Condensed Consolidating Financial Information of Guarantor Subsidiaries

3 Months Ended

Mar. 31, 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 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 March 31, 2017, the amount available for distribution under the most restrictive of these covenants was $415. The Company’s total available capacity for making share repurchases and dividend payments includes the intercompany receivable balance of Parent. As of March 31, 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 $810.

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

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2017

	Parent		URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries					Eliminations			Total
									Foreign			SPV
ASSETS
Cash and cash equivalents	$	—	$	14		$	—		$	323		$	—	$	—		$	337
Accounts receivable, net	—		38			—			87			729		—			854
Intercompany receivable (payable)	395		(188		)	(196		)	(117		)	—		106			—
Inventory	—		68			—			7			—		—			75
Prepaid expenses and other assets	6		42			—			6			—		—			54
Total current assets	401		(26		)	(196		)	306			729		106			1,320
Rental equipment, net	—		5,631			—			476			—		—			6,107
Property and equipment, net	38		319			30			39			—		—			426
Investments in subsidiaries	1,342		978			983			—			—		(3,303		)	—
Goodwill	—		3,013			—			249			—		—			3,262
Other intangible assets, net	—		648			—			53			—		—			701
Other long-term assets	—		6			—			—			—		—			6
Total assets	$	1,781	$	10,569		$	817		$	1,123		$	729	$	(3,197	)	$	11,822
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Short-term debt and current maturities of long-term debt	$	1	$	24		$	—		$	2		$	550	$	—		$	577
Accounts payable	—		344			—			38			—		—			382
Accrued expenses and other liabilities	—		321			11			25			1		—			358
Total current liabilities	1		689			11			65			551		—			1,317
Long-term debt	2		6,655			111			4			—		—			6,772
Deferred taxes	25		1,815			—			71			—		—			1,911
Other long-term liabilities	—		68			1			—			—		—			69
Total liabilities	28		9,227			123			140			551		—			10,069
Total stockholders’ equity (deficit)	1,753		1,342			694			983			178		(3,197		)	1,753
Total liabilities and stockholders’ equity (deficit)	$	1,781	$	10,569		$	817		$	1,123		$	729	$	(3,197	)	$	11,822

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 EndedMarch 31, 2017

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations			Total
									Foreign			SPV
Revenues:
Equipment rentals	$	—		$	1,070	$	—		$	96		$	—		$	—		$	1,166
Sales of rental equipment	—			95		—			11			—			—			106
Sales of new equipment	—			35		—			4			—			—			39
Contractor supplies sales	—			16		—			2			—			—			18
Service and other revenues	—			24		—			3			—			—			27
Total revenues	—			1,240		—			116			—			—			1,356
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			423		—			51			—			—			474
Depreciation of rental equipment	—			227		—			21			—			—			248
Cost of rental equipment sales	—			54		—			6			—			—			60
Cost of new equipment sales	—			31		—			3			—			—			34
Cost of contractor supplies sales	—			12		—			1			—			—			13
Cost of service and other revenues	—			11		—			2			—			—			13
Total cost of revenues	—			758		—			84			—			—			842
Gross profit	—			482		—			32			—			—			514
Selling, general and administrative expenses	23			145		—			17			8			—			193
Merger related costs	—			2		—			—			—			—			2
Non-rental depreciation and amortization	4			52		—			6			—			—			62
Operating (loss) income	(27		)	283		—			9			(8		)	—			257
Interest (income) expense, net	(2		)	93		1			1			2			(1		)	94
Other (income) expense, net	(112		)	124		—			12			(22		)	—			2
Income (loss) before provision (benefit) for income taxes	87			66		(1		)	(4		)	12			1			161
Provision (benefit) for income taxes	21			28		—			(2		)	5			—			52
Income (loss) before equity in net earnings (loss) of subsidiaries	66			38		(1		)	(2		)	7			1			109
Equity in net earnings (loss) of subsidiaries	43			5		(2		)	—			—			(46		)	—
Net income (loss)	109			43		(3		)	(2		)	7			(45		)	109
Other comprehensive income (loss)	8			8		8			7			—			(23		)	8
Comprehensive income (loss)	$	117		$	51	$	5		$	5		$	7		$	(68	)	$	117

CONDENSED CONSOLIDATING STATEMENT OF INCOME AND COMPREHENSIVE INCOME

For the Three Months EndedMarch 31, 2016

	Parent			URNA		Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations			Total
									Foreign			SPV
Revenues:
Equipment rentals	$	—		$	1,024	$	—		$	93		$	—		$	—		$	1,117
Sales of rental equipment	—			104		—			11			—			—			115
Sales of new equipment	—			27		—			3			—			—			30
Contractor supplies sales	—			17		—			2			—			—			19
Service and other revenues	—			25		—			4			—			—			29
Total revenues	—			1,197		—			113			—			—			1,310
Cost of revenues:
Cost of equipment rentals, excluding depreciation	—			404		—			45			—			—			449
Depreciation of rental equipment	—			221		—			22			—			—			243
Cost of rental equipment sales	—			62		—			6			—			—			68
Cost of new equipment sales	—			23		—			2			—			—			25
Cost of contractor supplies sales	—			12		—			1			—			—			13
Cost of service and other revenues	—			9		—			3			—			—			12
Total cost of revenues	—			731		—			79			—			—			810
Gross profit	—			466		—			34			—			—			500
Selling, general and administrative expenses	6			144		—			19			8			—			177
Restructuring charge	—			2		—			—			—			—			2
Non-rental depreciation and amortization	4			57		—			6			—			—			67
Operating (loss) income	(10		)	263		—			9			(8		)	—			254
Interest (income) expense, net	(2		)	106		1			1			2			(1		)	107
Other (income) expense, net	(106		)	122		—			9			(25		)	—			—
Income (loss) before provision for income taxes	98			35		(1		)	(1		)	15			1			147
Provision (benefit) for income taxes	37			13		—			(1		)	6			—			55
Income (loss) before equity in net earnings (loss) of subsidiaries	61			22		(1		)	—			9			1			92
Equity in net earnings (loss) of subsidiaries	31			9		—			—			—			(40		)	—
Net income (loss)	92			31		(1		)	—			9			(39		)	92
Other comprehensive income (loss)	63			63		62			50			—			(175		)	63
Comprehensive income (loss)	$	155		$	94	$	61		$	50		$	9		$	(214	)	$	155

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Three Months EndedMarch 31, 2017

	Parent			URNA			Guarantor Subsidiaries			Non-Guarantor Subsidiaries						Eliminations		Total
										Foreign			SPV
Net cash provided by (used in) operating activities	$	4		$	516		$	(1	)	$	39		$	65		$	—	$	623
Net cash used in investing activities	(4		)	(121		)	—			(9		)	—			—		(134		)
Net cash (used in) provided by financing activities	—			(402		)	1			—			(65		)	—		(466		)
Effect of foreign exchange rates	—			—			—			2			—			—		2
Net (decrease) increase in cash and cash equivalents	—			(7		)	—			32			—			—		25
Cash and cash equivalents at beginning of period	—			21			—			291			—			—		312
Cash and cash equivalents at end of period	$	—		$	14		$	—		$	323		$	—		$	—	$	337

CONDENSED CONSOLIDATING CASH FLOW INFORMATION

For the Three Months EndedMarch 31, 2016

	Parent		URNA			Guarantor Subsidiaries		Non-Guarantor Subsidiaries					Eliminations		Total
								Foreign		SPV
Net cash provided by operating activities	$	—	$	469		$	—	$	41	$	94		$	—	$	604
Net cash used in investing activities	—		(17		)	—		—		—			—		(17		)
Net cash used in financing activities	—		(466		)	—		—		(94		)	—		(560		)
Effect of foreign exchange rates	—		—			—		13		—			—		13
Net (decrease) increase in cash and cash equivalents	—		(14		)	—		54		—			—		40
Cash and cash equivalents at beginning of period	—		18			—		161		—			—		179
Cash and cash equivalents at end of period	$	—	$	4		$	—	$	215	$	—		$	—	$	219