Condensed Consolidating Financial Information of Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2018

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 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 June 30, 2018, the amount available for distribution under the most restrictive of these covenants was $804. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of June 30, 2018, 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 $2.001 billion.

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

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2018

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			SPV
ASSETS
Cash and cash equivalents	$	—	$	44		$	—		$	73		$	—	$	—		$	117
Accounts receivable, net	—		—			—			109			1,094		—			1,203
Intercompany receivable (payable)	1,197		(1,083		)	(98		)	(16		)	—		—			—
Inventory	—		85			—			9			—		—			94
Prepaid expenses and other assets	—		89			—			3			—		—			92
Total current assets	1,197		(865		)	(98		)	178			1,094		—			1,506
Rental equipment, net	—		7,642			—			571			—		—			8,213
Property and equipment, net	45		354			41			40			—		—			480
Investments in subsidiaries	1,939		1,053			908			—			—		(3,900		)	—
Goodwill	—		3,842			—			254			—		—			4,096
Other intangible assets, net	—		758			—			40			—		—			798
Other long-term assets	6		9			—			—			—		—			15
Total assets	$	3,187	$	12,793		$	851		$	1,083		$	1,094	$	(3,900	)	$	15,108
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	28		$	—		$	2		$	869	$	—		$	900
Accounts payable	—		787			—			72			—		—			859
Accrued expenses and other liabilities	—		429			13			27			1		—			470
Total current liabilities	1		1,244			13			101			870		—			2,229
Long-term debt	—		8,074			9			3			—		—			8,086
Deferred taxes	22		1,416			—			71			—		—			1,509
Other long-term liabilities	—		120			—			—			—		—			120
Total liabilities	23		10,854			22			175			870		—			11,944
Total stockholders’ equity (deficit)	3,164		1,939			829			908			224		(3,900		)	3,164
Total liabilities and stockholders’ equity (deficit)	$	3,187	$	12,793		$	851		$	1,083		$	1,094	$	(3,900	)	$	15,108

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2017

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			SPV
ASSETS
Cash and cash equivalents	$	—	$	23		$	—		$	329		$	—	$	—		$	352
Accounts receivable, net	—		56			—			119			1,058		—			1,233
Intercompany receivable (payable)	887		(677		)	(198		)	(124		)	—		112			—
Inventory	—		68			—			7			—		—			75
Prepaid expenses and other assets	4		219			111			2			—		(224		)	112
Total current assets	891		(311		)	(87		)	333			1,058		(112		)	1,772
Rental equipment, net	—		7,264			—			560			—		—			7,824
Property and equipment, net	41		352			32			42			—		—			467
Investments in subsidiaries	2,194		1,148			1,087			—			—		(4,429		)	—
Goodwill	—		3,815			—			267			—		—			4,082
Other intangible assets, net	—		827			—			48			—		—			875
Other long-term assets	3		7			—			—			—		—			10
Total assets	$	3,129	$	13,102		$	1,032		$	1,250		$	1,058	$	(4,541	)	$	15,030
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	25		$	—		$	2		$	695	$	—		$	723
Accounts payable	—		366			—			43			—		—			409
Accrued expenses and other liabilities	—		477			17			41			1		—			536
Total current liabilities	1		868			17			86			696		—			1,668
Long-term debt	1		8,596			117			3			—		—			8,717
Deferred taxes	21		1,324			—			74			—		—			1,419
Other long-term liabilities	—		120			—			—			—		—			120
Total liabilities	23		10,908			134			163			696		—			11,924
Total stockholders’ equity (deficit)	3,106		2,194			898			1,087			362		(4,541		)	3,106
Total liabilities and stockholders’ equity (deficit)	$	3,129	$	13,102		$	1,032		$	1,250		$	1,058	$	(4,541	)	$	15,030

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Three Months Ended June 30, 2018

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations			Total
										Foreign			SPV
Revenues:
Equipment rentals	$	—		$	1,507		$	—		$	124		$	—		$	—		$	1,631
Sales of rental equipment	—			143			—			14			—			—			157
Sales of new equipment	—			40			—			4			—			—			44
Contractor supplies sales	—			21			—			3			—			—			24
Service and other revenues	—			29			—			6			—			—			35
Total revenues	—			1,740			—			151			—			—			1,891
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			561			—			59			—			—			620
Depreciation of rental equipment	—			298			—			25			—			—			323
Cost of rental equipment sales	—			85			—			7			—			—			92
Cost of new equipment sales	—			34			—			4			—			—			38
Cost of contractor supplies sales	—			14			—			2			—			—			16
Cost of service and other revenues	—			16			—			4			—			—			20
Total cost of revenues	—			1,008			—			101			—			—			1,109
Gross profit	—			732			—			50			—			—			782
Selling, general and administrative expenses	(35		)	242			—			23			9			—			239
Merger related costs	—			2			—			—			—			—			2
Restructuring charge	—			4			—			—			—			—			4
Non-rental depreciation and amortization	4			58			—			5			—			—			67
Operating income (loss)	31			426			—			22			(9		)	—			470
Interest (income) expense, net	(8		)	115			—			—			5			—			112
Other (income) expense, net	(156		)	172			—			13			(30		)	—			(1		)
Income before provision for income taxes	195			139			—			9			16			—			359
Provision for income taxes	43			40			—			2			4			—			89
Income before equity in net earnings (loss) of subsidiaries	152			99			—			7			12			—			270
Equity in net earnings (loss) of subsidiaries	118			19			7			—			—			(144		)	—
Net income (loss)	270			118			7			7			12			(144		)	270
Other comprehensive (loss) income	(20		)	(20		)	(21		)	(90		)	—			131			(20		)
Comprehensive income (loss)	$	250		$	98		$	(14	)	$	(83	)	$	12		$	(13	)	$	250

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Three Months Ended June 30, 2017

	Parent			URNA		Guarantor Subsidiaries		Non-Guarantor Subsidiaries						Eliminations			Total
								Foreign			SPV
Revenues:
Equipment rentals	$	—		$	1,262	$	—	$	105		$	—		$	—		$	1,367
Sales of rental equipment	—			121		—		12			—			—			133
Sales of new equipment	—			42		—		5			—			—			47
Contractor supplies sales	—			19		—		2			—			—			21
Service and other revenues	—			24		—		5			—			—			29
Total revenues	—			1,468		—		129			—			—			1,597
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			472		—		53			—			—			525
Depreciation of rental equipment	—			245		—		21			—			—			266
Cost of rental equipment sales	—			75		—		6			—			—			81
Cost of new equipment sales	—			35		—		5			—			—			40
Cost of contractor supplies sales	—			13		—		2			—			—			15
Cost of service and other revenues	—			14		—		1			—			—			15
Total cost of revenues	—			854		—		88			—			—			942
Gross profit	—			614		—		41			—			—			655
Selling, general and administrative expenses	19			171		—		21			7			—			218
Merger related costs	—			14		—		—			—			—			14
Restructuring charge	—			19		—		—			—			—			19
Non-rental depreciation and amortization	4			56		—		4			—			—			64
Operating (loss) income	(23		)	354		—		16			(7		)	—			340
Interest (income) expense, net	(3		)	115		—		(1		)	3			(1		)	113
Other (income) expense, net	(131		)	141		—		11			(23		)	—			(2		)
Income before provision for income taxes	111			98		—		6			13			1			229
Provision for income taxes	42			39		—		2			5			—			88
Income before equity in net earnings (loss) of subsidiaries	69			59		—		4			8			1			141
Equity in net earnings (loss) of subsidiaries	72			13		4		—			—			(89		)	—
Net income (loss)	141			72		4		4			8			(88		)	141
Other comprehensive income (loss)	25			25		26		21			—			(72		)	25
Comprehensive income (loss)	$	166		$	97	$	30	$	25		$	8		$	(160	)	$	166

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Six Months EndedJune 30, 2018

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations			Total
										Foreign			SPV
Revenues:
Equipment rentals	$	—		$	2,853		$	—		$	237		$	—		$	—		$	3,090
Sales of rental equipment	—			307			—			31			—			—			338
Sales of new equipment	—			77			—			9			—			—			86
Contractor supplies sales	—			36			—			6			—			—			42
Service and other revenues	—			60			—			9			—			—			69
Total revenues	—			3,333			—			292			—			—			3,625
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			1,096			—			116			—			—			1,212
Depreciation of rental equipment	—			595			—			50			—			—			645
Cost of rental equipment sales	—			183			—			16			—			—			199
Cost of new equipment sales	—			67			—			8			—			—			75
Cost of contractor supplies sales	—			24			—			4			—			—			28
Cost of service and other revenues	—			33			—			5			—			—			38
Total cost of revenues	—			1,998			—			199			—			—			2,197
Gross profit	—			1,335			—			93			—			—			1,428
Selling, general and administrative expenses	5			407			—			42			17			—			471
Merger related costs	—			3			—			—			—			—			3
Restructuring charge	—			6			—			—			—			—			6
Non-rental depreciation and amortization	8			120			—			10			—			—			138
Operating (loss) income	(13		)	799			—			41			(17		)	—			810
Interest (income) expense, net	(15		)	227			1			(1		)	10			(1		)	221
Other (income) expense, net	(297		)	333			—			24			(62		)	—			(2		)
Income (loss) before provision for income taxes	299			239			(1		)	18			35			1			591
Provision for income taxes	60			64			—			5			9			—			138
Income (loss) before equity in net earnings (loss) of subsidiaries	239			175			(1		)	13			26			1			453
Equity in net earnings (loss) of subsidiaries	214			39			13			—			—			(266		)	—
Net income (loss)	453			214			12			13			26			(265		)	453
Other comprehensive (loss) income	(45		)	(45		)	(46		)	(113		)	—			204			(45		)
Comprehensive income (loss)	$	408		$	169		$	(34	)	$	(100	)	$	26		$	(61	)	$	408

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Six Months EndedJune 30, 2017

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign		SPV
Revenues:
Equipment rentals	$	—		$	2,332	$	—		$	201	$	—		$	—		$	2,533
Sales of rental equipment	—			216		—			23		—			—			239
Sales of new equipment	—			77		—			9		—			—			86
Contractor supplies sales	—			35		—			4		—			—			39
Service and other revenues	—			48		—			8		—			—			56
Total revenues	—			2,708		—			245		—			—			2,953
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			895		—			104		—			—			999
Depreciation of rental equipment	—			472		—			42		—			—			514
Cost of rental equipment sales	—			129		—			12		—			—			141
Cost of new equipment sales	—			66		—			8		—			—			74
Cost of contractor supplies sales	—			25		—			3		—			—			28
Cost of service and other revenues	—			25		—			3		—			—			28
Total cost of revenues	—			1,612		—			172		—			—			1,784
Gross profit	—			1,096		—			73		—			—			1,169
Selling, general and administrative expenses	42			316		—			38		15			—			411
Merger related costs	—			16		—			—		—			—			16
Restructuring charge	—			19		—			—		—			—			19
Non-rental depreciation and amortization	8			108		—			10		—			—			126
Operating (loss) income	(50		)	637		—			25		(15		)	—			597
Interest (income) expense, net	(5		)	208		1			—		5			(2		)	207
Other (income) expense, net	(243		)	265		—			23		(45		)	—			—
Income (loss) before provision for income taxes	198			164		(1		)	2		25			2			390
Provision for income taxes	63			67		—			—		10			—			140
Income (loss) before equity in net earnings (loss) of subsidiaries	135			97		(1		)	2		15			2			250
Equity in net earnings (loss) of subsidiaries	115			18		2			—		—			(135		)	—
Net income (loss)	250			115		1			2		15			(133		)	250
Other comprehensive income (loss)	33			33		34			28		—			(95		)	33
Comprehensive income (loss)	$	283		$	148	$	35		$	30	$	15		$	(228	)	$	283

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Six Months EndedJune 30, 2018

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			SPV
Net cash provided by (used in) operating activities	$	12		$	1,714		$	(1	)	$	(66	)	$	(10	)	$	—	$	1,649
Net cash used in investing activities	(12		)	(920		)	—			(73		)	—			—		(1,005		)
Net cash (used in) provided by financing activities	—			(773		)	1			(108		)	10			—		(870		)
Effect of foreign exchange rates	—			—			—			(9		)	—			—		(9		)
Net increase (decrease) in cash and cash equivalents	—			21			—			(256		)	—			—		(235		)
Cash and cash equivalents at beginning of period	—			23			—			329			—			—		352
Cash and cash equivalents at end of period	$	—		$	44		$	—		$	73		$	—		$	—	$	117

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Six Months EndedJune 30, 2017

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			SPV
Net cash provided by (used in) operating activities	$	10		$	1,297		$	(1	)	$	78		$	(55	)	$	—	$	1,329
Net cash used in investing activities	(10		)	(1,624		)	—			(50		)	—			—		(1,684		)
Net cash provided by (used in) financing activities	—			315			1			(1		)	55			—		370
Effect of foreign exchange rates	—			—			—			11			—			—		11
Net (decrease) increase in cash and cash equivalents	—			(12		)	—			38			—			—		26
Cash and cash equivalents at beginning of period	—			21			—			291			—			—		312
Cash and cash equivalents at end of period	$	—		$	9		$	—		$	329		$	—		$	—	$	338