates to take or fail to take any action) that causes the Spin-Off and related transactions to be taxable, or if there is an acquisition of the equity securities or assets of the Company or of any member of the Company’s group that causes the Spin-Off and related transactions to be taxable. Guarantee |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 or December 31, 2021. Debt Obligations The fair values of the Company's ABL Credit Facility, AR Facility and finance lease liabilities approximated their book values as of June 30, 2022 and December 31, 2021. 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). June 30, 2022 December 31, 2021 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value 2027 Notes $ 1,200.0 $ 1,098.0 $ 1,200.0 $ 1,248.0 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share has been computed based upon the weighted average number of common shares outstanding. Diluted earnings 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 per share (in millions, except per share data). Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic and diluted earnings per share: Numerator: Net income, basic and diluted $ 72.2 $ 47.1 $ 130.7 $ 80.0 Denominator: Basic weighted average common shares 29.8 29.6 29.8 29.5 Stock options, RSUs and PSUs 0.5 0.8 0.6 0.8 Weighted average shares used to calculate diluted earnings per share 30.3 30.4 30.4 30.3 Earnings per share: Basic $ 2.42 $ 1.59 $ 4.39 $ 2.71 Diluted $ 2.38 $ 1.55 $ 4.30 $ 2.64 Antidilutive stock options, RSUs and PSUs 0.2 — 0.1 — |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
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 Hunter C. Gary, Steven D. Miller and Andrew Teno (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 to the Company’s Board. 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. 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"). 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. |
Arrangements with New Hertz
Arrangements with New Hertz | 6 Months Ended |
Jun. 30, 2022 | |
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 Hunter C. Gary, Steven D. Miller and Andrew Teno (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 to the Company’s Board. 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. 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"). 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. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventOn July 5, 2022, Herc Holdings, Herc and certain other subsidiaries of Herc Holdings entered into an amendment (the “First Amendment”) to the ABL Credit Facility. The First Amendment was executed primarily to increase the aggregate amount of the revolving credit commitments to $3.5 billion and to extend the maturity date of the ABL Credit Facility to July 5, 2027. In addition, (i) the provisions of the ABL Credit Facility regarding interest on revolving loans were amended to replace LIBOR-based rates with rates based on Term SOFR with regard to loans denominated in U.S. dollars and to make certain associated changes; and (ii) certain of the operational and restrictive covenants and other terms and conditions of the ABL Facility were modified to provide the Company and its subsidiaries increased flexibility and permissions thereunder.A new section was added to the ABL Credit Facility to provide that the Company, in consultation with a Sustainability Coordinator, may establish key performance indicators (“KPIs”) with respect to certain environmental, social and governance targets of the Company and its subsidiaries, which if mutually agreed, may be incorporated into the ABL Credit Facility through an amendment (an “ESG Amendment”). Upon the effectiveness of an ESG Amendment, the commitment fee and the spreads applicable to revolving loans may be increased or decreased within certain limits based on performance against the KPIs. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
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, 2021, filed with the SEC on February 10, 2022. 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. |
Principles of Consolidation | Principles of ConsolidationThe 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 investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements As of July 21, 2022, the Company has implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect. There were no new standards or updates during the three or six months ended June 30, 2022 that had a material impact on the condensed consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | The following tables summarize the applicable accounting guidance for the Company’s revenues for the three and six months ended June 30, 2022 and 2021 (in millions): Three Months Ended June 30, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 541.3 $ — $ 541.3 $ 405.4 $ — $ 405.4 Other rental revenue: Delivery and pick-up — 40.8 40.8 — 25.6 25.6 Other 23.3 — 23.3 17.0 — 17.0 Total other rental revenues 23.3 40.8 64.1 17.0 25.6 42.6 Total equipment rental 564.6 40.8 605.4 422.4 25.6 448.0 Sales of rental equipment — 19.3 19.3 — 30.3 30.3 Sales of new equipment, parts and supplies — 9.4 9.4 — 7.8 7.8 Service and other revenues — 6.3 6.3 — 4.8 4.8 Total revenues $ 564.6 $ 75.8 $ 640.4 $ 422.4 $ 68.5 $ 490.9 Six Months Ended June 30, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Equipment rental $ 1,017.8 $ — $ 1,017.8 $ 770.2 $ — $ 770.2 Other rental revenue: Delivery and pick-up — 71.3 71.3 — 46.5 46.5 Other 43.1 — 43.1 31.7 — 31.7 Total other rental revenues 43.1 71.3 114.4 31.7 46.5 78.2 Total equipment rental 1,060.9 71.3 1,132.2 801.9 46.5 848.4 Sales of rental equipment — 47.0 47.0 — 74.5 74.5 Sales of new equipment, parts and supplies — 17.1 17.1 — 13.9 13.9 Service and other revenues — 11.4 11.4 — 7.9 7.9 Total revenues $ 1,060.9 $ 146.8 $ 1,207.7 $ 801.9 $ 142.8 $ 944.7 |
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 June 30, Six Months Ended June 30, 2022 2021 2022 2021 Sales of rental equipment $ 19.3 $ 30.3 $ 47.0 $ 74.5 Sales of new equipment 2.5 1.8 4.3 3.7 Sales of parts and supplies 6.9 6.0 12.8 10.2 Total $ 28.7 $ 38.1 $ 64.1 $ 88.4 |
Rental Equipment (Tables)
Rental Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Rental Equipment [Abstract] | |
Schedule of Rental Equipment | Rental equipment consists of the following (in millions): June 30, 2022 December 31, 2021 Rental equipment $ 4,879.4 $ 4,254.8 Less: Accumulated depreciation (1,763.5) (1,589.5) Rental equipment, net $ 3,115.9 $ 2,665.3 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation of the assets acquired and liabilities assumed (in millions): Cloverdale Accounts receivable $ 7.6 Other current assets 1.7 Rental equipment 125.2 Property and equipment 4.2 Intangibles (a) 10.9 Total identifiable assets acquired 149.6 Current liabilities 2.0 Net identifiable assets acquired 147.6 Goodwill (b) 30.6 Net assets acquired $ 178.2 (a) The following table reflects the fair values and useful lives of the acquired intangible assets identified (in millions): Cloverdale Life (years) Customer relationships $ 10.2 10 Non-compete agreements 0.7 5 $ 10.9 (b) The level of goodwill that resulted from the acquisitions is primarily reflective of operational synergies that the Company expects to achieve that are not associated with identifiable assets, the value of Cloverdale's assembled workforce and new customer relationships expected to arise from the acquisition. All of the goodwill is expected to be deductible for income tax purposes. |
Schedule of Business Acquisition, Pro Forma Information | Three Months Ended June 30, 2022 Herc Cloverdale Total Historic/pro forma total revenues $ 640.4 $ 2.6 643.0 Historic/combined pretax income $ 97.5 1.6 99.1 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 0.4 0.4 Intangible asset amortization (b) (0.4) (0.4) Interest expense (c) (0.2) (0.2) Elimination of historic interest (d) 0.1 0.1 Elimination of merger related costs (e) 0.1 0.1 Pro forma pretax income $ 99.1 Six Months Ended June 30, 2022 Herc Cloverdale Total Historic/pro forma total revenues $ 1,207.7 $ 18.4 1,226.1 Historic/combined pretax income $ 164.6 11.4 176.0 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 2.2 2.2 Intangible asset amortization (b) (0.4) (0.4) Interest expense (c) (1.0) (1.0) Elimination of historic interest (d) 0.9 0.9 Elimination of merger related costs (e) 0.6 0.6 Pro forma pretax income $ 178.3 Three Months Ended June 30, 2021 Herc CBS Rapid Cloverdale Total Historic/pro forma total revenues $ 490.9 $ 16.1 $ 6.3 $ 14.7 $ 528.0 Historic/combined pretax income $ 61.8 2.4 (3.1) 3.9 65.0 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 1.1 (1.0) 2.1 2.2 Intangible asset amortization (b) (1.2) (0.4) (0.3) (1.9) Interest expense (c) (0.6) (0.3) (0.6) (1.5) Elimination of historic interest (d) 0.4 0.3 0.2 0.9 Elimination of merger related costs (e) 0.1 0.1 — 0.2 Pro forma pretax income $ 64.9 Six Months Ended June 30, 2021 Herc CBS Rapid Cloverdale Total Historic/pro forma total revenues $ 944.7 $ 32.2 $ 12.0 $ 28.4 $ 1,017.3 Historic/combined pretax income $ 102.9 4.8 (1.2) 5.1 111.6 Pro forma adjustments to consolidated pretax income: Impact of fair value adjustments/useful life changes on depreciation (a) 2.0 (2.0) 2.9 2.9 Intangible asset amortization (b) (2.5) (0.9) (0.7) (4.1) Interest expense (c) (1.2) (0.6) (1.2) (3.0) Elimination of historic interest (d) 0.8 0.6 0.5 1.9 Elimination of merger related costs (e) 0.2 0.2 — 0.4 Pro forma pretax income $ 109.7 (a) Depreciation of rental equipment was adjusted for the fair value at acquisition and changes in useful lives of equipment acquired. (b) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets. (c) As discussed above, the Company funded the Cloverdale, CBS and Rapid acquisitions primarily using drawings on its senior secured asset-based revolving credit facility . Interest expense was adjusted to reflect interest on such borrowings. (d) Historic interest on debt that is not part of the combined entity was eliminated. (e) Merger related direct costs primarily comprised of financial and legal advisory fees associated with the Cloverdale, CBS and Rapid acquisitions were eliminated as they were assumed to have been recognized prior to the pro forma acquisition date. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following summarizes the Company's goodwill (in millions): June 30, 2022 December 31, 2021 Balance at the beginning of the period: Goodwill $ 906.5 $ 775.4 Accumulated impairment losses (675.0) (674.9) 231.5 100.5 Additions 94.6 131.1 Currency translation (0.6) (0.1) Balance at the end of the period: Goodwill 998.9 906.5 Accumulated impairment losses (673.4) (675.0) $ 325.5 $ 231.5 |
Intangible Assets, Net (Finite Lived) | Intangible assets, net, consisted of the following major classes (in millions): June 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 150.2 $ (24.4) $ 125.8 Internally developed software (a) 53.9 (34.1) 19.8 Total 204.1 (58.5) 145.6 Indefinite-lived intangible assets: Trade name 270.3 — 270.3 Total intangible assets, net $ 474.4 $ (58.5) $ 415.9 (a) Includes capitalized costs of $10.1 million yet to be placed into service. December 31, 2021 Gross Carrying Accumulated Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 113.7 $ (15.0) $ 98.7 Internally developed software (a) 49.6 (30.5) 19.1 Total 163.3 (45.5) 117.8 Indefinite-lived intangible assets: Trade name 270.9 — 270.9 Total intangible assets, net $ 434.2 $ (45.5) $ 388.7 |
Intangible Assets, Net (Indefinite-Lived) | Intangible assets, net, consisted of the following major classes (in millions): June 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 150.2 $ (24.4) $ 125.8 Internally developed software (a) 53.9 (34.1) 19.8 Total 204.1 (58.5) 145.6 Indefinite-lived intangible assets: Trade name 270.3 — 270.3 Total intangible assets, net $ 474.4 $ (58.5) $ 415.9 (a) Includes capitalized costs of $10.1 million yet to be placed into service. December 31, 2021 Gross Carrying Accumulated Net Carrying Value Finite-lived intangible assets: Customer-related and non-compete agreements $ 113.7 $ (15.0) $ 98.7 Internally developed software (a) 49.6 (30.5) 19.1 Total 163.3 (45.5) 117.8 Indefinite-lived intangible assets: Trade name 270.9 — 270.9 Total intangible assets, net $ 434.2 $ (45.5) $ 388.7 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense consist of the following (in millions): Three Months Ended June 30, Six Months Ended June 30, Classification 2022 2021 2022 2021 Operating lease cost (a) Direct operating $ 34.9 $ 27.6 $ 66.3 $ 51.4 Finance lease cost: Amortization of ROU assets Depreciation and amortization (b) 5.4 2.9 10.2 5.2 Interest on lease liabilities Interest expense, net 0.3 0.3 0.7 0.6 Sublease income Equipment rental revenue (21.3) (18.6) (39.5) (32.0) Net lease cost $ 19.3 $ 12.2 $ 37.7 $ 25.2 (a) Includes short-term leases of $17.4 million and $32.7 million for the three and six months ended June 30, 2022, respectively, and $13.7 million and $22.5 million for the three and six months ended June 30, 2021, respectively, and variable lease costs of $0.6 million and $1.3 million for the three and six months ended June 30, 2022, respectively, and $0.8 million and $2.5 million for the three and six months ended June 30, 2021, respectively. (b) Depreciation and amortization are included with selling, general and administrative expense. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt consists of the following (in millions): Weighted Average Effective Interest Rate at June 30, 2022 Weighted Average Stated Interest Rate at June 30, 2022 Fixed or Floating Interest Rate Maturity June 30, 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 2.65% Floating 2024 1,016.1 456.0 AR Facility N/A 2.18% Floating 2022 250.0 225.0 Finance lease liabilities 2.89% N/A Fixed 2022-2029 53.9 52.6 Unamortized Debt Issuance Costs (a) (5.7) (6.1) Total debt 2,514.3 1,927.5 Less: Current maturities of long-term debt (11.0) (11.4) Long-term debt, net $ 2,503.3 $ 1,916.1 (a) Unamortized debt issuance costs totaling $4.1 million and $5.0 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of June 30, 2022 and December 31, 2021, 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 June 30, 2022 (in millions): Remaining Availability Under ABL Credit Facility $ 709.1 $ 709.1 AR Facility — — Total $ 709.1 $ 709.1 |
Financing Obligations (Tables)
Financing Obligations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of Financing Obligations, Net | The Company's financing obligations consist of the following (in millions): Weighted Average Effective Interest Rate at June 30, 2022 Maturities June 30, 2022 December 31, 2021 Financing obligations 5.21% 2026-2038 $ 115.2 $ 117.2 Unamortized financing issuance costs (2.1) (2.2) Total financing obligations 113.1 115.0 Less: Current maturities of financing obligations (3.9) (3.8) Financing obligations, net $ 109.2 $ 111.2 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 six months ended June 30, 2022 are presented in the table below (in millions). Pension and Other Post-Employment Benefits Foreign Currency Items Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ (12.3) $ (87.9) $ (100.2) Other comprehensive income before reclassification (0.7) (4.3) (5.0) Amounts reclassified from accumulated other comprehensive income 0.3 — 0.3 Net current period other comprehensive income (0.4) (4.3) (4.7) Balance at June 30, 2022 $ (12.7) $ (92.2) $ (104.9) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Debt | 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). June 30, 2022 December 31, 2021 Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value 2027 Notes $ 1,200.0 $ 1,098.0 $ 1,200.0 $ 1,248.0 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share (in millions, except per share data). Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic and diluted earnings per share: Numerator: Net income, basic and diluted $ 72.2 $ 47.1 $ 130.7 $ 80.0 Denominator: Basic weighted average common shares 29.8 29.6 29.8 29.5 Stock options, RSUs and PSUs 0.5 0.8 0.6 0.8 Weighted average shares used to calculate diluted earnings per share 30.3 30.4 30.4 30.3 Earnings per share: Basic $ 2.42 $ 1.59 $ 4.39 $ 2.71 Diluted $ 2.38 $ 1.55 $ 4.30 $ 2.64 Antidilutive stock options, RSUs and PSUs 0.2 — 0.1 — |
Organization and Description _2
Organization and Description of Business (Details) | 6 Months Ended |
Jun. 30, 2022 location | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company owned locations | 333 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Contract with customer, asset, after allowance for credit loss, current | $ 6.5 | $ 6.5 | $ 11.1 | ||
UNITED STATES | Geographic Concentration Risk | Revenue Benchmark | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 91.20% | 91.60% | 91.30% | 91.90% |
Revenue Recognition - Applicabl
Revenue Recognition - Applicable Accounting Guidance for Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Equipment rental | $ 541.3 | $ 405.4 | $ 1,017.8 | $ 770.2 |
Total other rental revenues | 64.1 | 42.6 | 114.4 | 78.2 |
Total equipment rental | 605.4 | 448 | 1,132.2 | 848.4 |
Sales of rental equipment | 19.3 | 30.3 | 47 | 74.5 |
Sales of new equipment, parts and supplies | 9.4 | 7.8 | 17.1 | 13.9 |
Service and other revenues | 6.3 | 4.8 | 11.4 | 7.9 |
Total revenues | 640.4 | 490.9 | 1,207.7 | 944.7 |
Topic 842 | ||||
Disaggregation of Revenue [Line Items] | ||||
Equipment rental | 541.3 | 405.4 | 1,017.8 | 770.2 |
Total other rental revenues | 23.3 | 17 | 43.1 | 31.7 |
Total equipment rental | 564.6 | 422.4 | 1,060.9 | 801.9 |
Sales of rental equipment | 0 | 0 | 0 | 0 |
Sales of new equipment, parts and supplies | 0 | 0 | 0 | 0 |
Service and other revenues | 0 | 0 | 0 | 0 |
Total revenues | 564.6 | 422.4 | 1,060.9 | 801.9 |
Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Equipment rental | 0 | 0 | 0 | 0 |
Total other rental revenues | 40.8 | 25.6 | 71.3 | 46.5 |
Total equipment rental | 40.8 | 25.6 | 71.3 | 46.5 |
Sales of rental equipment | 19.3 | 30.3 | 47 | 74.5 |
Sales of new equipment, parts and supplies | 9.4 | 7.8 | 17.1 | 13.9 |
Service and other revenues | 6.3 | 4.8 | 11.4 | 7.9 |
Total revenues | 75.8 | 68.5 | 146.8 | 142.8 |
Delivery and pick-up | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | 40.8 | 25.6 | 71.3 | 46.5 |
Delivery and pick-up | Topic 842 | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | 0 | 0 | 0 | 0 |
Delivery and pick-up | Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | 40.8 | 25.6 | 71.3 | 46.5 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | 23.3 | 17 | 43.1 | 31.7 |
Other | Topic 842 | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | 23.3 | 17 | 43.1 | 31.7 |
Other | Topic 606 | ||||
Disaggregation of Revenue [Line Items] | ||||
Total other rental revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Sales of rental equipment | $ 19.3 | $ 30.3 | $ 47 | $ 74.5 |
Sales of new equipment | 2.5 | 1.8 | 4.3 | 3.7 |
Sales of parts and supplies | 6.9 | 6 | 12.8 | 10.2 |
Total | $ 28.7 | $ 38.1 | $ 64.1 | $ 88.4 |
Rental Equipment- Revenue Earni
Rental Equipment- Revenue Earning Equipment Components (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Rental Equipment [Abstract] | ||
Rental equipment | $ 4,879.4 | $ 4,254.8 |
Less: Accumulated depreciation | (1,763.5) | (1,589.5) |
Rental equipment, net | $ 3,115.9 | $ 2,665.3 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Apr. 19, 2022 employee property | Apr. 19, 2022 USD ($) employee | Apr. 19, 2022 employee company | Nov. 15, 2021 USD ($) employee property | Aug. 30, 2021 employee property | Mar. 31, 2022 property company | Jun. 30, 2022 USD ($) property location | Dec. 31, 2021 company property | |
Business Acquisition [Line Items] | ||||||||
Company owned locations | location | 333 | |||||||
Cloverdale | ||||||||
Business Acquisition [Line Items] | ||||||||
Entity number of employees | employee | 120 | 120 | 120 | |||||
Company owned locations | 4 | 3 | 5 | |||||
Acquisition price | $ 178.2 | |||||||
Total revenue since acquisition date | 11.9 | |||||||
Earnings since acquisition date | $ 1.8 | |||||||
Number of businesses acquired | 3 | 5 | ||||||
CBS | ||||||||
Business Acquisition [Line Items] | ||||||||
Entity number of employees | employee | 190 | |||||||
Company owned locations | property | 12 | 38 | ||||||
Acquisition price | $ 190.3 | |||||||
Rapid | ||||||||
Business Acquisition [Line Items] | ||||||||
Entity number of employees | employee | 110 | |||||||
Company owned locations | property | 7 | |||||||
Acquisition price | $ 75.4 | |||||||
Series of Individually Immaterial Business Acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Company owned locations | property | 14 | |||||||
Number of businesses acquired | company | 9 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Apr. 19, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 325.5 | $ 231.5 | $ 100.5 | |
Cloverdale | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 7.6 | |||
Other current assets | 1.7 | |||
Rental equipment | 125.2 | |||
Property and equipment | 4.2 | |||
Intangibles | 10.9 | |||
Total identifiable assets acquired | 149.6 | |||
Current liabilities | 2 | |||
Net identifiable assets acquired | 147.6 | |||
Goodwill | 30.6 | |||
Net assets acquired | $ 178.2 |
Business Combinations - Fair Va
Business Combinations - Fair Value and Useful Lives (Details) - Cloverdale $ in Millions | Apr. 19, 2022 USD ($) |
Business Acquisition [Line Items] | |
Finite-lived intangible assets acquired | $ 10.9 |
Customer relationships | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets acquired | $ 10.2 |
Weighted average useful life | 10 years |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets acquired | $ 0.7 |
Weighted average useful life | 5 years |
Business Combinations - Busines
Business Combinations - Business Acquisition, Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Asset Acquisition [Line Items] | ||||
Historic/pro forma total revenues | $ 643 | $ 528 | $ 1,226.1 | $ 1,017.3 |
Historic/combined pretax income | 99.1 | 65 | 176 | 111.6 |
Impact of fair value adjustments/useful life changes on depreciation | 0.4 | 2.2 | 2.2 | 2.9 |
Intangible asset amortization | (0.4) | (1.9) | (0.4) | (4.1) |
Interest expense | (0.2) | (1.5) | (1) | (3) |
Elimination of historic interest | 0.1 | 0.9 | 0.9 | 1.9 |
Elimination of merger related costs | 0.1 | 0.2 | 0.6 | 0.4 |
Pro forma pretax income | 99.1 | 64.9 | 178.3 | 109.7 |
Herc | ||||
Asset Acquisition [Line Items] | ||||
Historic/pro forma total revenues | 640.4 | 490.9 | 1,207.7 | 944.7 |
Historic/combined pretax income | 97.5 | 61.8 | 164.6 | 102.9 |
CBS | ||||
Asset Acquisition [Line Items] | ||||
Historic/pro forma total revenues | 16.1 | 32.2 | ||
Historic/combined pretax income | 2.4 | 4.8 | ||
Impact of fair value adjustments/useful life changes on depreciation | 1.1 | 2 | ||
Intangible asset amortization | (1.2) | (2.5) | ||
Interest expense | (0.6) | (1.2) | ||
Elimination of historic interest | 0.4 | 0.8 | ||
Elimination of merger related costs | 0.1 | 0.2 | ||
Rapid | ||||
Asset Acquisition [Line Items] | ||||
Historic/pro forma total revenues | 6.3 | 12 | ||
Historic/combined pretax income | (3.1) | (1.2) | ||
Impact of fair value adjustments/useful life changes on depreciation | (1) | (2) | ||
Intangible asset amortization | (0.4) | (0.9) | ||
Interest expense | (0.3) | (0.6) | ||
Elimination of historic interest | 0.3 | 0.6 | ||
Elimination of merger related costs | 0.1 | 0.2 | ||
Cloverdale | ||||
Asset Acquisition [Line Items] | ||||
Historic/pro forma total revenues | 2.6 | 14.7 | 18.4 | 28.4 |
Historic/combined pretax income | 1.6 | 3.9 | 11.4 | 5.1 |
Impact of fair value adjustments/useful life changes on depreciation | 0.4 | 2.1 | 2.2 | 2.9 |
Intangible asset amortization | (0.4) | (0.3) | (0.4) | (0.7) |
Interest expense | (0.2) | (0.6) | (1) | (1.2) |
Elimination of historic interest | 0.1 | 0.2 | 0.9 | 0.5 |
Elimination of merger related costs | $ 0.1 | $ 0 | $ 0.6 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, gross at beginning of period | $ 906.5 | $ 775.4 |
Accumulated impairment losses | (675) | (674.9) |
Goodwill, net at beginning of period | 231.5 | 100.5 |
Additions | 94.6 | 131.1 |
Currency translation | (0.6) | (0.1) |
Goodwill, gross at end of period | 998.9 | 906.5 |
Accumulated impairment losses | (673.4) | (675) |
Goodwill, net at end of period | $ 325.5 | $ 231.5 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 204.1 | $ 163.3 |
Accumulated Amortization | (58.5) | (45.5) |
Net Carrying Value | 145.6 | 117.8 |
Total intangible assets, gross | 474.4 | 434.2 |
Total intangible assets, net | 415.9 | 388.7 |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Trade name | 270.3 | 270.9 |
Customer-related and non-compete agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 150.2 | 113.7 |
Accumulated Amortization | (24.4) | (15) |
Net Carrying Value | 125.8 | 98.7 |
Internally developed software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 53.9 | 49.6 |
Accumulated Amortization | (34.1) | (30.5) |
Net Carrying Value | 19.8 | 19.1 |
Software Development | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 10.1 | $ 7.4 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 7.1 | $ 2.5 | $ 13 | $ 4.9 |
Leases - Narrative (Details)
Leases - Narrative (Details) - Maximum | 6 Months Ended |
Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 17 years |
Lessee, finance lease, renewal term | 20 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 34.9 | $ 27.6 | $ 66.3 | $ 51.4 |
Amortization of ROU assets | 5.4 | 2.9 | 10.2 | 5.2 |
Interest on lease liabilities | 0.3 | 0.3 | 0.7 | 0.6 |
Sublease income | (21.3) | (18.6) | (39.5) | (32) |
Net lease cost | 19.3 | 12.2 | 37.7 | 25.2 |
Short-term lease, cost | 17.4 | 13.7 | 32.7 | 22.5 |
Variable lease, cost | $ 0.6 | $ 0.8 | $ 1.3 | $ 2.5 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (5.7) | $ (6.1) |
Total debt | 2,514.3 | 1,927.5 |
Less: Current maturities of long-term debt | (11) | (11.4) |
Long-term debt, net | $ 2,503.3 | 1,916.1 |
Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate, Finance lease liabilities | 2.89% | |
Finance lease liabilities | $ 53.9 | 52.6 |
Senior Notes | 2027 Notes | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at June 30, 2022 | 5.61% | |
Weighted Average Stated Interest Rate at June 30, 2022 | 5.50% | |
Nominal Unpaid Principal Balance | $ 1,200 | 1,200 |
Line of Credit | Revolving Credit Facility | Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted Average Stated Interest Rate at June 30, 2022 | 2.65% | |
Nominal Unpaid Principal Balance | $ 1,016.1 | 456 |
Line of Credit | Revolving Credit Facility | Senior Secured Revolving Credit Facility | Other long-term assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs related to credit facility | $ 4.1 | 5 |
Line of Credit | AR Facility | ||
Debt Instrument [Line Items] | ||
Weighted Average Stated Interest Rate at June 30, 2022 | 2.18% | |
Nominal Unpaid Principal Balance | $ 250 | $ 225 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jun. 30, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | Aug. 31, 2021 | Jul. 31, 2019 | Jul. 09, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | $ 709,100,000 | ||||||
AR Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 250,000,000 | $ 225,000,000 | $ 200,000,000 | $ 175,000,000 | |||
2027 Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 1,200,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 5.50% | ||||||
ABL Credit Facility | Line of Credit | Senior Secured Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 1,750,000,000 | ||||||
ABL Credit Facility | Line of Credit | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Letter of credit outstanding | $ 24,800,000 | ||||||
Line of credit | 0 | ||||||
Remaining borrowing capacity | $ 225,200,000 | ||||||
Revolving Credit Facility | Line of Credit | Senior Secured Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, stated percentage | 2.65% | ||||||
Remaining borrowing capacity | $ 709,100,000 | ||||||
Revolving Credit Facility | Line of Credit | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 250,000,000 |
Debt - Outstanding Borrowings (
Debt - Outstanding Borrowings (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
Remaining Capacity | $ 709.1 |
Availability Under Borrowing Base Limitation | 709.1 |
Line of Credit | ABL Credit Facility | Senior Secured Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Remaining Capacity | 709.1 |
Availability Under Borrowing Base Limitation | 709.1 |
Line of Credit | AR Facility | |
Line of Credit Facility [Line Items] | |
Remaining Capacity | 0 |
Availability Under Borrowing Base Limitation | $ 0 |
Financing Obligations - Narrati
Financing Obligations - Narrative (Details) - Financing Obligation $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2019 USD ($) | Oct. 31, 2017 USD ($) property | Dec. 31, 2018 USD ($) property | |
Debt Instrument [Line Items] | |||
Sale leaseback transaction, number of properties | property | 42 | 2 | |
Sale leaseback transaction, gross proceeds | $ | $ 4.7 | $ 119.5 | $ 6.4 |
Financing Obligations - Obligat
Financing Obligations - Obligations (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less: Current maturities of financing obligations | $ (11) | $ (11.4) |
Financing Obligation | ||
Debt Instrument [Line Items] | ||
Weighted Average Effective Interest Rate at June 30, 2022 | 5.21% | |
Financing obligations | $ 115.2 | 117.2 |
Unamortized financing issuance costs | (2.1) | (2.2) |
Total financing obligations | 113.1 | 115 |
Less: Current maturities of financing obligations | (3.9) | (3.8) |
Financing obligations, net | $ 109.2 | $ 111.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 25.3 | $ 14.7 | $ 33.9 | $ 22.9 |
Benefit related to stock-based compensation | $ 8.1 | $ 3.2 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning | $ 1,011.7 | $ 778 | $ 976.9 | $ 742 |
Other comprehensive income before reclassification | (5) | |||
Amounts reclassified from accumulated other comprehensive income | 0.3 | |||
Total other comprehensive income | (6.6) | 3.5 | (4.7) | 6.3 |
Balance, ending | 1,065.3 | 835.4 | 1,065.3 | 835.4 |
Pension and Other Post-Employment Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning | (12.3) | |||
Other comprehensive income before reclassification | (0.7) | |||
Amounts reclassified from accumulated other comprehensive income | 0.3 | |||
Total other comprehensive income | (0.4) | |||
Balance, ending | (12.7) | (12.7) | ||
Foreign Currency Items | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning | (87.9) | |||
Other comprehensive income before reclassification | (4.3) | |||
Amounts reclassified from accumulated other comprehensive income | 0 | |||
Total other comprehensive income | (4.3) | |||
Balance, ending | (92.2) | (92.2) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning | (98.3) | (104.2) | (100.2) | (107) |
Balance, ending | $ (104.9) | $ (100.7) | $ (104.9) | $ (100.7) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Guarantor obligations, maximum exposure, undiscounted | $ 1.7 |
New Hertz | |
Loss Contingencies [Line Items] | |
Portion of shared liabilities | 15% |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents and investments | $ 0 | $ 0 |
Fair Value Measurements - Borro
Fair Value Measurements - Borrowing Rates (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate Fair Value | $ 1,098 | $ 1,248 |
2027 Notes | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Nominal Unpaid Principal Balance | $ 1,200 | $ 1,200 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||||
Net income | $ 72.2 | $ 58.5 | $ 47.1 | $ 32.9 | $ 130.7 | $ 80 |
Denominator: | ||||||
Basic weighted average common shares (in shares) | 29.8 | 29.6 | 29.8 | 29.5 | ||
Stock options, RSUs and PSUs (in shares) | 0.5 | 0.8 | 0.6 | 0.8 | ||
Weighted average shares used to calculate diluted earnings (loss) per share (in shares) | 30.3 | 30.4 | 30.4 | 30.3 | ||
Earnings per share: | ||||||
Basic (in USD per share) | $ 2.42 | $ 1.59 | $ 4.39 | $ 2.71 | ||
Diluted (in USD per share) | $ 2.38 | $ 1.55 | $ 4.30 | $ 2.64 | ||
Antidilutive stock options, RSUs and PSUs | ||||||
Earnings per share: | ||||||
Antidilutive stock options, RSUs and PSUs (in shares) | 0.2 | 0 | 0.1 | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - Nomination and Standstill Agreement - Icahn Group - shares | 6 Months Ended | |
Sep. 15, 2014 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||
Ownership percentage limit (more than) | 20% | |
Net long position shares held, tranche one (at least) (in shares) | 1,900,000 |
Subsequent Event (Details)
Subsequent Event (Details) | Jul. 05, 2022 USD ($) |
Subsequent Event | ABL Credit Facility | Line of Credit | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ 3,500,000,000 |