Delaware | 001-14387 | 06-1522496 | ||
Delaware | 001-13663 | 86-0933835 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
100 First Stamford Place, Suite 700 | ||
Stamford, Connecticut | 06902 | |
(Address of Principal Executive Offices) | (Zip Code) |
(Former name or former address if changed since last report.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
UNITED RENTALS, INC. | ||
By: | /S/ Craig A. Pintoff | |
Name: Craig A. Pintoff | ||
Title: Senior Vice President and General Counsel | ||
UNITED RENTALS (NORTH AMERICA), INC. | ||
By: | /S/ Craig A. Pintoff | |
Name: Craig A. Pintoff | ||
Title: Senior Vice President and General Counsel |
Exhibit No. | Description | |
99.1 | Press Release of United Rentals, Inc. |
• | Within rental revenue3, owned equipment rental revenue decreased 1.6% year-over-year, reflecting a 2.4% drop in rental rates, offset by an increase of 3.0% in the volume of equipment on rent, which included the adverse impact from currency. |
• | In May and June, month-over-month sequential rates increased 50 basis points and 60 basis points, respectively, representing the first increases in sequential rates in 16 months. The company updated its 2016 outlook for rental rates to reflect a smaller expected year-over-year decrease. |
• | Time utilization increased 90 basis points year-over-year to 67.5%. |
• | Rental revenue generated by the company’s Trench Safety and Power & HVAC specialty businesses, combined, increased by 15% year-over-year, primarily on a same store basis. |
• | The company generated $134 million of proceeds from used equipment sales at a GAAP gross margin of 41.0% and an adjusted gross margin of 47.8%, compared with $124 million at a GAAP gross margin of 45.2% and an adjusted gross margin of 50.0% for the same period last year.4 |
• | In May 2016, the company redeemed all $300 million of its 8 1/4 % Senior Notes and $550 million of its 7 3/8 % Senior Notes, and issued $750 million of 5 7/8 % Senior Notes. In August 2016, the company expects to redeem the remaining $200 million of its 7 3/8 % Senior Notes. The notes redeemed in May, as well as those expected to be redeemed in August, would have matured in 2020 and 2021, and the issued notes will mature in 2026. The company expects annualized interest savings of approximately $30 million as a result of these actions. In June 2016, the company extended the maturity date of its ABL facility to June 2021. |
1. | GAAP net income and diluted earnings per share for the second quarter 2016 and 2015 include debt extinguishment losses of $16 million, or $0.18 per diluted share, and $74 million, or $0.76 per diluted share, respectively. |
2. | Adjusted EPS (earnings per share) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) are non-GAAP measures that exclude the impact of the items noted in the tables below. See the tables below for amounts and reconciliations to the most comparable GAAP measures. |
3. | Total rental revenue decreased 1.3% including the adverse impact from currency. Excluding this impact, rental revenue would have decreased 1.0% year-over-year. |
4. | Used equipment sales adjusted gross margin excludes the impact of the fair value mark-up of acquired RSC fleet that was sold. |
• | Within rental revenue5, owned equipment rental revenue decreased 1.3% year-over-year, reflecting a 2.6% drop in rental rates, offset by an increase of 2.8% in the volume of equipment on rent, which included the adverse impact from currency. |
• | Time utilization increased 40 basis points year-over-year to 65.8%. |
• | Rental revenue generated by the company’s Trench Safety and Power & HVAC specialty businesses, combined, increased by 14% year-over-year, primarily on a same store basis. |
• | Net income was $226 million, or $2.52 per diluted share, compared with $201 million, or $2.04 per diluted share, for the same period last year.6 |
• | Adjusted EBITDA was $1.263 billion and adjusted EBITDA margin was 46.2%, reflecting decreases of $45 million and 150 basis points, respectively, from the same period last year. |
• | The company generated $249 million of proceeds from used equipment sales at a GAAP gross margin of 41.0% and an adjusted gross margin of 48.2%, compared with $240 million at a GAAP gross margin of 45.0% and an adjusted gross margin of 50.4% for the same period last year. |
• | The company generated $1.247 billion of net cash provided by operating activities and $792 million of free cash flow7, compared with $1.250 billion and $432 million, respectively, for the same period last year. Net rental capital spending was $473 million for the first six months of 2016, compared with $776 million for the same period last year. |
5. | Total rental revenue decreased 1.0% including the adverse impact from currency. Excluding this impact, rental revenue would have decreased 0.4% year-over-year. |
6. | GAAP net income and diluted earnings per share for the first six months 2016 and 2015 include debt extinguishment losses of $16 million, or $0.18 per diluted share, and $75 million, or $0.77 per diluted share, respectively. |
7. | Free cash flow is a non-GAAP measure. See the table below for amounts and a reconciliation to the most comparable GAAP measure. |
Prior Outlook | Current Outlook | |||
Total revenue | $5.6 billion to $5.8 billion | $5.6 billion to $5.8 billion | ||
Adjusted EBITDA8 | $2.65 billion to $2.75 billion | $2.65 billion to $2.75 billion | ||
Decrease in rental rates (year-over-year) | (3%) to (4%) | (2%) to (3%) | ||
Time utilization (67.3% in 2015) | Approximately 68.3% | Approximately 68.0% | ||
Net rental capital expenditures after gross purchases | Approximately $700 million, after gross purchases of approximately $1.2 billion | Approximately $650 million to $750 million, after gross purchases of approximately $1.15 billion to $1.25 billion | ||
Net cash provided by operating activities | Not forecasted | $1.6 billion to $1.7 billion | ||
Free cash flow | $900 million to $1.0 billion | $900 million to $1.0 billion |
8. | Information reconciling forward-looking adjusted EBITDA to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. |
9. | When adjusting the denominator of the ROIC calculation to also exclude average goodwill, ROIC was 11.5% for the 12 months ended June 30, 2016, a decrease of 70 basis points from the 12 months ended June 30, 2015. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Equipment rentals | $ | 1,204 | $ | 1,220 | $ | 2,321 | $ | 2,345 | |||||||
Sales of rental equipment | 134 | 124 | 249 | 240 | |||||||||||
Sales of new equipment | 36 | 39 | 66 | 72 | |||||||||||
Contractor supplies sales | 22 | 21 | 41 | 39 | |||||||||||
Service and other revenues | 25 | 25 | 54 | 48 | |||||||||||
Total revenues | 1,421 | 1,429 | 2,731 | 2,744 | |||||||||||
Cost of revenues: | |||||||||||||||
Cost of equipment rentals, excluding depreciation | 456 | 445 | 905 | 889 | |||||||||||
Depreciation of rental equipment | 242 | 240 | 485 | 475 | |||||||||||
Cost of rental equipment sales | 79 | 68 | 147 | 132 | |||||||||||
Cost of new equipment sales | 29 | 33 | 54 | 60 | |||||||||||
Cost of contractor supplies sales | 15 | 15 | 28 | 27 | |||||||||||
Cost of service and other revenues | 10 | 10 | 22 | 19 | |||||||||||
Total cost of revenues | 831 | 811 | 1,641 | 1,602 | |||||||||||
Gross profit | 590 | 618 | 1,090 | 1,142 | |||||||||||
Selling, general and administrative expenses | 177 | 175 | 354 | 356 | |||||||||||
Merger related costs | — | 1 | — | (26 | ) | ||||||||||
Restructuring charge | 2 | — | 4 | 1 | |||||||||||
Non-rental depreciation and amortization | 64 | 67 | 131 | 136 | |||||||||||
Operating income | 347 | 375 | 601 | 675 | |||||||||||
Interest expense, net | 132 | 232 | 239 | 353 | |||||||||||
Other income, net | (2 | ) | (6 | ) | (2 | ) | (9 | ) | |||||||
Income before provision for income taxes | 217 | 149 | 364 | 331 | |||||||||||
Provision for income taxes | 83 | 63 | 138 | 130 | |||||||||||
Net income | $ | 134 | $ | 86 | $ | 226 | $ | 201 | |||||||
Diluted earnings per share | $ | 1.52 | $ | 0.88 | $ | 2.52 | $ | 2.04 |
June 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 265 | $ | 179 | |||
Accounts receivable, net | 867 | 930 | |||||
Inventory | 71 | 69 | |||||
Prepaid expenses and other assets | 61 | 116 | |||||
Total current assets | 1,264 | 1,294 | |||||
Rental equipment, net | 6,325 | 6,186 | |||||
Property and equipment, net | 437 | 445 | |||||
Goodwill | 3,259 | 3,243 | |||||
Other intangible assets, net | 825 | 905 | |||||
Other long-term assets | 10 | 10 | |||||
Total assets | $ | 12,120 | $ | 12,083 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Short-term debt and current maturities of long-term debt | $ | 576 | $ | 607 | |||
Accounts payable | 609 | 271 | |||||
Accrued expenses and other liabilities | 323 | 355 | |||||
Total current liabilities | 1,508 | 1,233 | |||||
Long-term debt | 7,265 | 7,555 | |||||
Deferred taxes | 1,790 | 1,765 | |||||
Other long-term liabilities | 55 | 54 | |||||
Total liabilities | 10,618 | 10,607 | |||||
Common stock | 1 | 1 | |||||
Additional paid-in capital | 2,259 | 2,197 | |||||
Retained earnings | 1,314 | 1,088 | |||||
Treasury stock | (1,885 | ) | (1,560 | ) | |||
Accumulated other comprehensive loss | (187 | ) | (250 | ) | |||
Total stockholders’ equity | 1,502 | 1,476 | |||||
Total liabilities and stockholders’ equity | $ | 12,120 | $ | 12,083 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||
Net income | $ | 134 | $ | 86 | $ | 226 | $ | 201 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 306 | 307 | 616 | 611 | |||||||||||
Amortization of deferred financing costs and original issue discounts | 2 | 2 | 4 | 5 | |||||||||||
Gain on sales of rental equipment | (55 | ) | (56 | ) | (102 | ) | (108 | ) | |||||||
Gain on sales of non-rental equipment | — | (2 | ) | (1 | ) | (4 | ) | ||||||||
Stock compensation expense, net | 13 | 11 | 22 | 25 | |||||||||||
Merger related costs | — | 1 | — | (26 | ) | ||||||||||
Restructuring charge | 2 | — | 4 | 1 | |||||||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | 26 | 121 | 26 | 123 | |||||||||||
Excess tax benefits from share-based payment arrangements | (26 | ) | — | (53 | ) | — | |||||||||
Increase in deferred taxes | 44 | 31 | 69 | 70 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
(Increase) decrease in accounts receivable | (35 | ) | (44 | ) | 68 | 37 | |||||||||
Decrease (increase) in inventory | 2 | 1 | (2 | ) | (3 | ) | |||||||||
(Increase) decrease in prepaid expenses and other assets | — | (21 | ) | 64 | (3 | ) | |||||||||
Increase in accounts payable | 281 | 217 | 337 | 401 | |||||||||||
Decrease in accrued expenses and other liabilities | (51 | ) | (79 | ) | (31 | ) | (80 | ) | |||||||
Net cash provided by operating activities | 643 | 575 | 1,247 | 1,250 | |||||||||||
Cash Flows From Investing Activities: | |||||||||||||||
Purchases of rental equipment | (622 | ) | (693 | ) | (722 | ) | (1,016 | ) | |||||||
Purchases of non-rental equipment | (19 | ) | (28 | ) | (42 | ) | (50 | ) | |||||||
Proceeds from sales of rental equipment | 134 | 124 | 249 | 240 | |||||||||||
Proceeds from sales of non-rental equipment | 3 | 4 | 7 | 8 | |||||||||||
Purchases of other companies, net of cash acquired | (1 | ) | (58 | ) | (14 | ) | (58 | ) | |||||||
Net cash used in investing activities | (505 | ) | (651 | ) | (522 | ) | (876 | ) | |||||||
Cash Flows From Financing Activities: | |||||||||||||||
Proceeds from debt | 3,050 | 3,171 | 3,964 | 5,907 | |||||||||||
Payments of debt | (2,983 | ) | (2,943 | ) | (4,320 | ) | (5,647 | ) | |||||||
Payment of contingent consideration | — | (52 | ) | — | (52 | ) | |||||||||
Payments of financing costs | (12 | ) | (2 | ) | (12 | ) | (26 | ) | |||||||
Proceeds from the exercise of common stock options | — | 1 | — | 1 | |||||||||||
Common stock repurchased | (172 | ) | (158 | ) | (336 | ) | (501 | ) | |||||||
Excess tax benefits from share-based payment arrangements | 26 | — | 53 | — | |||||||||||
Net cash (used in) provided by financing activities | (91 | ) | 17 | (651 | ) | (318 | ) | ||||||||
Effect of foreign exchange rates | (1 | ) | 2 | 12 | (14 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 46 | (57 | ) | 86 | 42 | ||||||||||
Cash and cash equivalents at beginning of period | 219 | 257 | 179 | 158 | |||||||||||
Cash and cash equivalents at end of period | $ | 265 | $ | 200 | $ | 265 | $ | 200 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||||||
Cash paid for income taxes, net | $ | 56 | $ | 65 | $ | 3 | $ | 30 | |||||||
Cash paid for interest | 150 | 162 | 219 | 253 |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||||
General Rentals | |||||||||||
Reportable segment equipment rentals revenue | $1,015 | $1,048 | (3.1)% | $1,970 | $2,024 | (2.7)% | |||||
Reportable segment equipment rentals gross profit | 417 | 456 | (8.6)% | 774 | 839 | (7.7)% | |||||
Reportable segment equipment rentals gross margin | 41.1% | 43.5% | (240) bps | 39.3% | 41.5% | (220) bps | |||||
Trench, Power and Pump | |||||||||||
Reportable segment equipment rentals revenue | $189 | $172 | 9.9% | $351 | $321 | 9.3% | |||||
Reportable segment equipment rentals gross profit | 89 | 79 | 12.7% | 157 | 142 | 10.6% | |||||
Reportable segment equipment rentals gross margin | 47.1% | 45.9% | 120 bps | 44.7% | 44.2% | 50 bps | |||||
Total United Rentals | |||||||||||
Total equipment rentals revenue | $1,204 | $1,220 | (1.3)% | $2,321 | $2,345 | (1.0)% | |||||
Total equipment rentals gross profit | 506 | 535 | (5.4)% | 931 | 981 | (5.1)% | |||||
Total equipment rentals gross margin | 42.0% | 43.9% | (190) bps | 40.1% | 41.8% | (170) bps |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net income available to common stockholders | $ | 134 | $ | 86 | $ | 226 | $ | 201 | |||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per share—weighted-average common shares | 88.1 | 96.6 | 89.3 | 96.9 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock options | 0.3 | 0.3 | 0.3 | 0.3 | |||||||||||
4 percent Convertible Senior Notes | — | 0.6 | — | 0.9 | |||||||||||
Restricted stock units | 0.1 | 0.2 | 0.1 | 0.3 | |||||||||||
Denominator for diluted earnings per share—adjusted weighted-average common shares | 88.5 | 97.7 | 89.7 | 98.4 | |||||||||||
Diluted earnings per share | $ | 1.52 | $ | 0.88 | $ | 2.52 | $ | 2.04 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Earnings per share - GAAP, as reported | $ | 1.52 | $ | 0.88 | $ | 2.52 | $ | 2.04 | |||||||
After-tax impact of: | |||||||||||||||
Merger related costs (1) | — | — | — | (0.17 | ) | ||||||||||
Merger related intangible asset amortization (2) | 0.28 | 0.27 | 0.57 | 0.57 | |||||||||||
Impact on depreciation related to acquired RSC fleet and property and equipment (3) | — | — | — | (0.01 | ) | ||||||||||
Impact of the fair value mark-up of acquired RSC fleet (4) | 0.06 | 0.04 | 0.13 | 0.08 | |||||||||||
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (5) | — | — | (0.01 | ) | (0.01 | ) | |||||||||
Restructuring charge (6) | 0.02 | — | 0.03 | 0.01 | |||||||||||
Asset impairment charge (7) | — | — | 0.02 | — | |||||||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | 0.18 | 0.76 | 0.18 | 0.77 | |||||||||||
Earnings per share - adjusted | $ | 2.06 | $ | 1.95 | $ | 3.44 | $ | 3.28 | |||||||
Tax rate applied to above adjustments (8) | 38.4 | % | 38.7 | % | 38.4 | % | 38.9 | % |
(1) | Reflects transaction costs associated with the April 2014 National Pump acquisition. The income for the six months ended June 30, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. |
(2) | Reflects the amortization of the intangible assets acquired in the RSC and National Pump acquisitions. |
(3) | Reflects the impact of extending the useful lives of equipment acquired in the RSC acquisition, net of the impact of additional depreciation associated with the fair value mark-up of such equipment. |
(4) | Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC acquisition and subsequently sold. |
(5) | Reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition. |
(6) | Reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. |
(7) | Reflects write-offs of fixed assets in connection with our restructuring programs. |
(8) | The tax rates applied to the adjustments reflect the statutory rates in the applicable entity. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 134 | $ | 86 | $ | 226 | $ | 201 | |||||||
Provision for income taxes | 83 | 63 | 138 | 130 | |||||||||||
Interest expense, net | 132 | 232 | 239 | 353 | |||||||||||
Depreciation of rental equipment | 242 | 240 | 485 | 475 | |||||||||||
Non-rental depreciation and amortization | 64 | 67 | 131 | 136 | |||||||||||
EBITDA (A) | $ | 655 | $ | 688 | $ | 1,219 | $ | 1,295 | |||||||
Merger related costs (1) | — | 1 | — | (26 | ) | ||||||||||
Restructuring charge (2) | 2 | — | 4 | 1 | |||||||||||
Stock compensation expense, net (3) | 13 | 11 | 22 | 25 | |||||||||||
Impact of the fair value mark-up of acquired RSC fleet (4) | 9 | 6 | 18 | 13 | |||||||||||
Adjusted EBITDA (B) | $ | 679 | $ | 706 | $ | 1,263 | $ | 1,308 |
(1) | Reflects transaction costs associated with the April 2014 National Pump acquisition. The income for the six months ended June 30, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. |
(2) | Reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. |
(3) | Represents non-cash, share-based payments associated with the granting of equity instruments. |
(4) | Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC acquisition and subsequently sold. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net cash provided by operating activities | $ | 643 | $ | 575 | $ | 1,247 | $ | 1,250 | |||||||
Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA: | |||||||||||||||
Amortization of deferred financing costs and original issue discounts | (2 | ) | (2 | ) | (4 | ) | (5 | ) | |||||||
Gain on sales of rental equipment | 55 | 56 | 102 | 108 | |||||||||||
Gain on sales of non-rental equipment | — | 2 | 1 | 4 | |||||||||||
Merger related costs (1) | — | (1 | ) | — | 26 | ||||||||||
Restructuring charge (2) | (2 | ) | — | (4 | ) | (1 | ) | ||||||||
Stock compensation expense, net (3) | (13 | ) | (11 | ) | (22 | ) | (25 | ) | |||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | (26 | ) | (121 | ) | (26 | ) | (123 | ) | |||||||
Excess tax benefits from share-based payment arrangements | 26 | — | 53 | — | |||||||||||
Changes in assets and liabilities | (232 | ) | (37 | ) | (350 | ) | (222 | ) | |||||||
Cash paid for interest | 150 | 162 | 219 | 253 | |||||||||||
Cash received for income taxes, net | 56 | 65 | 3 | 30 | |||||||||||
EBITDA | $ | 655 | $ | 688 | $ | 1,219 | $ | 1,295 | |||||||
Add back: | |||||||||||||||
Merger related costs (1) | — | 1 | — | (26 | ) | ||||||||||
Restructuring charge (2) | 2 | — | 4 | 1 | |||||||||||
Stock compensation expense, net (3) | 13 | 11 | 22 | 25 | |||||||||||
Impact of the fair value mark-up of acquired RSC fleet (4) | 9 | 6 | 18 | 13 | |||||||||||
Adjusted EBITDA | $ | 679 | $ | 706 | $ | 1,263 | $ | 1,308 |
(1) | Reflects transaction costs associated with the April 2014 National Pump acquisition. The income for the six months ended June 30, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. |
(2) | Reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. |
(3) | Represents non-cash, share-based payments associated with the granting of equity instruments. |
(4) | Reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in the RSC acquisition and subsequently sold. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net cash provided by operating activities | $ | 643 | $ | 575 | $ | 1,247 | $ | 1,250 | |||||||
Purchases of rental equipment | (622 | ) | (693 | ) | (722 | ) | (1,016 | ) | |||||||
Purchases of non-rental equipment | (19 | ) | (28 | ) | (42 | ) | (50 | ) | |||||||
Proceeds from sales of rental equipment | 134 | 124 | 249 | 240 | |||||||||||
Proceeds from sales of non-rental equipment | 3 | 4 | 7 | 8 | |||||||||||
Excess tax benefits from share-based payment arrangements (1) | 26 | — | 53 | — | |||||||||||
Free cash flow (usage) | $ | 165 | $ | (18 | ) | $ | 792 | $ | 432 |
(1) | The excess tax benefits from share-based payment arrangements result from stock-based compensation windfall deductions in excess of the amounts reported for financial reporting purposes, and are reported as financing cash flows. We added the excess tax benefits back to our calculation of free cash flow to generally classify cash flows from income taxes as operating cash flows. However, these excess tax benefits did not impact free cash flow for the three or six months ended June 30, 2016, as they do not result in increased cash flows until the associated income taxes are settled. |
Net cash provided by operating activities | $1,600- $1,700 | |
Purchases of rental equipment | $(1,150)-$(1,250) | |
Proceeds from sales of rental equipment | $450-$550 | |
Free cash flow * | $900- $1,000 |
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