Condensed Consolidating Financial Information of Guarantor Subsidiaries

9 Months Ended

Sep. 30, 2017

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 has certain outstanding 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”). 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, designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants or, other than with respect to the guarantees of the 7 ⁵/₈ percent Senior Notes due 2022 and the 5 ³/₄ percent Senior Notes due 2024, the notes being rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA. 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, 2017, the amount available for distribution under the most restrictive of these covenants was $536. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of September 30, 2017, 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 $1.234 billion.

The condensed consolidating financial information of Parent and its subsidiaries is as follows:

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2017

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			SPV
ASSETS
Cash and cash equivalents	$	—	$	23		$	—		$	301		$	—	$	—		$	324
Accounts receivable, net	—		39			—			123			989		—			1,151
Intercompany receivable (payable)	698		(481		)	(204		)	(129		)	—		116			—
Inventory	—		74			—			8			—		—			82
Prepaid expenses and other assets	6		74			—			2			—		—			82
Total current assets	704		(271		)	(204		)	305			989		116			1,639
Rental equipment, net	—		6,819			—			572			—		—			7,391
Property and equipment, net	38		338			33			42			—		—			451
Investments in subsidiaries	1,488		1,206			1,074			—			—		(3,768		)	—
Goodwill	—		3,226			—			267			—		—			3,493
Other intangible assets, net	—		709			—			50			—		—			759
Other long-term assets	4		7			—			—			—		—			11
Total assets	$	2,234	$	12,034		$	903		$	1,236		$	989	$	(3,652	)	$	13,744
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	25		$	—		$	2		$	666	$	—		$	694
Accounts payable	—		564			—			48			—		—			612
Accrued expenses and other liabilities	—		415			17			34			1		—			467
Total current liabilities	1		1,004			17			84			667		—			1,773
Long-term debt	1		7,555			118			3			—		—			7,677
Deferred taxes	21		1,916			—			75			—		—			2,012
Other long-term liabilities	—		71			—			—			—		—			71
Total liabilities	23		10,546			135			162			667		—			11,533
Total stockholders’ equity (deficit)	2,211		1,488			768			1,074			322		(3,652		)	2,211
Total liabilities and stockholders’ equity (deficit)	$	2,234	$	12,034		$	903		$	1,236		$	989	$	(3,652	)	$	13,744

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2016

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			SPV
ASSETS
Cash and cash equivalents	$	—	$	21		$	—		$	291		$	—	$	—		$	312
Accounts receivable, net	—		38			—			96			786		—			920
Intercompany receivable (payable)	336		(137		)	(188		)	(115		)	—		104			—
Inventory	—		61			—			7			—		—			68
Prepaid expenses and other assets	5		51			—			5			—		—			61
Total current assets	341		34			(188		)	284			786		104			1,361
Rental equipment, net	—		5,709			—			480			—		—			6,189
Property and equipment, net	38		326			26			40			—		—			430
Investments in subsidiaries	1,292		1,013			978			—			—		(3,283		)	—
Goodwill	—		3,013			—			247			—		—			3,260
Other intangible assets, net	—		686			—			56			—		—			742
Other long-term assets	—		6			—			—			—		—			6
Total assets	$	1,671	$	10,787		$	816		$	1,107		$	786	$	(3,179	)	$	11,988
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	25		$	—		$	3		$	568	$	—		$	597
Accounts payable	—		217			—			26			—		—			243
Accrued expenses and other liabilities	—		305			13			25			1		—			344
Total current liabilities	1		547			13			54			569		—			1,184
Long-term debt	2		7,076			111			4			—		—			7,193
Deferred taxes	20		1,805			—			71			—		—			1,896
Other long-term liabilities	—		67			—			—			—		—			67
Total liabilities	23		9,495			124			129			569		—			10,340
Total stockholders’ equity (deficit)	1,648		1,292			692			978			217		(3,179		)	1,648
Total liabilities and stockholders’ equity (deficit)	$	1,671	$	10,787		$	816		$	1,107		$	786	$	(3,179	)	$	11,988

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2017

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign		SPV
Revenues:
Equipment rentals	$	—		$	1,407	$	—		$	129	$	—		$	—		$	1,536
Sales of rental equipment	—			118		—			21		—			—			139
Sales of new equipment	—			36		—			4		—			—			40
Contractor supplies sales	—			18		—			3		—			—			21
Service and other revenues	—			27		—			3		—			—			30
Total revenues	—			1,606		—			160		—			—			1,766
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			502		—			55		—			—			557
Depreciation of rental equipment	—			266		—			24		—			—			290
Cost of rental equipment sales	—			73		—			11		—			—			84
Cost of new equipment sales	—			31		—			3		—			—			34
Cost of contractor supplies sales	—			12		—			2		—			—			14
Cost of service and other revenues	—			12		—			2		—			—			14
Total cost of revenues	—			896		—			97		—			—			993
Gross profit	—			710		—			63		—			—			773
Selling, general and administrative expenses	42			167		—			19		9			—			237
Merger related costs	—			16		—			—		—			—			16
Restructuring charge	—			8		—			1		—			—			9
Non-rental depreciation and amortization	3			54		—			6		—			—			63
Operating (loss) income	(45		)	465		—			37		(9		)	—			448
Interest (income) expense, net	(5		)	133		1			1		3			(2		)	131
Other (income) expense, net	(144		)	154		—			10		(25		)	—			(5		)
Income (loss) before provision for income taxes	104			178		(1		)	26		13			2			322
Provision for income taxes	39			73		—			7		4			—			123
Income (loss) before equity in net earnings (loss) of subsidiaries	65			105		(1		)	19		9			2			199
Equity in net earnings (loss) of subsidiaries	134			29		19			—		—			(182		)	—
Net income (loss)	199			134		18			19		9			(180		)	199
Other comprehensive income (loss)	42			42		41			33		—			(116		)	42
Comprehensive income (loss)	$	241		$	176	$	59		$	52	$	9		$	(296	)	$	241

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Three Months Ended September 30, 2016

	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

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Nine Months EndedSeptember 30, 2017

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign		SPV
Revenues:
Equipment rentals	$	—		$	3,739	$	—		$	330	$	—		$	—		$	4,069
Sales of rental equipment	—			334		—			44		—			—			378
Sales of new equipment	—			113		—			13		—			—			126
Contractor supplies sales	—			53		—			7		—			—			60
Service and other revenues	—			75		—			11		—			—			86
Total revenues	—			4,314		—			405		—			—			4,719
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			1,397		—			159		—			—			1,556
Depreciation of rental equipment	—			738		—			66		—			—			804
Cost of rental equipment sales	—			202		—			23		—			—			225
Cost of new equipment sales	—			97		—			11		—			—			108
Cost of contractor supplies sales	—			37		—			5		—			—			42
Cost of service and other revenues	—			37		—			5		—			—			42
Total cost of revenues	—			2,508		—			269		—			—			2,777
Gross profit	—			1,806		—			136		—			—			1,942
Selling, general and administrative expenses	84			483		—			57		24			—			648
Merger related costs	—			32		—			—		—			—			32
Restructuring charge	—			27		—			1		—			—			28
Non-rental depreciation and amortization	11			162		—			16		—			—			189
Operating (loss) income	(95		)	1,102		—			62		(24		)	—			1,045
Interest (income) expense, net	(10		)	341		2			1		8			(4		)	338
Other (income) expense, net	(387		)	419		—			33		(70		)	—			(5		)
Income (loss) before provision for income taxes	302			342		(2		)	28		38			4			712
Provision for income taxes	102			140		—			7		14			—			263
Income (loss) before equity in net earnings (loss) of subsidiaries	200			202		(2		)	21		24			4			449
Equity in net earnings (loss) of subsidiaries	249			47		21			—		—			(317		)	—
Net income (loss)	449			249		19			21		24			(313		)	449
Other comprehensive income (loss)	75			75		75			61		—			(211		)	75
Comprehensive income (loss)	$	524		$	324	$	94		$	82	$	24		$	(524	)	$	524

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Nine Months EndedSeptember 30, 2016

	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
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

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months EndedSeptember 30, 2017

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			SPV
Net cash provided by (used in) operating activities	$	15		$	1,849		$	(2	)	$	83		$	(179	)	$	—	$	1,766
Net cash used in investing activities	(15		)	(2,145		)	—			(92		)	—			—		(2,252		)
Net cash provided by (used in) financing activities	—			298			2			(2		)	179			—		477
Effect of foreign exchange rates	—			—			—			21			—			—		21
Net increase in cash and cash equivalents	—			2			—			10			—			—		12
Cash and cash equivalents at beginning of period	—			21			—			291			—			—		312
Cash and cash equivalents at end of period	$	—		$	23		$	—		$	301		$	—		$	—	$	324

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months EndedSeptember 30, 2016

	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