x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware Delaware | 06-1522496 86-0933835 | |
(States of Incorporation) | (I.R.S. Employer Identification Nos.) | |
100 First Stamford Place, Suite 700 Stamford, Connecticut | 06902 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated Filer | x | Accelerated Filer | o | ||
Non-Accelerated Filer | o | Smaller Reporting Company | o |
Page | ||
PART I | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
PART II | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 6 | ||
• | the possibility that companies that we have acquired or may acquire, in our specialty business or otherwise, could have undiscovered liabilities or involve other unexpected costs, may strain our management capabilities or may be difficult to integrate; |
• | the cyclical nature of our business, which is highly sensitive to North American construction and industrial activities; if construction or industrial activity decline, our revenues and, because many of our costs are fixed, our profitability may be adversely affected; |
• | our significant indebtedness (which totaled $8.0 billion at September 30, 2016) requires us to use a substantial portion of our cash flow for debt service and can constrain our flexibility in responding to unanticipated or adverse business conditions; |
• | inability to refinance our indebtedness on terms that are favorable to us, or at all; |
• | incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness; |
• | noncompliance with financial or other covenants in our debt agreements, which could result in our lenders terminating the agreements and requiring us to repay outstanding borrowings; |
• | restrictive covenants and amount of borrowings permitted in our debt instruments, which can limit our financial and operational flexibility; |
• | overcapacity of fleet in the equipment rental industry; |
• | inability to benefit from government spending, including spending associated with infrastructure projects; |
• | fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated; |
• | rates we charge and time utilization we achieve being less than anticipated; |
• | inability to manage credit risk adequately or to collect on contracts with a large number of customers; |
• | inability to access the capital that our businesses or growth plans may require; |
• | incurrence of impairment charges; |
• | trends in oil and natural gas could adversely affect the demand for our services and products; |
• | the fact that our holding company structure requires us to depend in part on distributions from subsidiaries and such distributions could be limited by contractual or legal restrictions; |
• | increases in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves; |
• | incurrence of additional expenses (including indemnification obligations) and other costs in connection with litigation, regulatory and investigatory matters; |
• | the outcome or other potential consequences of regulatory matters and commercial litigation; |
• | shortfalls in our insurance coverage; |
• | our charter provisions as well as provisions of certain debt agreements and our significant indebtedness may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; |
• | turnover in our management team and inability to attract and retain key personnel; |
• | costs we incur being more than anticipated, and the inability to realize expected savings in the amounts or time frames planned; |
• | dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms; |
• | inability to sell our new or used fleet in the amounts, or at the prices, we expect; |
• | competition from existing and new competitors; |
• | risks related to security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; |
• | the costs of complying with environmental, safety and foreign law and regulations, as well as other risks associated with non-U.S. operations, including currency exchange risk; |
• | labor disputes, work stoppages or other labor difficulties, which may impact our productivity, and potential enactment of new legislation or other changes in law affecting our labor relations or operations generally; and |
• | increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment. |
Item 1. | Financial Statements |
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 297 | $ | 179 | |||
Accounts receivable, net of allowance for doubtful accounts of $55 at September 30, 2016 and December 31, 2015 | 929 | 930 | |||||
Inventory | 72 | 69 | |||||
Prepaid expenses and other assets | 56 | 116 | |||||
Total current assets | 1,354 | 1,294 | |||||
Rental equipment, net | 6,427 | 6,186 | |||||
Property and equipment, net | 435 | 445 | |||||
Goodwill | 3,267 | 3,243 | |||||
Other intangible assets, net | 782 | 905 | |||||
Other long-term assets | 10 | 10 | |||||
Total assets | $ | 12,275 | $ | 12,083 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Short-term debt and current maturities of long-term debt | $ | 609 | $ | 607 | |||
Accounts payable | 409 | 271 | |||||
Accrued expenses and other liabilities | 402 | 355 | |||||
Total current liabilities | 1,420 | 1,233 | |||||
Long-term debt | 7,393 | 7,555 | |||||
Deferred taxes | 1,863 | 1,765 | |||||
Other long-term liabilities | 60 | 54 | |||||
Total liabilities | 10,736 | 10,607 | |||||
Common stock—$0.01 par value, 500,000,000 shares authorized, 111,944,470 and 84,687,234 shares issued and outstanding, respectively, at September 30, 2016 and 111,586,585 and 91,776,436 shares issued and outstanding, respectively, at December 31, 2015 | 1 | 1 | |||||
Additional paid-in capital | 2,270 | 2,197 | |||||
Retained earnings | 1,501 | 1,088 | |||||
Treasury stock at cost—27,257,236 and 19,810,149 shares at September 30, 2016 and December 31, 2015, respectively | (2,037 | ) | (1,560 | ) | |||
Accumulated other comprehensive loss | (196 | ) | (250 | ) | |||
Total stockholders’ equity | 1,539 | 1,476 | |||||
Total liabilities and stockholders’ equity | $ | 12,275 | $ | 12,083 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Equipment rentals | $ | 1,322 | $ | 1,326 | $ | 3,643 | $ | 3,671 | |||||||
Sales of rental equipment | 112 | 141 | 361 | 381 | |||||||||||
Sales of new equipment | 30 | 38 | 96 | 110 | |||||||||||
Contractor supplies sales | 19 | 21 | 60 | 60 | |||||||||||
Service and other revenues | 25 | 24 | 79 | 72 | |||||||||||
Total revenues | 1,508 | 1,550 | 4,239 | 4,294 | |||||||||||
Cost of revenues: | |||||||||||||||
Cost of equipment rentals, excluding depreciation | 486 | 470 | 1,391 | 1,359 | |||||||||||
Depreciation of rental equipment | 250 | 249 | 735 | 724 | |||||||||||
Cost of rental equipment sales | 68 | 85 | 215 | 217 | |||||||||||
Cost of new equipment sales | 25 | 31 | 79 | 91 | |||||||||||
Cost of contractor supplies sales | 13 | 15 | 41 | 42 | |||||||||||
Cost of service and other revenues | 10 | 10 | 32 | 29 | |||||||||||
Total cost of revenues | 852 | 860 | 2,493 | 2,462 | |||||||||||
Gross profit | 656 | 690 | 1,746 | 1,832 | |||||||||||
Selling, general and administrative expenses | 179 | 178 | 533 | 534 | |||||||||||
Merger related costs | — | — | — | (26 | ) | ||||||||||
Restructuring charge | 4 | — | 8 | 1 | |||||||||||
Non-rental depreciation and amortization | 61 | 66 | 192 | 202 | |||||||||||
Operating income | 412 | 446 | 1,013 | 1,121 | |||||||||||
Interest expense, net | 110 | 107 | 349 | 460 | |||||||||||
Other income, net | (1 | ) | (1 | ) | (3 | ) | (10 | ) | |||||||
Income before provision for income taxes | 303 | 340 | 667 | 671 | |||||||||||
Provision for income taxes | 116 | 125 | 254 | 255 | |||||||||||
Net income | $ | 187 | $ | 215 | $ | 413 | $ | 416 | |||||||
Basic earnings per share | $ | 2.18 | $ | 2.28 | $ | 4.68 | $ | 4.33 | |||||||
Diluted earnings per share | $ | 2.16 | $ | 2.25 | $ | 4.66 | $ | 4.27 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 187 | $ | 215 | $ | 413 | $ | 416 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | (9 | ) | (71 | ) | 51 | (144 | ) | ||||||||
Fixed price diesel swaps | — | (1 | ) | 3 | — | ||||||||||
Other comprehensive (loss) income | (9 | ) | (72 | ) | 54 | (144 | ) | ||||||||
Comprehensive income (1) | $ | 178 | $ | 143 | $ | 467 | $ | 272 |
Common Stock | Treasury Stock | ||||||||||||||||||||||||
Number of Shares (1) | Amount | Additional Paid-in Capital | Retained Earnings | Number of Shares | Amount | Accumulated Other Comprehensive (Loss) Income (2) | |||||||||||||||||||
Balance at December 31, 2015 | 92 | $ | 1 | $ | 2,197 | $ | 1,088 | 20 | $ | (1,560 | ) | $ | (250 | ) | |||||||||||
Net income | 413 | ||||||||||||||||||||||||
Foreign currency translation adjustments | 51 | ||||||||||||||||||||||||
Fixed price diesel swaps | 3 | ||||||||||||||||||||||||
Stock compensation expense, net | 33 | ||||||||||||||||||||||||
Shares repurchased and retired | (11 | ) | |||||||||||||||||||||||
Repurchase of common stock | (7 | ) | 7 | (477 | ) | ||||||||||||||||||||
Excess tax benefits from share-based payment arrangements, net | 51 | ||||||||||||||||||||||||
Balance at September 30, 2016 | 85 | $ | 1 | $ | 2,270 | $ | 1,501 | 27 | $ | (2,037 | ) | $ | (196 | ) |
Nine Months Ended | |||||||
September 30, | |||||||
2016 | 2015 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 413 | $ | 416 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 927 | 926 | |||||
Amortization of deferred financing costs and original issue discounts | 7 | 8 | |||||
Gain on sales of rental equipment | (146 | ) | (164 | ) | |||
Gain on sales of non-rental equipment | (3 | ) | (6 | ) | |||
Stock compensation expense, net | 33 | 37 | |||||
Merger related costs | — | (26 | ) | ||||
Restructuring charge | 8 | 1 | |||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | 36 | 123 | |||||
Excess tax benefits from share-based payment arrangements | (53 | ) | (57 | ) | |||
Increase in deferred taxes | 90 | 94 | |||||
Changes in operating assets and liabilities, net of amounts acquired: | |||||||
Decrease (increase) in accounts receivable | 7 | (72 | ) | ||||
Increase in inventory | (3 | ) | — | ||||
Decrease in prepaid expenses and other assets | 75 | 17 | |||||
Increase in accounts payable | 137 | 195 | |||||
Increase in accrued expenses and other liabilities | 102 | 65 | |||||
Net cash provided by operating activities | 1,630 | 1,557 | |||||
Cash Flows From Investing Activities: | |||||||
Purchases of rental equipment | (1,145 | ) | (1,425 | ) | |||
Purchases of non-rental equipment | (65 | ) | (76 | ) | |||
Proceeds from sales of rental equipment | 361 | 381 | |||||
Proceeds from sales of non-rental equipment | 12 | 14 | |||||
Purchases of other companies, net of cash acquired | (28 | ) | (86 | ) | |||
Net cash used in investing activities | (865 | ) | (1,192 | ) | |||
Cash Flows From Financing Activities: | |||||||
Proceeds from debt | 5,812 | 7,453 | |||||
Payments of debt | (6,021 | ) | (7,093 | ) | |||
Payment of contingent consideration | — | (52 | ) | ||||
Proceeds from the exercise of common stock options | — | 1 | |||||
Common stock repurchased | (488 | ) | (667 | ) | |||
Payments of financing costs | (12 | ) | (27 | ) | |||
Excess tax benefits from share-based payment arrangements | 53 | 57 | |||||
Net cash used in financing activities | (656 | ) | (328 | ) | |||
Effect of foreign exchange rates | 9 | (24 | ) | ||||
Net increase in cash and cash equivalents | 118 | 13 | |||||
Cash and cash equivalents at beginning of period | 179 | 158 | |||||
Cash and cash equivalents at end of period | $ | 297 | $ | 171 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for income taxes, net | $ | 14 | $ | 55 | |||
Cash paid for interest | 294 | 304 |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended September 30, 2016 | |||||||||||
Equipment rentals | $ | 1,097 | $ | 225 | $ | 1,322 | |||||
Sales of rental equipment | 103 | 9 | 112 | ||||||||
Sales of new equipment | 27 | 3 | 30 | ||||||||
Contractor supplies sales | 16 | 3 | 19 | ||||||||
Service and other revenues | 23 | 2 | 25 | ||||||||
Total revenue | 1,266 | 242 | 1,508 | ||||||||
Depreciation and amortization expense | 266 | 45 | 311 | ||||||||
Equipment rentals gross profit | 469 | 117 | 586 | ||||||||
Three Months Ended September 30, 2015 | |||||||||||
Equipment rentals | $ | 1,120 | $ | 206 | $ | 1,326 | |||||
Sales of rental equipment | 132 | 9 | 141 | ||||||||
Sales of new equipment | 33 | 5 | 38 | ||||||||
Contractor supplies sales | 18 | 3 | 21 | ||||||||
Service and other revenues | 23 | 1 | 24 | ||||||||
Total revenue | 1,326 | 224 | 1,550 | ||||||||
Depreciation and amortization expense | 272 | 43 | 315 | ||||||||
Equipment rentals gross profit | 500 | 107 | 607 | ||||||||
Nine Months Ended September 30, 2016 | |||||||||||
Equipment rentals | $ | 3,067 | $ | 576 | $ | 3,643 | |||||
Sales of rental equipment | 334 | 27 | 361 | ||||||||
Sales of new equipment | 84 | 12 | 96 | ||||||||
Contractor supplies sales | 49 | 11 | 60 | ||||||||
Service and other revenues | 71 | 8 | 79 | ||||||||
Total revenue | 3,605 | 634 | 4,239 | ||||||||
Depreciation and amortization expense | 791 | 136 | 927 | ||||||||
Equipment rentals gross profit | 1,243 | 274 | 1,517 | ||||||||
Capital expenditures | 1,086 | 124 | 1,210 | ||||||||
Nine Months Ended September 30, 2015 | |||||||||||
Equipment rentals | $ | 3,144 | $ | 527 | $ | 3,671 | |||||
Sales of rental equipment | 356 | 25 | 381 | ||||||||
Sales of new equipment | 94 | 16 | 110 | ||||||||
Contractor supplies sales | 51 | 9 | 60 | ||||||||
Service and other revenues | 65 | 7 | 72 | ||||||||
Total revenue | 3,710 | 584 | 4,294 | ||||||||
Depreciation and amortization expense | 798 | 128 | 926 | ||||||||
Equipment rentals gross profit | 1,339 | 249 | 1,588 | ||||||||
Capital expenditures | 1,325 | 176 | 1,501 |
September 30, 2016 | December 31, 2015 | ||||||
Total reportable segment assets | |||||||
General rentals | $ | 10,731 | $ | 10,561 | |||
Trench, power and pump | 1,544 | 1,522 | |||||
Total assets | $ | 12,275 | $ | 12,083 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total equipment rentals gross profit | $ | 586 | $ | 607 | $ | 1,517 | $ | 1,588 | |||||||
Gross profit from other lines of business | 70 | 83 | 229 | 244 | |||||||||||
Selling, general and administrative expenses | (179 | ) | (178 | ) | (533 | ) | (534 | ) | |||||||
Merger related costs | — | — | — | 26 | |||||||||||
Restructuring charge | (4 | ) | — | (8 | ) | (1 | ) | ||||||||
Non-rental depreciation and amortization | (61 | ) | (66 | ) | (192 | ) | (202 | ) | |||||||
Interest expense, net | (110 | ) | (107 | ) | (349 | ) | (460 | ) | |||||||
Other income, net | 1 | 1 | 3 | 10 | |||||||||||
Income before provision for income taxes | $ | 303 | $ | 340 | $ | 667 | $ | 671 |
Reserve Balance at | Charged to Costs and Expenses (1) | Payments and Other | Reserve Balance at | |||||||||||||
Description | December 31, 2015 | September 30, 2016 | ||||||||||||||
Closed Restructuring Programs | ||||||||||||||||
Branch closure charges | $ | 13 | $ | 1 | $ | (5 | ) | $ | 9 | |||||||
Severance costs | — | — | — | — | ||||||||||||
Total | $ | 13 | $ | 1 | $ | (5 | ) | $ | 9 | |||||||
2015-2016 Cost Savings Restructuring Program | ||||||||||||||||
Branch closure charges | $ | — | $ | 3 | $ | — | $ | 3 | ||||||||
Severance costs | 3 | 4 | (6 | ) | 1 | |||||||||||
Total | $ | 3 | $ | 7 | $ | (6 | ) | $ | 4 | |||||||
Total | ||||||||||||||||
Branch closure charges | $ | 13 | $ | 4 | $ | (5 | ) | $ | 12 | |||||||
Severance costs | 3 | 4 | (6 | ) | 1 | |||||||||||
Total | $ | 16 | $ | 8 | $ | (11 | ) | $ | 13 |
(1) | Reflected in our condensed consolidated statements of income as “Restructuring charge.” These charges are not allocated to our reportable segments. |
Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015 | ||||||||||||||
Location of income (expense) recognized on derivative/hedged item | Amount of income (expense) recognized on derivative | Amount of income (expense) recognized on hedged item | Amount of income (expense) recognized on derivative | Amount of income (expense) recognized on hedged item | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Fixed price diesel swaps | Other income (expense), net (1) | $ * | $ * | ||||||||||||
Cost of equipment rentals, excluding depreciation (2), (3) | (1 | ) | $ | (6 | ) | (2 | ) | $ | (7 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign currency forward contracts (4) | Other income (expense), net | (4 | ) | 4 | (5 | ) | 5 | ||||||||
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2015 | ||||||||||||||
Location of income (expense) recognized on derivative/hedged item | Amount of income (expense) recognized on derivative | Amount of income (expense) recognized on hedged item | Amount of income (expense) recognized on derivative | Amount of income (expense) recognized on hedged item | |||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Fixed price diesel swaps | Other income (expense), net (1) | $ * | $ * | ||||||||||||
Cost of equipment rentals, excluding depreciation (2), (3) | (5 | ) | $ | (17 | ) | (5 | ) | $ | (23 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign currency forward contracts (4) | Other income (expense), net | (1 | ) | 1 | (5 | ) | 5 |
* | Amounts are insignificant (less than $1). |
(1) | Represents the ineffective portion of the fixed price diesel swaps. |
(2) | Amounts recognized on derivative represent the effective portion of the fixed price diesel swaps. |
(3) | Amounts recognized on hedged item reflect the use of 2.7 million and 2.8 million gallons of diesel covered by the fixed price swaps during the three months ended September 30, 2016 and 2015, respectively, and the use of 7.7 million and 8.2 million gallons and of diesel covered by the fixed price swaps during the nine months ended September 30, 2016 and 2015, respectively. These amounts are reflected, net of cash received from, or paid to, the counterparties to the fixed price swaps, in operating cash flows in our condensed consolidated statement of cash flows. |
(4) | Insignificant amounts were reflected in our condensed consolidated statement of cash flows associated with the forward contracts to purchase Canadian dollars, as the cash impact of the gains/losses recognized on the derivatives were offset by the gains/losses recognized on the hedged items. |
a) | quoted prices for similar assets or liabilities in active markets; |
b) | quoted prices for identical or similar assets or liabilities in inactive markets; |
c) | inputs other than quoted prices that are observable for the asset or liability; |
d) | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
September 30, 2016 | December 31, 2015 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Senior notes | $ | 5,605 | $ | 5,855 | $ | 5,916 | $ | 6,030 |
September 30, 2016 | December 31, 2015 | ||||||
Accounts Receivable Securitization Facility (1) | $ | 579 | $ | 571 | |||
$2.5 billion ABL Facility (2) | 1,737 | 1,579 | |||||
7 3/8 percent Senior Notes (3) | — | 740 | |||||
8 1/4 percent Senior Notes (3) | — | 315 | |||||
7 5/8 percent Senior Notes | 1,308 | 1,306 | |||||
6 1/8 percent Senior Notes | 936 | 937 | |||||
4 5/8 percent Senior Secured Notes | 990 | 989 | |||||
5 3/4 percent Senior Notes | 839 | 838 | |||||
5 1/2 percent Senior Notes | 792 | 791 | |||||
5 7/8 percent Senior Notes (4) | 740 | — | |||||
Capital leases | 81 | 96 | |||||
Total debt | 8,002 | 8,162 | |||||
Less short-term portion (5) | (609 | ) | (607 | ) | |||
Total long-term debt | $ | 7,393 | $ | 7,555 |
(1) | In August 2016, the accounts receivable securitization facility was amended, primarily to extend the maturity date. The amended facility expires on August 29, 2017 and may be further extended on a 364-day basis by mutual agreement with the purchasers under the accounts receivable securitization facility. At September 30, 2016, $44 was available under our accounts receivable securitization facility. The interest rate applicable to the accounts receivable securitization facility was 1.4 percent at September 30, 2016. During the nine months ended September 30, 2016, the monthly average amount outstanding under the accounts receivable securitization facility was $539, and the weighted-average interest rate thereon was 1.2 percent. The maximum month-end amount outstanding under the accounts receivable securitization facility during the nine months ended September 30, 2016 was $580. Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves, exceeds the outstanding loans. As of September 30, 2016, there were $623 of receivables, net of applicable reserves, in the collateral pool. |
(2) | At September 30, 2016, $716 was available under our ABL facility, net of $37 of letters of credit. The interest rate applicable to the ABL facility was 2.0 percent at September 30, 2016. During the nine months ended September 30, 2016, the monthly average amount outstanding under the ABL facility was $1.4 billion, and the weighted-average interest rate thereon was 2.1 percent. The maximum month-end amount outstanding under the ABL facility during the nine months ended September 30, 2016 was $1.7 billion. In June 2016, the ABL facility was amended, primarily to extend the maturity date. All amounts borrowed under the ABL facility must be repaid by June 2021. |
(3) | In May 2016, we redeemed all of our 8 1/4 percent Senior Notes and $550 principal amount of our 7 3/8 percent Senior Notes. Upon redemption, we recognized an aggregate loss of $25 in interest expense, net. The loss represented the difference between the net carrying amount and the total purchase price of the notes. In August 2016, we redeemed the remaining $200 principal amount of our 7 3/8 percent Senior Notes using borrowings available under our ABL facility. We recognized a loss representing the difference between the net carrying amount and the total purchase price of the notes of $10 in interest expense, net upon redemption. |
(4) | In May 2016, URNA issued $750 aggregate principal amount of 5 7/8 percent Senior Notes (the “5 7/8 percent Notes”) which are due September 15, 2026. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 5 7/8 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 5 7/8 percent Notes may be redeemed on or after September 15, 2021, at specified redemption prices that range from 102.938 percent in 2021, to 100 percent in 2024 and thereafter, plus accrued and unpaid interest, if any. The indenture governing the 5 7/8 percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens; (ii) additional indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) restrictions affecting subsidiaries; (viii) transactions with affiliates; and (ix) designations of unrestricted subsidiaries, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. The indenture also requires that, in the event of a |
(5) | As of September 30, 2016, our short-term debt primarily reflects $579 of borrowings under our accounts receivable securitization facility. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net income available to common stockholders | $ | 187 | $ | 215 | 413 | 416 | |||||||||
Denominator: | |||||||||||||||
Denominator for basic earnings per share—weighted-average common shares | 85,945 | 94,213 | 88,175 | 95,992 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock options | 278 | 291 | 281 | 311 | |||||||||||
4 percent Convertible Senior Notes | — | 574 | — | 786 | |||||||||||
Restricted stock units | 222 | 113 | 168 | 196 | |||||||||||
Denominator for diluted earnings per share—adjusted weighted-average common shares | 86,445 | 95,191 | 88,624 | 97,285 | |||||||||||
Basic earnings per share | $ | 2.18 | $ | 2.28 | $ | 4.68 | $ | 4.33 | |||||||
Diluted earnings per share | $ | 2.16 | $ | 2.25 | $ | 4.66 | $ | 4.27 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 20 | $ | — | $ | 277 | $ | — | $ | — | $ | 297 | |||||||||||||
Accounts receivable, net | — | 25 | — | 97 | 807 | — | 929 | ||||||||||||||||||||
Intercompany receivable (payable) | 229 | (29 | ) | (190 | ) | (121 | ) | — | 111 | — | |||||||||||||||||
Inventory | — | 65 | — | 7 | — | — | 72 | ||||||||||||||||||||
Prepaid expenses and other assets | — | 47 | — | 9 | — | — | 56 | ||||||||||||||||||||
Total current assets | 229 | 128 | (190 | ) | 269 | 807 | 111 | 1,354 | |||||||||||||||||||
Rental equipment, net | — | 5,929 | — | 498 | — | — | 6,427 | ||||||||||||||||||||
Property and equipment, net | 38 | 329 | 23 | 45 | — | — | 435 | ||||||||||||||||||||
Investments in subsidiaries | 1,293 | 1,033 | 990 | — | — | (3,316 | ) | — | |||||||||||||||||||
Goodwill | — | 3,014 | — | 253 | — | — | 3,267 | ||||||||||||||||||||
Other intangible assets, net | — | 721 | — | 61 | — | — | 782 | ||||||||||||||||||||
Other long-term assets | 3 | 7 | — | — | — | — | 10 | ||||||||||||||||||||
Total assets | $ | 1,563 | $ | 11,161 | $ | 823 | $ | 1,126 | $ | 807 | $ | (3,205 | ) | $ | 12,275 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||||||||||||||||||
Short-term debt and current maturities of long-term debt | $ | 1 | $ | 26 | $ | — | $ | 3 | $ | 579 | $ | — | $ | 609 | |||||||||||||
Accounts payable | — | 378 | — | 31 | — | — | 409 | ||||||||||||||||||||
Accrued expenses and other liabilities | — | 368 | 14 | 19 | 1 | — | 402 | ||||||||||||||||||||
Total current liabilities | 1 | 772 | 14 | 53 | 580 | — | 1,420 | ||||||||||||||||||||
Long-term debt | 3 | 7,268 | 114 | 8 | — | — | 7,393 | ||||||||||||||||||||
Deferred taxes | 20 | 1,768 | — | 75 | — | — | 1,863 | ||||||||||||||||||||
Other long-term liabilities | — | 60 | — | — | — | — | 60 | ||||||||||||||||||||
Total liabilities | 24 | 9,868 | 128 | 136 | 580 | — | 10,736 | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 1,539 | 1,293 | 695 | 990 | 227 | (3,205 | ) | 1,539 | |||||||||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 1,563 | $ | 11,161 | $ | 823 | $ | 1,126 | $ | 807 | $ | (3,205 | ) | $ | 12,275 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 18 | $ | — | $ | 161 | $ | — | $ | — | $ | 179 | |||||||||||||
Accounts receivable, net | — | 41 | — | 104 | 785 | — | 930 | ||||||||||||||||||||
Intercompany receivable (payable) | 144 | 40 | (176 | ) | (109 | ) | — | 101 | — | ||||||||||||||||||
Inventory | — | 62 | — | 7 | — | — | 69 | ||||||||||||||||||||
Prepaid expenses and other assets | — | 98 | — | 18 | — | — | 116 | ||||||||||||||||||||
Total current assets | 144 | 259 | (176 | ) | 181 | 785 | 101 | 1,294 | |||||||||||||||||||
Rental equipment, net | — | 5,657 | — | 529 | — | — | 6,186 | ||||||||||||||||||||
Property and equipment, net | 45 | 334 | 20 | 46 | — | — | 445 | ||||||||||||||||||||
Investments in subsidiaries | 1,307 | 958 | 924 | — | — | (3,189 | ) | — | |||||||||||||||||||
Goodwill | — | 3,000 | — | 243 | — | — | 3,243 | ||||||||||||||||||||
Other intangible assets, net | — | 838 | — | 67 | — | — | 905 | ||||||||||||||||||||
Other long-term assets | 3 | 7 | — | — | — | — | 10 | ||||||||||||||||||||
Total assets | $ | 1,499 | $ | 11,053 | $ | 768 | $ | 1,066 | $ | 785 | $ | (3,088 | ) | $ | 12,083 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||||||||||||||||||
Short-term debt and current maturities of long-term debt | $ | 1 | $ | 34 | $ | — | $ | — | $ | 572 | $ | — | $ | 607 | |||||||||||||
Accounts payable | — | 237 | — | 34 | — | — | 271 | ||||||||||||||||||||
Accrued expenses and other liabilities | — | 314 | 14 | 27 | — | — | 355 | ||||||||||||||||||||
Total current liabilities | 1 | 585 | 14 | 61 | 572 | — | 1,233 | ||||||||||||||||||||
Long-term debt | 4 | 7,430 | 110 | 11 | — | — | 7,555 | ||||||||||||||||||||
Deferred taxes | 18 | 1,677 | — | 70 | — | — | 1,765 | ||||||||||||||||||||
Other long-term liabilities | — | 54 | — | — | — | — | 54 | ||||||||||||||||||||
Total liabilities | 23 | 9,746 | 124 | 142 | 572 | — | 10,607 | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 1,476 | 1,307 | 644 | 924 | 213 | (3,088 | ) | 1,476 | |||||||||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 1,499 | $ | 11,053 | $ | 768 | $ | 1,066 | $ | 785 | $ | (3,088 | ) | $ | 12,083 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 1,208 | $ | — | $ | 114 | $ | — | $ | — | $ | 1,322 | |||||||||||||
Sales of rental equipment | — | 99 | — | 13 | — | — | 112 | ||||||||||||||||||||
Sales of new equipment | — | 28 | — | 2 | — | — | 30 | ||||||||||||||||||||
Contractor supplies sales | — | 17 | — | 2 | — | — | 19 | ||||||||||||||||||||
Service and other revenues | — | 22 | — | 3 | — | — | 25 | ||||||||||||||||||||
Total revenues | — | 1,374 | — | 134 | — | — | 1,508 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 435 | — | 51 | — | — | 486 | ||||||||||||||||||||
Depreciation of rental equipment | — | 227 | — | 23 | — | — | 250 | ||||||||||||||||||||
Cost of rental equipment sales | — | 61 | — | 7 | — | — | 68 | ||||||||||||||||||||
Cost of new equipment sales | — | 23 | — | 2 | — | — | 25 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 11 | — | 2 | — | — | 13 | ||||||||||||||||||||
Cost of service and other revenues | — | 11 | — | (1 | ) | — | — | 10 | |||||||||||||||||||
Total cost of revenues | — | 768 | — | 84 | — | — | 852 | ||||||||||||||||||||
Gross profit | — | 606 | — | 50 | — | — | 656 | ||||||||||||||||||||
Selling, general and administrative expenses | 2 | 151 | — | 18 | 8 | — | 179 | ||||||||||||||||||||
Restructuring charge | — | 4 | — | — | — | — | 4 | ||||||||||||||||||||
Non-rental depreciation and amortization | 3 | 52 | — | 6 | — | — | 61 | ||||||||||||||||||||
Operating (loss) income | (5 | ) | 399 | — | 26 | (8 | ) | — | 412 | ||||||||||||||||||
Interest (income) expense, net | (1 | ) | 109 | 1 | 1 | 2 | (2 | ) | 110 | ||||||||||||||||||
Other (income) expense, net | (123 | ) | 136 | — | 9 | (23 | ) | — | (1 | ) | |||||||||||||||||
Income (loss) before provision for income taxes | 119 | 154 | (1 | ) | 16 | 13 | 2 | 303 | |||||||||||||||||||
Provision for income taxes | 42 | 64 | — | 5 | 5 | — | 116 | ||||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 77 | 90 | (1 | ) | 11 | 8 | 2 | 187 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 110 | 20 | 11 | — | — | (141 | ) | — | |||||||||||||||||||
Net income (loss) | 187 | 110 | 10 | 11 | 8 | (139 | ) | 187 | |||||||||||||||||||
Other comprehensive (loss) income | (9 | ) | (9 | ) | (9 | ) | (7 | ) | — | 25 | (9 | ) | |||||||||||||||
Comprehensive income (loss) | $ | 178 | $ | 101 | $ | 1 | $ | 4 | $ | 8 | $ | (114 | ) | $ | 178 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 1,200 | $ | — | $ | 126 | $ | — | $ | — | $ | 1,326 | |||||||||||||
Sales of rental equipment | — | 124 | — | 17 | — | — | 141 | ||||||||||||||||||||
Sales of new equipment | — | 32 | — | 6 | — | — | 38 | ||||||||||||||||||||
Contractor supplies sales | — | 18 | — | 3 | — | — | 21 | ||||||||||||||||||||
Service and other revenues | — | 20 | — | 4 | — | — | 24 | ||||||||||||||||||||
Total revenues | — | 1,394 | — | 156 | — | — | 1,550 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 421 | — | 49 | — | — | 470 | ||||||||||||||||||||
Depreciation of rental equipment | — | 225 | — | 24 | — | — | 249 | ||||||||||||||||||||
Cost of rental equipment sales | — | 75 | — | 10 | — | — | 85 | ||||||||||||||||||||
Cost of new equipment sales | — | 26 | — | 5 | — | — | 31 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 12 | — | 3 | — | — | 15 | ||||||||||||||||||||
Cost of service and other revenues | — | 10 | — | — | — | — | 10 | ||||||||||||||||||||
Total cost of revenues | — | 769 | — | 91 | — | — | 860 | ||||||||||||||||||||
Gross profit | — | 625 | — | 65 | — | — | 690 | ||||||||||||||||||||
Selling, general and administrative expenses | (10 | ) | 160 | 2 | 21 | 5 | — | 178 | |||||||||||||||||||
Non-rental depreciation and amortization | 4 | 55 | 1 | 6 | — | — | 66 | ||||||||||||||||||||
Operating income (loss) | 6 | 410 | (3 | ) | 38 | (5 | ) | — | 446 | ||||||||||||||||||
Interest (income) expense, net | (1 | ) | 106 | 1 | — | 2 | (1 | ) | 107 | ||||||||||||||||||
Other (income) expense, net (1) | (275 | ) | 273 | (2 | ) | 30 | (27 | ) | — | (1 | ) | ||||||||||||||||
Income (loss) before provision (benefit) for income taxes | 282 | 31 | (2 | ) | 8 | 20 | 1 | 340 | |||||||||||||||||||
Provision (benefit) for income taxes | 118 | (2 | ) | — | 2 | 7 | — | 125 | |||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 164 | 33 | (2 | ) | 6 | 13 | 1 | 215 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 51 | 18 | 6 | — | — | (75 | ) | — | |||||||||||||||||||
Net income (loss) | 215 | 51 | 4 | 6 | 13 | (74 | ) | 215 | |||||||||||||||||||
Other comprehensive (loss) income | (72 | ) | (72 | ) | (70 | ) | (56 | ) | — | 198 | (72 | ) | |||||||||||||||
Comprehensive income (loss) | $ | 143 | $ | (21 | ) | $ | (66 | ) | $ | (50 | ) | $ | 13 | $ | 124 | $ | 143 |
(1) | Other (income) expense, net includes an adjustment to the amount of royalties Holdings receives from URNA and its subsidiaries as discussed below (see Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources- Relationship between Holdings and URNA). |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 3,335 | $ | — | $ | 308 | $ | — | $ | — | $ | 3,643 | |||||||||||||
Sales of rental equipment | — | 320 | — | 41 | — | — | 361 | ||||||||||||||||||||
Sales of new equipment | — | 86 | — | 10 | — | — | 96 | ||||||||||||||||||||
Contractor supplies sales | — | 52 | — | 8 | — | — | 60 | ||||||||||||||||||||
Service and other revenues | — | 69 | — | 10 | — | — | 79 | ||||||||||||||||||||
Total revenues | — | 3,862 | — | 377 | — | — | 4,239 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 1,246 | — | 145 | — | — | 1,391 | ||||||||||||||||||||
Depreciation of rental equipment | — | 667 | — | 68 | — | — | 735 | ||||||||||||||||||||
Cost of rental equipment sales | — | 193 | — | 22 | — | — | 215 | ||||||||||||||||||||
Cost of new equipment sales | — | 71 | — | 8 | — | — | 79 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 35 | — | 6 | — | — | 41 | ||||||||||||||||||||
Cost of service and other revenues | — | 30 | — | 2 | — | — | 32 | ||||||||||||||||||||
Total cost of revenues | — | 2,242 | — | 251 | — | — | 2,493 | ||||||||||||||||||||
Gross profit | — | 1,620 | — | 126 | — | — | 1,746 | ||||||||||||||||||||
Selling, general and administrative expenses | 10 | 450 | — | 55 | 18 | — | 533 | ||||||||||||||||||||
Merger related costs | — | — | — | — | — | — | — | ||||||||||||||||||||
Restructuring charge | — | 7 | — | 1 | — | — | 8 | ||||||||||||||||||||
Non-rental depreciation and amortization | 11 | 163 | — | 18 | — | — | 192 | ||||||||||||||||||||
Operating (loss) income | (21 | ) | 1,000 | — | 52 | (18 | ) | — | 1,013 | ||||||||||||||||||
Interest (income) expense, net | (4 | ) | 348 | 2 | 2 | 5 | (4 | ) | 349 | ||||||||||||||||||
Other (income) expense, net | (345 | ) | 382 | — | 29 | (69 | ) | — | (3 | ) | |||||||||||||||||
Income (loss) before provision for income taxes | 328 | 270 | (2 | ) | 21 | 46 | 4 | 667 | |||||||||||||||||||
Provision for income taxes | 121 | 109 | — | 6 | 18 | — | 254 | ||||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 207 | 161 | (2 | ) | 15 | 28 | 4 | 413 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 206 | 45 | 15 | — | — | (266 | ) | — | |||||||||||||||||||
Net income (loss) | 413 | 206 | 13 | 15 | 28 | (262 | ) | 413 | |||||||||||||||||||
Other comprehensive income (loss) | 54 | 54 | 51 | 41 | — | (146 | ) | 54 | |||||||||||||||||||
Comprehensive income (loss) | $ | 467 | $ | 260 | $ | 64 | $ | 56 | $ | 28 | $ | (408 | ) | $ | 467 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Equipment rentals | $ | — | $ | 3,298 | $ | — | $ | 373 | $ | — | $ | — | $ | 3,671 | |||||||||||||
Sales of rental equipment | — | 336 | — | 45 | — | — | 381 | ||||||||||||||||||||
Sales of new equipment | — | 95 | — | 15 | — | — | 110 | ||||||||||||||||||||
Contractor supplies sales | — | 52 | — | 8 | — | — | 60 | ||||||||||||||||||||
Service and other revenues | — | 61 | — | 11 | — | — | 72 | ||||||||||||||||||||
Total revenues | — | 3,842 | — | 452 | — | — | 4,294 | ||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||
Cost of equipment rentals, excluding depreciation | — | 1,194 | — | 165 | — | — | 1,359 | ||||||||||||||||||||
Depreciation of rental equipment | — | 652 | — | 72 | — | — | 724 | ||||||||||||||||||||
Cost of rental equipment sales | — | 192 | — | 25 | — | — | 217 | ||||||||||||||||||||
Cost of new equipment sales | — | 79 | — | 12 | — | — | 91 | ||||||||||||||||||||
Cost of contractor supplies sales | — | 36 | — | 6 | — | — | 42 | ||||||||||||||||||||
Cost of service and other revenues | — | 25 | — | 4 | — | — | 29 | ||||||||||||||||||||
Total cost of revenues | — | 2,178 | — | 284 | — | — | 2,462 | ||||||||||||||||||||
Gross profit | — | 1,664 | — | 168 | — | — | 1,832 | ||||||||||||||||||||
Selling, general and administrative expenses | (11 | ) | 464 | 2 | 59 | 20 | — | 534 | |||||||||||||||||||
Merger related costs | — | (26 | ) | — | — | — | — | (26 | ) | ||||||||||||||||||
Restructuring charge | — | 1 | — | — | — | — | 1 | ||||||||||||||||||||
Non-rental depreciation and amortization | 12 | 171 | 1 | 18 | — | — | 202 | ||||||||||||||||||||
Operating (loss) income | (1 | ) | 1,054 | (3 | ) | 91 | (20 | ) | — | 1,121 | |||||||||||||||||
Interest (income) expense, net | (2 | ) | 457 | 3 | 2 | 4 | (4 | ) | 460 | ||||||||||||||||||
Other (income) expense, net | (348 | ) | 380 | (1 | ) | 33 | (74 | ) | — | (10 | ) | ||||||||||||||||
Income (loss) before provision for income taxes | 349 | 217 | (5 | ) | 56 | 50 | 4 | 671 | |||||||||||||||||||
Provision for income taxes | 149 | 69 | — | 18 | 19 | — | 255 | ||||||||||||||||||||
Income (loss) before equity in net earnings (loss) of subsidiaries | 200 | 148 | (5 | ) | 38 | 31 | 4 | 416 | |||||||||||||||||||
Equity in net earnings (loss) of subsidiaries | 216 | 68 | 38 | — | — | (322 | ) | — | |||||||||||||||||||
Net income (loss) | 416 | 216 | 33 | 38 | 31 | (318 | ) | 416 | |||||||||||||||||||
Other comprehensive (loss) income | (144 | ) | (144 | ) | (144 | ) | (114 | ) | — | 402 | (144 | ) | |||||||||||||||
Comprehensive income (loss) | $ | 272 | $ | 72 | $ | (111 | ) | $ | (76 | ) | $ | 31 | $ | 84 | $ | 272 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 4 | $ | 1,513 | $ | (2 | ) | $ | 108 | $ | 7 | $ | — | $ | 1,630 | ||||||||||||
Net cash (used in) provided by investing activities | (4 | ) | (862 | ) | — | 1 | — | — | (865 | ) | |||||||||||||||||
Net cash (used in) provided by financing activities | — | (649 | ) | 2 | (2 | ) | (7 | ) | — | (656 | ) | ||||||||||||||||
Effect of foreign exchange rates | — | — | — | 9 | — | — | 9 | ||||||||||||||||||||
Net increase in cash and cash equivalents | — | 2 | — | 116 | — | — | 118 | ||||||||||||||||||||
Cash and cash equivalents at beginning of period | — | 18 | — | 161 | — | — | 179 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 20 | $ | — | $ | 277 | $ | — | $ | — | $ | 297 |
Parent | URNA | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
Foreign | SPV | ||||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 9 | $ | 1,440 | $ | (2 | ) | $ | 157 | $ | (47 | ) | $ | — | $ | 1,557 | |||||||||||
Net cash used in investing activities | (9 | ) | (1,062 | ) | — | (121 | ) | — | — | (1,192 | ) | ||||||||||||||||
Net cash (used in) provided by financing activities | — | (370 | ) | 2 | (7 | ) | 47 | — | (328 | ) | |||||||||||||||||
Effect of foreign exchange rates | — | — | — | (24 | ) | — | — | (24 | ) | ||||||||||||||||||
Net increase in cash and cash equivalents | — | 8 | — | 5 | — | — | 13 | ||||||||||||||||||||
Cash and cash equivalents at beginning of period | — | 8 | — | 150 | — | — | 158 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 16 | $ | — | $ | 155 | $ | — | $ | — | $ | 171 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data, unless otherwise indicated) |
• | A consistently superior standard of service to customers, often provided through a single point of contact; |
• | The further optimization of our customer mix and fleet mix, with a dual objective: to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth. We believe these efforts will lead to even better service of our target accounts, primarily large construction and industrial customers, as well as select local contractors. Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns; |
• | The implementation of “Lean” management techniques, including kaizen processes focused on continuous improvement, through a program we call Operation United 2. We have trained over 3,100 employees, over 70 percent of our district managers and over 60 percent of our branch managers on the Lean kaizen process. We continue to implement this program across our branch network, with the objectives of: reducing the cycle time associated with renting our equipment to customers; improving invoice accuracy and service quality; reducing the elapsed time for equipment pickup and delivery; and improving the effectiveness and efficiency of our repair and maintenance operations. As discussed in note 3 to our condensed consolidated financial statements, in the fourth quarter of 2015, we initiated a restructuring program focused on cost savings throughout the organization partially due to the Lean initiatives not fully generating the anticipated cost savings due to lower than expected rental volume in 2015. The savings generated from Lean initiatives are partially dependent on rental volume, and, though we have not yet achieved the anticipated level of Lean savings, we expect to continue to achieve savings through the Lean initiatives; and |
• | The continued expansion of our trench, power and pump footprint, as well as our tools offering, and the cross-selling of these services throughout our network. We believe that the expansion of our trench, power and pump business, as well as our tools offering, will further position United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings. |
• | Redeemed all of our 5 3/4 percent Senior Secured Notes, 8 3/8 percent Senior Subordinated Notes, 8 1/4 percent Senior Notes and 7 3/8 percent Senior Notes; |
• | Issued $1 billion principal amount of 4 5/8 percent Senior Secured Notes; |
• | Issued $800 principal amount of 5 1/2 percent Senior Notes; |
• | Issued $750 principal amount of 5 7/8 percent Senior Notes; |
• | Amended and extended our ABL facility, and increased the size of the facility to $2.5 billion; and |
• | Amended and extended our accounts receivable securitization facility, and increased the size of the facility to $625. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 187 | $ | 215 | $ | 413 | $ | 416 | |||||||
Diluted earnings per share | $ | 2.16 | $ | 2.25 | $ | 4.66 | $ | 4.27 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
Tax rate applied to items below | 38.6 | % | 38.0 | % | 38.4 | % | 38.7 | % | |||||||||||||||||||||||
Contribution to net income (after-tax) | Impact on diluted earnings per share | Contribution to net income (after-tax) | Impact on diluted earnings per share | Contribution to net income (after-tax) | Impact on diluted earnings per share | Contribution to net income (after-tax) | Impact on diluted earnings per share | ||||||||||||||||||||||||
Merger related costs (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 17 | $ | 0.17 | |||||||||||||||
Merger related intangible asset amortization (2) | (24 | ) | (0.28 | ) | (27 | ) | (0.28 | ) | (75 | ) | (0.85 | ) | (84 | ) | (0.87 | ) | |||||||||||||||
Impact on depreciation related to acquired RSC fleet and property and equipment (3) | — | — | 1 | — | — | — | 2 | 0.02 | |||||||||||||||||||||||
Impact of the fair value mark-up of acquired RSC fleet (4) | (5 | ) | (0.05 | ) | (4 | ) | (0.04 | ) | (16 | ) | (0.18 | ) | (12 | ) | (0.12 | ) | |||||||||||||||
Impact on interest expense related to fair value adjustment of acquired RSC indebtedness (5) | — | — | 1 | — | 1 | 0.01 | 2 | 0.02 | |||||||||||||||||||||||
Restructuring charge (6) | (2 | ) | (0.02 | ) | — | — | (5 | ) | (0.05 | ) | (1 | ) | (0.01 | ) | |||||||||||||||||
Asset impairment charge (7) | — | — | — | — | (2 | ) | (0.02 | ) | — | — | |||||||||||||||||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | (6 | ) | (0.07 | ) | — | — | (22 | ) | (0.25 | ) | (75 | ) | (0.78 | ) |
(1) | This reflects transaction costs associated with the April 2014 acquisition of National Pump. The income for the nine months ended September 30, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. |
(2) | This reflects the amortization of the intangible assets acquired in the RSC and National Pump acquisitions. |
(3) | This 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) | This 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) | This reflects a reduction of interest expense associated with the fair value mark-up of debt acquired in the RSC acquisition. |
(6) | This reflects severance and branch closure charges associated with our closed restructuring programs and our current restructuring program. |
(7) | This charge reflects write-offs of fixed assets in connection with our restructuring programs. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 187 | $ | 215 | $ | 413 | $ | 416 | |||||||
Provision for income taxes | 116 | 125 | 254 | 255 | |||||||||||
Interest expense, net | 110 | 107 | 349 | 460 | |||||||||||
Depreciation of rental equipment | 250 | 249 | 735 | 724 | |||||||||||
Non-rental depreciation and amortization | 61 | 66 | 192 | 202 | |||||||||||
EBITDA | $ | 724 | $ | 762 | $ | 1,943 | $ | 2,057 | |||||||
Merger related costs (1) | — | — | — | (26 | ) | ||||||||||
Restructuring charge (2) | 4 | — | 8 | 1 | |||||||||||
Stock compensation expense, net (3) | 11 | 12 | 33 | 37 | |||||||||||
Impact of the fair value mark-up of acquired RSC fleet (4) | 8 | 6 | 26 | 19 | |||||||||||
Adjusted EBITDA | $ | 747 | $ | 780 | $ | 2,010 | $ | 2,088 |
Nine Months Ended | |||||||
September 30, | |||||||
2016 | 2015 | ||||||
Net cash provided by operating activities | $ | 1,630 | $ | 1,557 | |||
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 | (7 | ) | (8 | ) | |||
Gain on sales of rental equipment | 146 | 164 | |||||
Gain on sales of non-rental equipment | 3 | 6 | |||||
Merger related costs (1) | — | 26 | |||||
Restructuring charge (2) | (8 | ) | (1 | ) | |||
Stock compensation expense, net (3) | (33 | ) | (37 | ) | |||
Loss on repurchase/redemption of debt securities and amendment of ABL facility | (36 | ) | (123 | ) | |||
Excess tax benefits from share-based payment arrangements | 53 | 57 | |||||
Changes in assets and liabilities | (113 | ) | 57 | ||||
Cash paid for interest | 294 | 304 | |||||
Cash paid for income taxes, net | 14 | 55 | |||||
EBITDA | $ | 1,943 | $ | 2,057 | |||
Add back: | |||||||
Merger related costs (1) | — | (26 | ) | ||||
Restructuring charge (2) | 8 | 1 | |||||
Stock compensation expense, net (3) | 33 | 37 | |||||
Impact of the fair value mark-up of acquired RSC fleet (4) | 26 | 19 | |||||
Adjusted EBITDA | $ | 2,010 | $ | 2,088 |
(1) | This reflects transaction costs associated with the April 2014 acquisition of National Pump. The income for the nine months ended September 30, 2015 reflects a decline in the fair value of the contingent cash consideration component of the National Pump purchase price. |
(2) | This 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) | This 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. |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended September 30, 2016 | |||||||||||
Equipment rentals | $ | 1,097 | $ | 225 | $ | 1,322 | |||||
Sales of rental equipment | 103 | 9 | 112 | ||||||||
Sales of new equipment | 27 | 3 | 30 | ||||||||
Contractor supplies sales | 16 | 3 | 19 | ||||||||
Service and other revenues | 23 | 2 | 25 | ||||||||
Total revenue | $ | 1,266 | $ | 242 | $ | 1,508 | |||||
Three Months Ended September 30, 2015 | |||||||||||
Equipment rentals | $ | 1,120 | $ | 206 | $ | 1,326 | |||||
Sales of rental equipment | 132 | 9 | 141 | ||||||||
Sales of new equipment | 33 | 5 | 38 | ||||||||
Contractor supplies sales | 18 | 3 | 21 | ||||||||
Service and other revenues | 23 | 1 | 24 | ||||||||
Total revenue | $ | 1,326 | $ | 224 | $ | 1,550 | |||||
Nine Months Ended September 30, 2016 | |||||||||||
Equipment rentals | $ | 3,067 | $ | 576 | $ | 3,643 | |||||
Sales of rental equipment | 334 | 27 | 361 | ||||||||
Sales of new equipment | 84 | 12 | 96 | ||||||||
Contractor supplies sales | 49 | 11 | 60 | ||||||||
Service and other revenues | 71 | 8 | 79 | ||||||||
Total revenue | $ | 3,605 | $ | 634 | $ | 4,239 | |||||
Nine Months Ended September 30, 2015 | |||||||||||
Equipment rentals | $ | 3,144 | $ | 527 | $ | 3,671 | |||||
Sales of rental equipment | 356 | 25 | 381 | ||||||||
Sales of new equipment | 94 | 16 | 110 | ||||||||
Contractor supplies sales | 51 | 9 | 60 | ||||||||
Service and other revenues | 65 | 7 | 72 | ||||||||
Total revenue | $ | 3,710 | $ | 584 | $ | 4,294 |
General rentals | Trench, power and pump | Total | |||||||||
Three Months Ended September 30, 2016 | |||||||||||
Equipment Rentals Gross Profit | $ | 469 | $ | 117 | $ | 586 | |||||
Equipment Rentals Gross Margin | 42.8 | % | 52.0 | % | 44.3 | % | |||||
Three Months Ended September 30, 2015 | |||||||||||
Equipment Rentals Gross Profit | $ | 500 | $ | 107 | $ | 607 | |||||
Equipment Rentals Gross Margin | 44.6 | % | 51.9 | % | 45.8 | % | |||||
Nine Months Ended September 30, 2016 | |||||||||||
Equipment Rentals Gross Profit | $ | 1,243 | $ | 274 | $ | 1,517 | |||||
Equipment Rentals Gross Margin | 40.5 | % | 47.6 | % | 41.6 | % | |||||
Nine Months Ended September 30, 2015 | |||||||||||
Equipment Rentals Gross Profit | $ | 1,339 | $ | 249 | $ | 1,588 | |||||
Equipment Rentals Gross Margin | 42.6 | % | 47.2 | % | 43.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||||||
Total gross margin | 43.5 | % | 44.5 | % | (100) bps | 41.2% | 42.7% | (150) bps | |||||
Equipment rentals | 44.3 | % | 45.8 | % | (150) bps | 41.6% | 43.3% | (170) bps | |||||
Sales of rental equipment | 39.3 | % | 39.7 | % | (40) bps | 40.4% | 43.0% | (260) bps | |||||
Sales of new equipment | 16.7 | % | 18.4 | % | (170) bps | 17.7% | 17.3% | 40 bps | |||||
Contractor supplies sales | 31.6 | % | 28.6 | % | 300 bps | 31.7% | 30.0% | 170 bps | |||||
Service and other revenues | 60.0 | % | 58.3 | % | 170 bps | 59.5% | 59.7% | (20) bps |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | ||||
Selling, general and administrative ("SG&A") expense | $179 | $178 | 0.6% | $533 | $534 | (0.2)% | |||
SG&A expense as a percentage of revenue | 11.9% | 11.5% | 40 bps | 12.6% | 12.4% | 20 bps | |||
Merger related costs | — | — | —% | — | (26) | (100.0)% | |||
Restructuring charge | 4 | — | —% | 8 | 1 | 700.0% | |||
Non-rental depreciation and amortization | 61 | 66 | (7.6)% | 192 | 202 | (5.0)% | |||
Interest expense, net | 110 | 107 | 2.8% | 349 | 460 | (24.1)% | |||
Other income, net | (1) | (1) | —% | (3) | (10) | (70.0)% | |||
Provision for income taxes | 116 | 125 | (7.2)% | 254 | 255 | (0.4)% | |||
Effective tax rate | 38.3% | 36.8% | 150 bps | 38.1% | 38.0% | 10 bps |
ABL facility: | |||
Borrowing capacity, net of letters of credit | $ | 716 | |
Outstanding debt, net of debt issuance costs | 1,737 | ||
Interest rate at September 30, 2016 | 2.0 | % | |
Average month-end debt outstanding (1) | 1,393 | ||
Weighted-average interest rate on average debt outstanding | 2.1 | % | |
Maximum month-end debt outstanding (1) | 1,747 | ||
Accounts receivable securitization facility: | |||
Borrowing capacity | 44 | ||
Outstanding debt, net of debt issuance costs | 579 | ||
Interest rate at September 30, 2016 | 1.4 | % | |
Average month-end debt outstanding | 539 | ||
Weighted-average interest rate on average debt outstanding | 1.2 | % | |
Maximum month-end debt outstanding | 580 |
Corporate Rating | Outlook | ||
Moody’s | Ba3 | Stable | |
Standard & Poor’s | BB- | Stable |
Nine Months Ended | |||||||
September 30, | |||||||
2016 | 2015 | ||||||
Net cash provided by operating activities | $ | 1,630 | $ | 1,557 | |||
Purchases of rental equipment | (1,145 | ) | (1,425 | ) | |||
Purchases of non-rental equipment | (65 | ) | (76 | ) | |||
Proceeds from sales of rental equipment | 361 | 381 | |||||
Proceeds from sales of non-rental equipment | 12 | 14 | |||||
Excess tax benefits from share-based payment arrangements | 53 | 57 | |||||
Free cash flow | $ | 846 | $ | 508 |
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | |||||||||||||||
Debt and capital leases (1) | $ | 7 | $ | 609 | $ | 20 | $ | 11 | $ | 4 | $ | 7,406 | $ | 8,057 | |||||||
Interest due on debt (2) | 97 | 385 | 378 | 378 | 377 | 1,046 | 2,661 | ||||||||||||||
Operating leases (1): | |||||||||||||||||||||
Real estate | 26 | 96 | 78 | 59 | 40 | 58 | 357 | ||||||||||||||
Non-rental equipment | 10 | 38 | 31 | 25 | 17 | 11 | 132 | ||||||||||||||
Service agreements (3) | 5 | 13 | 3 | — | — | — | 21 | ||||||||||||||
Purchase obligations (4) | 125 | 17 | — | — | — | — | 142 | ||||||||||||||
Total (5) | $ | 270 | $ | 1,158 | $ | 510 | $ | 473 | $ | 438 | $ | 8,521 | $ | 11,370 |
(1) | The payments due with respect to a period represent (i) in the case of debt and capital leases, the scheduled principal payments due in such period, and (ii) in the case of operating leases, the minimum lease payments due in such period under non-cancelable operating leases. |
(2) | Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of September 30, 2016. |
(3) | These primarily represent service agreements with third parties to provide wireless and network services. |
(4) | As of September 30, 2016, we had outstanding purchase orders, which were negotiated in the ordinary course of business, with our equipment and inventory suppliers. These purchase commitments can generally be cancelled by us with 30 days notice and without cancellation penalties. The equipment and inventory receipts from the suppliers for these purchases and related payments to the suppliers are expected to be completed throughout 2016 and 2017. |
(5) | This information excludes $2 of unrecognized tax benefits. It is not possible to estimate the time period during which these unrecognized tax benefits may be paid to tax authorities. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program (2) | |||||||||
July 1, 2016 to July 31, 2016 | 805,244 | (1) | $ | 68.98 | 804,606 | — | |||||||
August 1, 2016 to August 31, 2016 | 192,322 | (1) | $ | 78.40 | 191,100 | — | |||||||
September 1, 2016 to September 30, 2016 | 1,057,005 | (1) | $ | 77.61 | 1,056,544 | — | |||||||
Total | 2,054,571 | $ | 74.30 | 2,052,250 | $ | 412,996,985 |
(1) | In July 2016, August 2016 and September 2016, 638, 1,222 and 461 shares, respectively, were withheld by Holdings to satisfy tax withholding obligations upon the vesting of restricted stock unit awards. These shares were not acquired pursuant to any repurchase plan or program. |
(2) | On July 21, 2015, our Board authorized a $1 billion share repurchase program which we intend to complete within 18 months of its initiation in November 2015. |
Item 6. | Exhibits |
3(a) | Restated Certificate of Incorporation of United Rentals, Inc., dated March 16, 2009 (incorporated by reference to Exhibit 3.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on March 17, 2009) |
3(b) | By-laws of United Rentals, Inc., amended as of September 8, 2016 (incorporated by reference to Exhibit 3.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on September 14, 2016) |
3(c) | Restated Certificate of Incorporation of United Rentals (North America), Inc., dated April 30, 2012 (incorporated by reference to Exhibit 3(c) of the United Rentals, Inc. and United Rentals (North America), Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2013) |
3(d) | By-laws of United Rentals (North America), Inc. dated May 8, 2013 (incorporated by reference to Exhibit 3(d) of the United Rentals, Inc. and United Rentals (North America), Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2013) |
4 | Indenture for the 5 7/8 percent Senior Notes, dated as of May 13, 2016, among United Rentals (North America), Inc. (the “Company”), United Rentals, Inc., the Company’s subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the Form of 2026 Note) (incorporated by reference to Exhibit 4.1 of the United Rentals, Inc. Report on Form 8-K filed on May 13, 2016) |
10 | Assignment and Acceptance Agreement and Amendment No. 5 to Third Amended and Restated Receivables Purchase Agreement and Amendment No. 3 to Third Amended and Restated Purchase and Contribution Agreement, dated as of August 30, 2016, by and among United Rentals (North America), Inc., United Rentals Receivables LLC II, United Rentals, Inc., Liberty Street Funding LLC, Gotham Funding Corporation, Fairway Finance Company, LLC, The Bank of Nova Scotia, PNC Bank, National Association, SunTrust Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, and Bank of Montreal (incorporated by reference to Exhibit 10.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on August 30, 2016) |
12* | Computation of Ratio of Earnings to Fixed Charges |
31(a)* | Rule 13a-14(a) Certification by Chief Executive Officer |
31(b)* | Rule 13a-14(a) Certification by Chief Financial Officer |
32(a)** | Section 1350 Certification by Chief Executive Officer |
32(b)** | Section 1350 Certification by Chief Financial Officer |
101 | The following materials from the Quarterly Report on Form 10-Q for United Rentals, Inc. and United Rentals (North America), Inc., for the quarter ended September 30, 2016 filed on October 19, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statement of Stockholders' Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements. |
* | Filed herewith. |
** | Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act. |
UNITED RENTALS, INC. | ||||
Dated: | October 19, 2016 | By: | /S/ JESSICA T. GRAZIANO | |
Jessica T. Graziano Vice President, Controller and Principal Accounting Officer | ||||
UNITED RENTALS (NORTH AMERICA), INC. | ||||
Dated: | October 19, 2016 | By: | /S/ JESSICA T. GRAZIANO | |
Jessica T. Graziano Vice President, Controller and Principal Accounting Officer | ||||
Year Ended December 31, | Nine Months Ended September 30, | ||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||
Earnings: | |||||||||||||||||||
Income before provision for income taxes | $ | 164 | $ | 88 | $ | 605 | $ | 850 | $ | 963 | $ | 667 | |||||||
Add: | |||||||||||||||||||
Fixed charges, net of capitalized interest | 271 | 504 | 521 | 520 | 492 | 349 | |||||||||||||
Total earnings available for fixed charges | 435 | 592 | 1,126 | 1,370 | 1,455 | 1,016 | |||||||||||||
Fixed charges (1): | |||||||||||||||||||
Interest expense, net | 228 | 512 | 475 | 555 | 567 | 349 | |||||||||||||
Add back interest income, which is netted in interest expense | 1 | 2 | 1 | 2 | 2 | 1 | |||||||||||||
Add back losses on bond repurchases/retirement of subordinated convertible debentures, included in interest expense | (5 | ) | (72 | ) | (3 | ) | (80 | ) | (123 | ) | (36 | ) | |||||||
Interest expense—subordinated convertible debentures | 7 | 4 | 3 | — | — | — | |||||||||||||
Capitalized interest | — | — | — | — | — | — | |||||||||||||
Interest component of rent expense | 40 | 58 | 45 | 43 | 46 | 35 | |||||||||||||
Fixed charges | $ | 271 | $ | 504 | $ | 521 | $ | 520 | $ | 492 | $ | 349 | |||||||
Ratio of earnings to fixed charges | 1.6x | 1.2x | 2.2x | 2.6x | 3.0x | 2.9x |
(1) | Fixed charges consist of interest expense, which includes amortization of deferred finance charges, interest expense-subordinated debentures, capitalized interest and imputed interest on our lease obligations. The interest component of rent was determined based on an estimate of a reasonable interest factor at the inception of the leases. |
1. | I have reviewed this quarterly report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc. for the quarterly period ended September 30, 2016; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report; |
4. | The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and. |
d) | disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and |
5. | The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of the registrants' board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting. |
/S/ MICHAEL J. KNEELAND |
Michael J. Kneeland |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of United Rentals, Inc. and United Rentals (North America), Inc. for the quarterly period ended September 30, 2016; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report; |
4. | The registrants' other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and. |
d) | disclosed in this report any change in the registrants' internal control over financial reporting that occurred during the registrants' most recent fiscal quarter (the registrants' fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants' internal control over financial reporting; and |
5. | The registrants' other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants' auditors and the audit committee of the registrants' board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants' ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants' internal control over financial reporting. |
/S/ WILLIAM B. PLUMMER |
William B. Plummer |
Chief Financial Officer |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies. |
/S/ MICHAEL J. KNEELAND |
Michael J. Kneeland |
Chief Executive Officer |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Companies. |
/S/ WILLIAM B. PLUMMER |
William B. Plummer |
Chief Financial Officer |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 17, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | UNITED RENTALS INC /DE | |
Entity Central Index Key | 0001067701 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 84,224,499 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 55 | $ 55 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 111,944,470 | 111,586,585 |
Common stock, shares outstanding | 84,687,234 | 91,776,436 |
Treasury stock, shares | 27,257,236 | 19,810,149 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 187 | $ 215 | $ 413 | $ 416 | ||
Other comprehensive income (loss), net of tax: | ||||||
Foreign currency translation adjustments | (9) | (71) | 51 | (144) | ||
Fixed price diesel swaps | 0 | (1) | 3 | 0 | ||
Other comprehensive (loss) income | (9) | (72) | 54 | (144) | ||
Comprehensive income | [1] | $ 178 | $ 143 | $ 467 | $ 272 | |
|
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 9 months ended Sep. 30, 2016 - USD ($) shares in Millions, $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Accumulated Other Comprehensive (Loss) Income |
[2] | |||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance (in shares) at Dec. 31, 2015 | 92 | [1] | 20 | |||||||||
Balance at Dec. 31, 2015 | $ 1,476 | $ 1 | $ 2,197 | $ 1,088 | $ (1,560) | $ (250) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 413 | 413 | ||||||||||
Foreign currency translation adjustments | 51 | 51 | ||||||||||
Fixed price diesel swaps | 3 | 3 | ||||||||||
Stock compensation expense, net | 33 | |||||||||||
Shares repurchased and retired | (11) | |||||||||||
Repurchase of common stock (in shares) | (7) | [1] | 7 | |||||||||
Repurchase of common stock | $ (477) | |||||||||||
Excess tax benefits from share-based payment arrangements, net | 51 | |||||||||||
Balance (in shares) at Sep. 30, 2016 | 85 | [1] | 27 | |||||||||
Balance at Sep. 30, 2016 | $ 1,539 | $ 1 | $ 2,270 | $ 1,501 | $ (2,037) | $ (196) | ||||||
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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) shares in Millions |
12 Months Ended |
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Dec. 31, 2015
shares
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Statement of Stockholders' Equity [Abstract] | |
Increase (decrease) in common stock outstanding (in shares) | (6) |
Organization, Description of Business and Basis of Presentation |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Basis of Presentation | Organization, Description of Business and Basis of Presentation United Rentals, Inc. (“Holdings,” “URI” or the “Company”) is principally a holding company and conducts its operations primarily through its wholly owned subsidiary, United Rentals (North America), Inc. (“URNA”), and subsidiaries of URNA. Holdings’ primary asset is its sole ownership of all issued and outstanding shares of common stock of URNA. URNA’s various credit agreements and debt instruments place restrictions on its ability to transfer funds to its shareholder. We rent equipment to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities in the United States and Canada. In addition to renting equipment, we sell new and used rental equipment, as well as related contractor supplies, parts and service. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the accounting policies described in our annual report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”) and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the 2015 Form 10-K. In our opinion, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of financial condition, operating results and cash flows for the interim periods presented have been made. Interim results of operations are not necessarily indicative of the results of the full year. New Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, and in subsequent updates, the Financial Accounting Standards Board (“FASB”) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has agreed to a one-year deferral of the original effective date of this guidance and as a result it will be effective for fiscal years and interim periods beginning after December 15, 2017. The FASB's update allows entities to apply the new guidance as of the original effective date (for fiscal years and interim periods beginning after December 15, 2016). We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable. Leases. In March 2016, the FASB issued guidance (“Topic 842”) to increase transparency and comparability among organizations by requiring i) recognition of lease assets and lease liabilities on the balance sheet and ii) disclosure of key information about leasing arrangements. The accounting applied by lessors under Topic 842 is largely unchanged from previous GAAP. Some changes to the lessor accounting guidance were made to align both of the following: i) the lessor accounting guidance with certain changes made to the lessee accounting guidance and ii) key aspects of the lessor accounting model with revenue recognition guidance. Topic 842 will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Improvements to Employee Share-Based Payment Accounting. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Different components of the guidance require prospective, retrospective and/or modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Statement of Cash Flows. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires retrospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our reportable segments are i) general rentals and ii) trench, power and pump. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of nine geographic regions—Industrial (which serves the geographic Gulf region and has a strong industrial presence), Mid-Atlantic, Midwest, Northeast, Pacific West, South-Central, South, Southeast and Western Canada—and operates throughout the United States and Canada. The trench, power and pump segment includes the rental of specialty construction products such as i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment and iii) pumps primarily used by municipalities, industrial plants, and mining, construction, and agribusiness customers. The trench, power and pump segment is comprised of the following regions, each of which primarily rents the corresponding equipment type described above: (i) the Trench Safety region, (ii) the Power and HVAC region, and (iii) the Pump Solutions region. The trench, power and pump segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment operates throughout the United States and in Canada. These segments align our external segment reporting with how management evaluates and allocates resources. We evaluate segment performance based on segment equipment rentals gross profit. The following tables set forth financial information by segment.
Equipment rentals gross profit is the primary measure management reviews to make operating decisions and assess segment performance. The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes:
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Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | Restructuring Charges Closed Restructuring Programs We have two closed restructuring programs. The first was initiated in 2008 in recognition of a challenging economic environment and was completed in 2011. The second closed restructuring program was initiated following the April 30, 2012 acquisition of RSC Holdings Inc. ("RSC"), and was completed in 2013. The restructuring charges under the closed restructuring programs include severance costs associated with headcount reductions, as well as branch closure charges which principally relate to continuing lease obligations at vacant facilities. 2015-2016 Cost Savings Restructuring Program In the fourth quarter of 2015, we initiated a restructuring program in response to challenges in our operating environment. In particular, during 2015, we experienced volume and pricing pressure in our general rental business and our Pump Solutions region associated with upstream oil and gas customers. Additionally, our Lean initiatives did not fully generate the anticipated cost savings due to lower than expected growth. Though we expect solid industry growth in the foreseeable future, the restructuring program was initiated in an effort to reduce costs in an environment with continuing pressures on volume and pricing. We expect to complete the restructuring program in 2016, and expect the total costs incurred under the program to be approximately $20, including $11 recognized through September 30, 2016. The table below provides certain information concerning our restructuring charges for the nine months ended September 30, 2016:
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Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives We recognize all derivative instruments as either assets or liabilities at fair value, and recognize changes in the fair value of the derivative instruments based on the designation of the derivative. We are exposed to certain risks relating to our ongoing business operations. During the nine months ended September 30, 2016 and 2015, the risks we managed using derivative instruments were diesel price risk and foreign currency exchange rate risk. At September 30, 2016, we had outstanding fixed price swap contracts on diesel purchases which were entered into to mitigate the price risk associated with forecasted purchases of diesel. During the nine months ended September 30, 2016, we entered into forward contracts to purchase Canadian dollars to mitigate the foreign currency exchange rate risk associated with certain Canadian dollar denominated intercompany loans. There were no outstanding forward contracts to purchase Canadian dollars at September 30, 2016. Fixed Price Diesel Swaps The fixed price swap contracts on diesel purchases that were outstanding at September 30, 2016 were designated and qualify as cash flow hedges and the effective portion of the gain or loss on these contracts is reported as a component of accumulated other comprehensive income and is reclassified into earnings in the period during which the hedged transaction affects earnings (i.e., when the hedged gallons of diesel are used). The remaining gain or loss on the fixed price swap contracts in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion), is recognized in our condensed consolidated statements of income during the current period. As of September 30, 2016, we had outstanding fixed price swap contracts covering 9.8 million gallons of diesel which will be purchased throughout 2016, 2017 and 2018. Foreign Currency Forward Contracts The forward contracts to purchase Canadian dollars, which were all settled as of September 30, 2016, represented derivative instruments not designated as hedging instruments and gains or losses due to changes in the fair value of the forward contracts were recognized in our condensed consolidated statements of income during the period in which the changes in fair value occurred. During the three and nine months ended September 30, 2016, forward contracts were used to purchase $301 and $552 Canadian dollars, respectively, representing the total amount due at maturity for certain Canadian dollar denominated intercompany loans that were settled during the three and nine months ended September 30, 2016. Upon maturity, the proceeds from the forward contracts were used to pay down the Canadian dollar denominated intercompany loans. Financial Statement Presentation As of September 30, 2016 and December 31, 2015, immaterial amounts ($6 or less) were reflected in prepaid expenses and other assets, accrued expenses and other liabilities, and accumulated other comprehensive income in our condensed consolidated balance sheets associated with the outstanding fixed price swap contracts that were designated and qualify as cash flow hedges. The effect of our derivative instruments on our condensed consolidated statements of income for the three and nine months ended September 30, 2016 and 2015 was as follows:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We account for certain assets and liabilities at fair value. We categorize each of our fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include:
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Assets and Liabilities Measured at Fair Value As of September 30, 2016 and December 31, 2015, our only assets and liabilities measured at fair value were our fixed price diesel swaps contracts, which are Level 2 derivatives measured at fair value on a recurring basis. As of September 30, 2016 and December 31, 2015, immaterial amounts ($6 or less) were reflected in prepaid expenses and other assets, and accrued expenses and other liabilities in our condensed consolidated balance sheets, reflecting the fair values of the fixed price diesel swaps contracts. As discussed in note 4 to the condensed consolidated financial statements, we entered into the fixed price swap contracts on diesel purchases to mitigate the price risk associated with forecasted purchases of diesel. Fair value is determined based on observable market data. As of September 30, 2016, we have fixed price swap contracts that mature throughout 2016, 2017 and 2018 covering 9.8 million gallons of diesel which we will buy at the average contract price of $2.60 per gallon, while the average forward price for the hedged gallons was $2.56 per gallon as of September 30, 2016. Fair Value of Financial Instruments The carrying amounts reported in our condensed consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The fair values of our senior secured asset-based revolving credit facility (“ABL facility”), accounts receivable securitization facility and capital leases approximated their book values as of September 30, 2016 and December 31, 2015. The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of September 30, 2016 and December 31, 2015 have been calculated based upon available market information, and were as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following:
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Loan Covenants and Compliance As of September 30, 2016, we were in compliance with the covenants and other provisions of the ABL facility, the accounts receivable securitization facility and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of September 30, 2016, specified availability under the ABL facility exceeded the required threshold and, as a result, this maintenance covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility. |
Legal and Regulatory Matters |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | Legal and Regulatory Matters We are subject to a number of claims and proceedings that generally arise in the ordinary course of our business. These matters include, but are not limited to, general liability claims (including personal injury, property and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations, contract and real estate matters, and other general business litigation. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals for matters where we have established them, we currently believe that any liabilities ultimately resulting from such claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
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Condensed Consolidating Financial Information of Guarantor Subsidiaries |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information of Guarantor Subsidiaries | Condensed Consolidating Financial Information of Guarantor Subsidiaries URNA is 100 percent owned by Holdings (“Parent”) and, as of September 30, 2016 and/or December 31, 2015, had outstanding (i) certain indebtedness that is guaranteed by both Parent and, with the exception of its U.S. special purpose vehicle which holds receivable assets relating to the Company’s accounts receivable securitization facility (the “SPV”), all of URNA’s U.S. subsidiaries (the “guarantor subsidiaries”) and (ii) certain indebtedness that was guaranteed only by the guarantor subsidiaries (specifically, the 8 1/4 percent Senior Notes). As discussed in note 6 to the condensed consolidated financial statements, in May 2016, all of the 8 1/4 percent Senior Notes were redeemed. Other than the guarantee by certain Canadian subsidiaries of URNA's indebtedness under the ABL facility, none of URNA’s indebtedness is guaranteed by URNA's foreign subsidiaries or the SPV (together, the “non-guarantor subsidiaries”). The receivable assets owned by the SPV have been sold or contributed by URNA to the SPV and are not available to satisfy the obligations of URNA or Parent’s other subsidiaries. The guarantor subsidiaries are all 100 percent-owned and the guarantees are made on a joint and several basis. The guarantees are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met or designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants. The guarantees are also subject to subordination provisions (to the same extent that the obligations of the issuer under the relevant notes are subordinated to other debt of the issuer) and to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws. Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that the guarantees of the guarantor subsidiaries comply with the conditions set forth in Rule 3-10 and therefore continue to utilize Rule 3-10 to present condensed consolidating financial information for Holdings, URNA, the guarantor subsidiaries and the non-guarantor subsidiaries. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management believes that such information would not be material to investors. However, condensed consolidating financial information is presented. URNA covenants in the ABL facility, accounts receivable securitization facility and the other agreements governing our debt impose operating and financial restrictions on URNA, Parent and the guarantor subsidiaries, including limitations on the ability to make share repurchases and dividend payments. As of September 30, 2016, the amount available for distribution under the most restrictive of these covenants was $332. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of September 30, 2016, our total available capacity for making share repurchases and dividend payments, which includes URNA’s capacity to make restricted payments and the intercompany receivable balance of Parent, was $561. The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2016
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2016
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2015
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2016
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2015
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2016
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2015
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Organization, Description of Business and Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Revenue from Contracts with Customers. In May 2014, and in subsequent updates, the Financial Accounting Standards Board (“FASB”) issued guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has agreed to a one-year deferral of the original effective date of this guidance and as a result it will be effective for fiscal years and interim periods beginning after December 15, 2017. The FASB's update allows entities to apply the new guidance as of the original effective date (for fiscal years and interim periods beginning after December 15, 2016). We expect to adopt this guidance when effective, and the impact on our financial statements is not currently estimable. Leases. In March 2016, the FASB issued guidance (“Topic 842”) to increase transparency and comparability among organizations by requiring i) recognition of lease assets and lease liabilities on the balance sheet and ii) disclosure of key information about leasing arrangements. The accounting applied by lessors under Topic 842 is largely unchanged from previous GAAP. Some changes to the lessor accounting guidance were made to align both of the following: i) the lessor accounting guidance with certain changes made to the lessee accounting guidance and ii) key aspects of the lessor accounting model with revenue recognition guidance. Topic 842 will be effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Improvements to Employee Share-Based Payment Accounting. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Different components of the guidance require prospective, retrospective and/or modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our financial statements. Statement of Cash Flows. In August 2016, the FASB issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted. The guidance requires retrospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. |
Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information by segment | The following tables set forth financial information by segment.
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Reconciliation to equipment rentals gross profit | The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes:
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Restructuring Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring reserve by type of cost | The table below provides certain information concerning our restructuring charges for the nine months ended September 30, 2016:
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Derivatives (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of derivatives on consolidated statements of income | The effect of our derivative instruments on our condensed consolidated statements of income for the three and nine months ended September 30, 2016 and 2015 was as follows:
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of financial instruments | The estimated fair values of our financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of September 30, 2016 and December 31, 2015 have been calculated based upon available market information, and were as follows:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following:
___________________
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The following table sets forth the computation of basic and diluted earnings per share (shares in thousands):
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Condensed Consolidating Financial Information of Guarantor Subsidiaries (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | The condensed consolidating financial information of Parent and its subsidiaries is as follows: CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2016
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015
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CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME | CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2016
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2015
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2016
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2015
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CONDENSED CONSOLIDATING CASH FLOW INFORMATION | CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2016
CONDENSED CONSOLIDATING CASH FLOW INFORMATION For the Nine Months Ended September 30, 2015
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Segment Information (Reconciliation to income (loss) from continuing operations) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | $ 656 | $ 690 | $ 1,746 | $ 1,832 |
Selling, general and administrative expenses | (179) | (178) | (533) | (534) |
Merger related costs | 0 | 0 | 0 | 26 |
Restructuring charge | (4) | 0 | (8) | (1) |
Non-rental depreciation and amortization | (61) | (66) | (192) | (202) |
Interest expense, net | (110) | (107) | (349) | (460) |
Other income, net | 1 | 1 | 3 | 10 |
Income before provision for income taxes | 303 | 340 | 667 | 671 |
Equipment rentals | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | 586 | 607 | 1,517 | 1,588 |
Other lines of business | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | $ 70 | $ 83 | $ 229 | $ 244 |
Restructuring Charges (Narrative) (Details) $ in Millions |
Sep. 30, 2016
USD ($)
restructuring_program
|
---|---|
Restructuring Cost and Reserve | |
Expected restructuring costs | $ 20 |
Restructuring costs incurred to date | $ 11 |
Closed Restructuring Programs | |
Restructuring Cost and Reserve | |
Number of restructuring programs | restructuring_program | 2 |
Derivatives (Narrative) (Details) gal in Millions, CAD in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2016
CAD
|
Sep. 30, 2016
CAD
gal
|
|
Diesel swap | ||
Derivative [Line Items] | ||
Fixed price swap contract (in gallons) | gal | 9.8 | |
Foreign contracts | ||
Derivative [Line Items] | ||
Derivative purchases of underlying currency (in Canadian Dollars) | CAD | CAD 301 | CAD 552 |
Fair Value Measurements (Narrative) (Details) - Diesel swap gal in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / gal
gal
| |
Derivatives, Fair Value [Line Items] | |
Fixed price swap contract (in gallons) | gal | 9.8 |
Average contract price (in dollars per gallon) | 2.60 |
Average forward price (in dollars per gallon) | 2.56 |
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 5,605 | $ 5,916 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 5,855 | $ 6,030 |
Debt (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
ABL Facility | |
Debt Instrument | |
Maximum revolving credit amount percentage | 10.00% |
Condensed Consolidating Financial Information of Guarantor Subsidiaries - CONDENSED CONSOLIDATING CASH FLOW INFORMATION (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | $ 1,630 | $ 1,557 |
Net cash (used in) provided by investing activities | (865) | (1,192) |
Net cash (used in) provided by financing activities | (656) | (328) |
Effect of foreign exchange rates | 9 | (24) |
Net increase in cash and cash equivalents | 118 | 13 |
Cash and cash equivalents at beginning of period | 179 | 158 |
Cash and cash equivalents at end of period | 297 | 171 |
Parent | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 4 | 9 |
Net cash (used in) provided by investing activities | (4) | (9) |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
URNA | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 1,513 | 1,440 |
Net cash (used in) provided by investing activities | (862) | (1,062) |
Net cash (used in) provided by financing activities | (649) | (370) |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 2 | 8 |
Cash and cash equivalents at beginning of period | 18 | 8 |
Cash and cash equivalents at end of period | 20 | 16 |
Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | (2) | (2) |
Net cash (used in) provided by investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 2 | 2 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Non Guarantor Subsidiaries - Foreign | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 108 | 157 |
Net cash (used in) provided by investing activities | 1 | (121) |
Net cash (used in) provided by financing activities | (2) | (7) |
Effect of foreign exchange rates | 9 | (24) |
Net increase in cash and cash equivalents | 116 | 5 |
Cash and cash equivalents at beginning of period | 161 | 150 |
Cash and cash equivalents at end of period | 277 | 155 |
Non Guarantor Subsidiaries - SPV | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 7 | (47) |
Net cash (used in) provided by investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | (7) | 47 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by (used in) operating activities | 0 | 0 |
Net cash (used in) provided by investing activities | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 |
Effect of foreign exchange rates | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |
!C9
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