Condensed Consolidating Financial Information of Guarantor Subsidiaries

9 Months Ended

Sep. 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”) and United Rentals International Management LLC, which is an immaterial subsidiary, 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, the SPV or United Rentals International Management LLC (together, the “non-guarantor subsidiaries”). The SPV and United Rentals International Management LLC are presented together in the “Domestic” columns in the tables below. 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 September 30, 2018, the amount available for distribution under the most restrictive of these covenants was $709. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of September 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 $2.034 billion.

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

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2018

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			Domestic
ASSETS
Cash and cash equivalents	$	—	$	17		$	—		$	48		$	—	$	—		$	65
Accounts receivable, net	—		—			—			141			1,297		—			1,438
Intercompany receivable (payable)	1,325		(1,200		)	(96		)	(29		)	—		—			—
Inventory	—		94			—			10			—		—			104
Prepaid expenses and other assets	—		81			—			4			—		—			85
Total current assets	1,325		(1,008		)	(96		)	174			1,297		—			1,692
Rental equipment, net	—		8,243			—			667			—		—			8,910
Property and equipment, net	51		394			40			44			—		—			529
Investments in subsidiaries	1,973		1,534			966			—			22		(4,495		)	—
Goodwill	—		3,902			—			411			—		—			4,313
Other intangible assets, net	—		812			—			83			—		—			895
Other long-term assets	7		8			—			—			—		—			15
Total assets	$	3,356	$	13,885		$	910		$	1,379		$	1,319	$	(4,495	)	$	16,354
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	28		$	—		$	2		$	865	$	—		$	896
Accounts payable	—		624			—			64			—		—			688
Accrued expenses and other liabilities	—		449			14			38			2		—			503
Total current liabilities	1		1,101			14			104			867		—			2,087
Long-term debt	—		9,170			9			3			—		—			9,182
Deferred taxes	21		1,518			—			89			—		—			1,628
Other long-term liabilities	—		123			—			—			—		—			123
Total liabilities	22		11,912			23			196			867		—			13,020
Total stockholders’ equity (deficit)	3,334		1,973			887			1,183			452		(4,495		)	3,334
Total liabilities and stockholders’ equity (deficit)	$	3,356	$	13,885		$	910		$	1,379		$	1,319	$	(4,495	)	$	16,354

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2017

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			Domestic
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 September 30, 2018

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign		Domestic
Revenues:
Equipment rentals	$	—		$	1,715	$	—		$	146	$	—		$	—		$	1,861
Sales of rental equipment	—			128		—			12		—			—			140
Sales of new equipment	—			46		—			8		—			—			54
Contractor supplies sales	—			22		—			2		—			—			24
Service and other revenues	—			32		—			5		—			—			37
Total revenues	—			1,943		—			173		—			—			2,116
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			614		—			57		—			—			671
Depreciation of rental equipment	—			316		—			27		—			—			343
Cost of rental equipment sales	—			76		—			7		—			—			83
Cost of new equipment sales	—			40		—			6		—			—			46
Cost of contractor supplies sales	—			14		—			1		—			—			15
Cost of service and other revenues	—			16		—			4		—			—			20
Total cost of revenues	—			1,076		—			102		—			—			1,178
Gross profit	—			867		—			71		—			—			938
Selling, general and administrative expenses	28			197		—			24		16			—			265
Merger related costs	—			11		—			—		—			—			11
Restructuring charge	—			8		—			1		—			—			9
Non-rental depreciation and amortization	3			65		—			7		—			—			75
Operating (loss) income	(31		)	586		—			39		(16		)	—			578
Interest (income) expense, net	(11		)	122		(1		)	1		7			—			118
Other (income) expense, net	(172		)	196		—			13		(37		)	—			—
Income before provision for income taxes	152			268		1			25		14			—			460
Provision for income taxes	45			71		—			8		3			—			127
Income before equity in net earnings (loss) of subsidiaries	107			197		1			17		11			—			333
Equity in net earnings (loss) of subsidiaries	226			29		17			—		—			(272		)	—
Net income (loss)	333			226		18			17		11			(272		)	333
Other comprehensive income (loss)	18			18		18			18		—			(54		)	18
Comprehensive income (loss)	$	351		$	244	$	36		$	35	$	11		$	(326	)	$	351

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		Domestic
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 Nine Months EndedSeptember 30, 2018

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations			Total
										Foreign			Domestic
Revenues:
Equipment rentals	$	—		$	4,568		$	—		$	383		$	—		$	—		$	4,951
Sales of rental equipment	—			435			—			43			—			—			478
Sales of new equipment	—			123			—			17			—			—			140
Contractor supplies sales	—			58			—			8			—			—			66
Service and other revenues	—			92			—			14			—			—			106
Total revenues	—			5,276			—			465			—			—			5,741
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			1,710			—			173			—			—			1,883
Depreciation of rental equipment	—			911			—			77			—			—			988
Cost of rental equipment sales	—			259			—			23			—			—			282
Cost of new equipment sales	—			107			—			14			—			—			121
Cost of contractor supplies sales	—			38			—			5			—			—			43
Cost of service and other revenues	—			49			—			9			—			—			58
Total cost of revenues	—			3,074			—			301			—			—			3,375
Gross profit	—			2,202			—			164			—			—			2,366
Selling, general and administrative expenses	33			604			—			66			33			—			736
Merger related costs	—			14			—			—			—			—			14
Restructuring charge	—			14			—			1			—			—			15
Non-rental depreciation and amortization	11			185			—			17			—			—			213
Operating (loss) income	(44		)	1,385			—			80			(33		)	—			1,388
Interest (income) expense, net	(26		)	349			—			—			17			(1		)	339
Other (income) expense, net	(469		)	529			—			37			(99		)	—			(2		)
Income before provision for income taxes	451			507			—			43			49			1			1,051
Provision for income taxes	105			135			—			13			12			—			265
Income before equity in net earnings (loss) of subsidiaries	346			372			—			30			37			1			786
Equity in net earnings (loss) of subsidiaries	440			68			30			—			—			(538		)	—
Net income (loss)	786			440			30			30			37			(537		)	786
Other comprehensive (loss) income	(27		)	(27		)	(28		)	(95		)	—			150			(27		)
Comprehensive income (loss)	$	759		$	413		$	2		$	(65	)	$	37		$	(387	)	$	759

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		Domestic
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 CASH FLOW INFORMATION

For the Nine Months EndedSeptember 30, 2018

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			Domestic
Net cash provided by (used in) operating activities	$	22		$	2,354		$	(1	)	$	(50	)	$	(202	)	$	—	$	2,123
Net cash used in investing activities	(22		)	(2,259		)	—			(112		)	—			—		(2,393		)
Net cash (used in) provided by financing activities	—			(101		)	1			(109		)	202			—		(7		)
Effect of foreign exchange rates	—			—			—			(10		)	—			—		(10		)
Net decrease in cash and cash equivalents	—			(6		)	—			(281		)	—			—		(287		)
Cash and cash equivalents at beginning of period	—			23			—			329			—			—		352
Cash and cash equivalents at end of period	$	—		$	17		$	—		$	48		$	—		$	—	$	65

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Nine Months EndedSeptember 30, 2017

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			Domestic
Net cash provided by (used in) operating activities	$	15		$	1,839		$	(2	)	$	83		$	(179	)	$	—	$	1,756
Net cash used in investing activities	(15		)	(2,135		)	—			(92		)	—			—		(2,242		)
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