x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
Delaware
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06-1522496
86-0933835
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(States of Incorporation)
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(I.R.S. Employer Identification Nos.)
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100 First Stamford Place, Suite 700
Stamford, Connecticut |
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06902
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(Address of Principal Executive Offices)
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(Zip Code)
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Large Accelerated Filer
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x
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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Smaller Reporting Company
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o
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Emerging Growth Company
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o
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Page
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PART I
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Item 1
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Item 2
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Item 3
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Item 4
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PART II
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Item 1
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Item 1A
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Item 2
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Item 6
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•
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the possibility that companies that we have acquired or may acquire, including NES Rentals Holdings II, Inc. (“NES”), Neff Corporation ("Neff"), BakerCorp International Holdings, Inc. (“BakerCorp”) and Vander Holding Corporation and its subsidiaries ("BlueLine"), could have undiscovered liabilities or involve other unexpected costs, may strain our management capabilities or may be difficult to integrate;
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•
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the possibility that the proposed BlueLine acquisition will not close;
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•
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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;
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•
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our significant indebtedness (which totaled $
10.1 billion
at
September 30, 2018
) 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;
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•
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inability to refinance our indebtedness on terms that are favorable to us, or at all;
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•
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incurrence of additional debt, which could exacerbate the risks associated with our current level of indebtedness;
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•
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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;
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•
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restrictive covenants and amount of borrowings permitted in our debt instruments, which can limit our financial and operational flexibility;
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•
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overcapacity of fleet in the equipment rental industry;
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•
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inability to benefit from government spending, including spending associated with infrastructure projects;
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•
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fluctuations in the price of our common stock and inability to complete stock repurchases in the time frame and/or on the terms anticipated;
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•
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rates we charge and time utilization we achieve being less than anticipated;
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•
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inability to manage credit risk adequately or to collect on contracts with a large number of customers;
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•
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inability to access the capital that our businesses or growth plans may require;
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•
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incurrence of impairment charges;
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•
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trends in oil and natural gas could adversely affect the demand for our services and products;
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•
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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;
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•
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increases in our loss reserves to address business operations or other claims and any claims that exceed our established levels of reserves;
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•
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incurrence of additional expenses (including indemnification obligations) and other costs in connection with litigation, regulatory and investigatory matters;
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•
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the outcome or other potential consequences of regulatory matters and commercial litigation;
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•
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shortfalls in our insurance coverage;
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•
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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;
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•
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turnover in our management team and inability to attract and retain key personnel;
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•
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costs we incur being more than anticipated, and the inability to realize expected savings in the amounts or time frames planned;
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•
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dependence on key suppliers to obtain equipment and other supplies for our business on acceptable terms;
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•
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inability to sell our new or used fleet in the amounts, or at the prices, we expect;
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•
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competition from existing and new competitors;
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•
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risks related to security breaches, cybersecurity attacks and other significant disruptions in our information technology systems;
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•
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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;
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•
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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;
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•
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increases in our maintenance and replacement costs and/or decreases in the residual value of our equipment; and
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•
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the effect of changes in tax law, such as the effect of the Tax Cuts and Jobs Act that was enacted on December 22, 2017.
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Item 1.
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Financial Statements
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September 30, 2018
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December 31, 2017
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||||
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(unaudited)
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ASSETS
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||||
Cash and cash equivalents
|
$
|
65
|
|
|
$
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352
|
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Accounts receivable, net of allowance for doubtful accounts of $77 at September 30, 2018 and $68 at December 31, 2017
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1,438
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1,233
|
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Inventory
|
104
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|
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75
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Prepaid expenses and other assets
|
85
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112
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Total current assets
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1,692
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1,772
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Rental equipment, net
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8,910
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7,824
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Property and equipment, net
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529
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467
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Goodwill
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4,313
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4,082
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Other intangible assets, net
|
895
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875
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Other long-term assets
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15
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10
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Total assets
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$
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16,354
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$
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15,030
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Short-term debt and current maturities of long-term debt
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$
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896
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$
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723
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Accounts payable
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688
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409
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Accrued expenses and other liabilities
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503
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536
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Total current liabilities
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2,087
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1,668
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Long-term debt
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9,182
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8,717
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Deferred taxes
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1,628
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1,419
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Other long-term liabilities
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123
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120
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Total liabilities
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13,020
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11,924
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Common stock—$0.01 par value, 500,000,000 shares authorized, 112,874,448 and 81,537,040 shares issued and outstanding, respectively, at September 30, 2018 and 112,394,395 and 84,463,662 shares issued and outstanding, respectively, at December 31, 2017
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1
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1
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|
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Additional paid-in capital
|
2,380
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2,356
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Retained earnings
|
3,791
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3,005
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Treasury stock at cost—31,337,408 and 27,930,733 shares at September 30, 2018 and December 31, 2017, respectively
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(2,660
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)
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(2,105
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)
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Accumulated other comprehensive loss
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(178
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)
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(151
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)
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Total stockholders’ equity
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3,334
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3,106
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Total liabilities and stockholders’ equity
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$
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16,354
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$
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15,030
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
Revenues:
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||||||||
Equipment rentals
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$
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1,861
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$
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1,536
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$
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4,951
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$
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4,069
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Sales of rental equipment
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140
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139
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478
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378
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Sales of new equipment
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54
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40
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140
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126
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Contractor supplies sales
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24
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21
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66
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60
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Service and other revenues
|
37
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30
|
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|
106
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|
86
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|
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Total revenues
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2,116
|
|
|
1,766
|
|
|
5,741
|
|
|
4,719
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Cost of revenues:
|
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||||||||
Cost of equipment rentals, excluding depreciation
|
671
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|
|
557
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1,883
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|
|
1,556
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Depreciation of rental equipment
|
343
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|
|
290
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|
|
988
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|
|
804
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|
||||
Cost of rental equipment sales
|
83
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|
|
84
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|
|
282
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|
|
225
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|
||||
Cost of new equipment sales
|
46
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|
|
34
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|
|
121
|
|
|
108
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|
||||
Cost of contractor supplies sales
|
15
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|
|
14
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|
|
43
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|
|
42
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|
||||
Cost of service and other revenues
|
20
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|
|
14
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|
|
58
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|
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42
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|
||||
Total cost of revenues
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1,178
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993
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|
3,375
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2,777
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Gross profit
|
938
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|
773
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|
2,366
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|
1,942
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Selling, general and administrative expenses
|
265
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|
|
237
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|
|
736
|
|
|
648
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Merger related costs
|
11
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|
|
16
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|
|
14
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|
|
32
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|
||||
Restructuring charge
|
9
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|
|
9
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|
|
15
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|
|
28
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|
||||
Non-rental depreciation and amortization
|
75
|
|
|
63
|
|
|
213
|
|
|
189
|
|
||||
Operating income
|
578
|
|
|
448
|
|
|
1,388
|
|
|
1,045
|
|
||||
Interest expense, net
|
118
|
|
|
131
|
|
|
339
|
|
|
338
|
|
||||
Other income, net
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
|
(5
|
)
|
||||
Income before provision for income taxes
|
460
|
|
|
322
|
|
|
1,051
|
|
|
712
|
|
||||
Provision for income taxes
|
127
|
|
|
123
|
|
|
265
|
|
|
263
|
|
||||
Net income
|
$
|
333
|
|
|
$
|
199
|
|
|
$
|
786
|
|
|
$
|
449
|
|
Basic earnings per share
|
$
|
4.05
|
|
|
$
|
2.36
|
|
|
$
|
9.44
|
|
|
$
|
5.31
|
|
Diluted earnings per share
|
$
|
4.01
|
|
|
$
|
2.33
|
|
|
$
|
9.34
|
|
|
$
|
5.26
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
333
|
|
|
$
|
199
|
|
|
$
|
786
|
|
|
$
|
449
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
18
|
|
|
41
|
|
|
(28
|
)
|
|
75
|
|
||||
Fixed price diesel swaps
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
Other comprehensive (loss) income
|
18
|
|
|
42
|
|
|
(27
|
)
|
|
75
|
|
||||
Comprehensive income (1)
|
$
|
351
|
|
|
$
|
241
|
|
|
$
|
759
|
|
|
$
|
524
|
|
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
|
|
||||||||||||||||
|
Number of
Shares (1)
|
|
Amount
|
|
Additional Paid-in
Capital
|
|
Retained Earnings
|
|
Number of
Shares
|
|
Amount
|
|
Accumulated Other Comprehensive Loss (2)
|
||||||||||||
Balance at December 31, 2017
|
84
|
|
|
$
|
1
|
|
|
$
|
2,356
|
|
|
$
|
3,005
|
|
|
28
|
|
|
$
|
(2,105
|
)
|
|
$
|
(151
|
)
|
Net income
|
|
|
|
|
|
|
786
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|||||||||||
Fixed price diesel swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||
Stock compensation expense, net
|
1
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
||||||||||
Exercise of common stock options
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares repurchased and retired
|
|
|
|
|
(51
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
Repurchase of common stock
|
(3
|
)
|
|
|
|
|
|
|
|
3
|
|
|
(555
|
)
|
|
|
|||||||||
Balance at September 30, 2018
|
82
|
|
|
$
|
1
|
|
|
$
|
2,380
|
|
|
$
|
3,791
|
|
|
31
|
|
|
$
|
(2,660
|
)
|
|
$
|
(178
|
)
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
786
|
|
|
$
|
449
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,201
|
|
|
993
|
|
||
Amortization of deferred financing costs and original issue discounts
|
9
|
|
|
6
|
|
||
Gain on sales of rental equipment
|
(196
|
)
|
|
(153
|
)
|
||
Gain on sales of non-rental equipment
|
(4
|
)
|
|
(4
|
)
|
||
Gain on insurance proceeds from damaged equipment
|
(18
|
)
|
|
(10
|
)
|
||
Stock compensation expense, net
|
73
|
|
|
64
|
|
||
Merger related costs
|
14
|
|
|
32
|
|
||
Restructuring charge
|
15
|
|
|
28
|
|
||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
—
|
|
|
43
|
|
||
Increase in deferred taxes
|
190
|
|
|
97
|
|
||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
||||
Increase in accounts receivable
|
(131
|
)
|
|
(172
|
)
|
||
Increase in inventory
|
(23
|
)
|
|
(9
|
)
|
||
Decrease (increase) in prepaid expenses and other assets
|
31
|
|
|
(1
|
)
|
||
Increase in accounts payable
|
238
|
|
|
350
|
|
||
(Decrease) increase in accrued expenses and other liabilities
|
(62
|
)
|
|
43
|
|
||
Net cash provided by operating activities
|
2,123
|
|
|
1,756
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Purchases of rental equipment
|
(1,962
|
)
|
|
(1,485
|
)
|
||
Purchases of non-rental equipment
|
(134
|
)
|
|
(87
|
)
|
||
Proceeds from sales of rental equipment
|
478
|
|
|
378
|
|
||
Proceeds from sales of non-rental equipment
|
13
|
|
|
10
|
|
||
Insurance proceeds from damaged equipment
|
18
|
|
|
10
|
|
||
Purchases of other companies, net of cash acquired
|
(805
|
)
|
|
(1,063
|
)
|
||
Purchases of investments
|
(1
|
)
|
|
(5
|
)
|
||
Net cash used in investing activities
|
(2,393
|
)
|
|
(2,242
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Proceeds from debt
|
7,062
|
|
|
8,702
|
|
||
Payments of debt
|
(6,464
|
)
|
|
(8,156
|
)
|
||
Proceeds from the exercise of common stock options
|
2
|
|
|
1
|
|
||
Common stock repurchased
|
(606
|
)
|
|
(26
|
)
|
||
Payments of financing costs
|
(1
|
)
|
|
(44
|
)
|
||
Net cash (used in) provided by financing activities
|
(7
|
)
|
|
477
|
|
||
Effect of foreign exchange rates
|
(10
|
)
|
|
21
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(287
|
)
|
|
12
|
|
||
Cash and cash equivalents at beginning of period
|
352
|
|
|
312
|
|
||
Cash and cash equivalents at end of period
|
$
|
65
|
|
|
$
|
324
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
50
|
|
|
$
|
114
|
|
Cash paid for interest
|
379
|
|
|
305
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
||||||||||||
|
Topic 840
|
|
Topic 606
|
|
Total
|
|
Topic 840
|
|
Topic 605
|
|
Total
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owned equipment rentals
|
$
|
1,589
|
|
|
$
|
—
|
|
|
$
|
1,589
|
|
|
$
|
1,320
|
|
|
$
|
—
|
|
|
$
|
1,320
|
|
Re-rent revenue
|
41
|
|
|
—
|
|
|
41
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||
Ancillary and other rental revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Delivery and pick-up
|
—
|
|
|
132
|
|
|
132
|
|
|
—
|
|
|
107
|
|
|
107
|
|
||||||
Other
|
78
|
|
|
21
|
|
|
99
|
|
|
61
|
|
|
16
|
|
|
77
|
|
||||||
Total ancillary and other rental revenues
|
78
|
|
|
153
|
|
|
231
|
|
|
61
|
|
|
123
|
|
|
184
|
|
||||||
Total equipment rentals
|
1,708
|
|
|
153
|
|
|
1,861
|
|
|
1,413
|
|
|
123
|
|
|
1,536
|
|
||||||
Sales of rental equipment
|
—
|
|
|
140
|
|
|
140
|
|
|
—
|
|
|
139
|
|
|
139
|
|
||||||
Sales of new equipment
|
—
|
|
|
54
|
|
|
54
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||||
Contractor supplies sales
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
21
|
|
|
21
|
|
||||||
Service and other revenues
|
—
|
|
|
37
|
|
|
37
|
|
|
—
|
|
|
30
|
|
|
30
|
|
||||||
Total revenues
|
$
|
1,708
|
|
|
$
|
408
|
|
|
$
|
2,116
|
|
|
$
|
1,413
|
|
|
$
|
353
|
|
|
$
|
1,766
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
||||||||||||
|
Topic 840
|
|
Topic 606
|
|
Total
|
|
Topic 840
|
|
Topic 605
|
|
Total
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owned equipment rentals
|
$
|
4,260
|
|
|
$
|
—
|
|
|
$
|
4,260
|
|
|
$
|
3,508
|
|
|
$
|
—
|
|
|
$
|
3,508
|
|
Re-rent revenue
|
95
|
|
|
—
|
|
|
95
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||||
Ancillary and other rental revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Delivery and pick-up
|
—
|
|
|
336
|
|
|
336
|
|
|
—
|
|
|
279
|
|
|
279
|
|
||||||
Other
|
198
|
|
|
62
|
|
|
260
|
|
|
160
|
|
|
44
|
|
|
204
|
|
||||||
Total ancillary and other rental revenues
|
198
|
|
|
398
|
|
|
596
|
|
|
160
|
|
|
323
|
|
|
483
|
|
||||||
Total equipment rentals
|
4,553
|
|
|
398
|
|
|
4,951
|
|
|
3,746
|
|
|
323
|
|
|
4,069
|
|
||||||
Sales of rental equipment
|
—
|
|
|
478
|
|
|
478
|
|
|
—
|
|
|
378
|
|
|
378
|
|
||||||
Sales of new equipment
|
—
|
|
|
140
|
|
|
140
|
|
|
—
|
|
|
126
|
|
|
126
|
|
||||||
Contractor supplies sales
|
—
|
|
|
66
|
|
|
66
|
|
|
—
|
|
|
60
|
|
|
60
|
|
||||||
Service and other revenues
|
—
|
|
|
106
|
|
|
106
|
|
|
—
|
|
|
86
|
|
|
86
|
|
||||||
Total revenues
|
$
|
4,553
|
|
|
$
|
1,188
|
|
|
$
|
5,741
|
|
|
$
|
3,746
|
|
|
$
|
973
|
|
|
$
|
4,719
|
|
•
|
The transaction price is generally fixed and stated on our contracts;
|
•
|
As noted above, our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation;
|
•
|
Our revenues do not include material amounts of variable consideration; and
|
•
|
Most of our revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer.
|
Accounts receivable, net of allowance for doubtful accounts (1)
|
$
|
49
|
|
Inventory
|
4
|
|
|
Rental equipment
|
571
|
|
|
Property and equipment
|
48
|
|
|
Intangibles (2)
|
139
|
|
|
Other assets
|
7
|
|
|
Total identifiable assets acquired
|
818
|
|
|
Short-term debt and current maturities of long-term debt (3)
|
(3
|
)
|
|
Current liabilities
|
(33
|
)
|
|
Deferred taxes
|
(15
|
)
|
|
Long-term debt (3)
|
(11
|
)
|
|
Other long-term liabilities
|
(5
|
)
|
|
Total liabilities assumed
|
(67
|
)
|
|
Net identifiable assets acquired
|
751
|
|
|
Goodwill (4)
|
209
|
|
|
Net assets acquired
|
$
|
960
|
|
|
Fair value
|
Life (years)
|
||
Customer relationships
|
$
|
138
|
|
10
|
Non-compete agreements
|
1
|
|
1
|
|
Total
|
$
|
139
|
|
|
Accounts receivable, net of allowance for doubtful accounts (1)
|
$
|
72
|
|
Inventory
|
5
|
|
|
Rental equipment
|
550
|
|
|
Property and equipment
|
45
|
|
|
Intangibles (customer relationships) (2)
|
153
|
|
|
Other assets
|
5
|
|
|
Total identifiable assets acquired
|
830
|
|
|
Current liabilities
|
(62
|
)
|
|
Deferred taxes
|
(36
|
)
|
|
Other long-term liabilities
|
(3
|
)
|
|
Total liabilities assumed
|
(101
|
)
|
|
Net identifiable assets acquired
|
729
|
|
|
Goodwill (3)
|
587
|
|
|
Net assets acquired
|
$
|
1,316
|
|
Accounts receivable, net of allowance for doubtful accounts (1)
|
$
|
73
|
|
Inventory
|
5
|
|
|
Rental equipment
|
352
|
|
|
Property and equipment
|
27
|
|
|
Intangibles (2)
|
149
|
|
|
Other assets
|
5
|
|
|
Total identifiable assets acquired
|
611
|
|
|
Current liabilities
|
(61
|
)
|
|
Deferred taxes
|
(20
|
)
|
|
Total liabilities assumed
|
(81
|
)
|
|
Net identifiable assets acquired
|
530
|
|
|
Goodwill (3)
|
194
|
|
|
Net assets acquired
|
$
|
724
|
|
|
Fair value
|
Life (years)
|
||
Customer relationships
|
$
|
144
|
|
8
|
Trade names and associated trademarks
|
5
|
|
5
|
|
Total
|
$
|
149
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||||||||||||||||||||||||||
|
September 30, 2017
|
|
September 30, 2017
|
|
||||||||||||||||||||||||||||||||||||
|
United Rentals
|
|
NES
|
|
Neff
|
|
BakerCorp
|
|
Total
|
|
United Rentals
|
|
NES
|
|
Neff
|
|
BakerCorp
|
|
Total
|
|
||||||||||||||||||||
Historic/pro forma revenues
|
$
|
1,766
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
70
|
|
|
$
|
1,947
|
|
|
$
|
4,719
|
|
|
$
|
81
|
|
|
$
|
312
|
|
|
$
|
199
|
|
|
$
|
5,311
|
|
|
Historic/combined pretax income (loss)
|
322
|
|
|
—
|
|
|
16
|
|
|
(6
|
)
|
|
332
|
|
|
712
|
|
|
(12
|
)
|
|
38
|
|
|
(62
|
)
|
|
676
|
|
|
||||||||||
Pro forma adjustments to pretax income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Impact of fair value mark-ups/useful life changes on depreciation (1)
|
|
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
|
|
(9
|
)
|
|
(8
|
)
|
|
(10
|
)
|
|
(27
|
)
|
|
||||||||||||
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
||||||||||||
Intangible asset amortization (3)
|
|
|
—
|
|
|
(7
|
)
|
|
(8
|
)
|
|
(15
|
)
|
|
|
|
(6
|
)
|
|
(21
|
)
|
|
(25
|
)
|
|
(52
|
)
|
|
||||||||||||
Goodwill impairment (4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
|
||||||||||||
Interest expense (5)
|
|
|
—
|
|
|
(17
|
)
|
|
(5
|
)
|
|
(22
|
)
|
|
|
|
(9
|
)
|
|
(51
|
)
|
|
(14
|
)
|
|
(74
|
)
|
|
||||||||||||
Elimination of historic interest (6)
|
|
|
—
|
|
|
11
|
|
|
10
|
|
|
21
|
|
|
|
|
12
|
|
|
34
|
|
|
30
|
|
|
76
|
|
|
||||||||||||
Elimination of merger related costs (7)
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
16
|
|
|
|
|
17
|
|
|
15
|
|
|
—
|
|
|
32
|
|
|
||||||||||||
Restructuring charges (8)
|
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
1
|
|
|
|
|
(5
|
)
|
|
(19
|
)
|
|
(6
|
)
|
|
(30
|
)
|
|
||||||||||||
Pro forma pretax income
|
|
|
|
|
|
|
|
|
$
|
326
|
|
|
|
|
|
|
|
|
|
|
$
|
631
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||||||||||
|
September 30, 2018
|
|
September 30, 2018
|
|
||||||||||||||||||||
|
United Rentals
|
|
BakerCorp
|
|
Total
|
|
United Rentals
|
|
BakerCorp
|
|
Total
|
|
||||||||||||
Historic/pro forma revenues
|
$
|
2,116
|
|
|
$
|
28
|
|
|
$
|
2,144
|
|
|
$
|
5,741
|
|
|
$
|
184
|
|
|
$
|
5,925
|
|
|
Historic/combined pretax income (loss)
|
460
|
|
|
(63
|
)
|
|
397
|
|
|
1,051
|
|
|
(84
|
)
|
|
967
|
|
|
||||||
Pro forma adjustments to pretax income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impact of fair value mark-ups/useful life changes on depreciation (1)
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
(8
|
)
|
|
(8
|
)
|
|
||||||||
Intangible asset amortization (3)
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
(16
|
)
|
|
(16
|
)
|
|
||||||||
Interest expense (5)
|
|
|
(2
|
)
|
|
(2
|
)
|
|
|
|
(14
|
)
|
|
(14
|
)
|
|
||||||||
Elimination of historic interest (6)
|
|
|
9
|
|
|
9
|
|
|
|
|
30
|
|
|
30
|
|
|
||||||||
Elimination of merger related costs (7)
|
|
|
65
|
|
|
65
|
|
|
|
|
66
|
|
|
66
|
|
|
||||||||
Restructuring charges (8)
|
|
|
6
|
|
|
6
|
|
|
|
|
6
|
|
|
6
|
|
|
||||||||
Pro forma pretax income
|
|
|
|
|
$
|
473
|
|
|
|
|
|
|
$
|
1,031
|
|
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,444
|
|
|
$
|
417
|
|
|
$
|
1,861
|
|
Sales of rental equipment
|
130
|
|
|
10
|
|
|
140
|
|
|||
Sales of new equipment
|
50
|
|
|
4
|
|
|
54
|
|
|||
Contractor supplies sales
|
17
|
|
|
7
|
|
|
24
|
|
|||
Service and other revenues
|
33
|
|
|
4
|
|
|
37
|
|
|||
Total revenue
|
1,674
|
|
|
442
|
|
|
2,116
|
|
|||
Depreciation and amortization expense
|
351
|
|
|
67
|
|
|
418
|
|
|||
Equipment rentals gross profit
|
629
|
|
|
218
|
|
|
847
|
|
|||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,237
|
|
|
$
|
299
|
|
|
$
|
1,536
|
|
Sales of rental equipment
|
130
|
|
|
9
|
|
|
139
|
|
|||
Sales of new equipment
|
34
|
|
|
6
|
|
|
40
|
|
|||
Contractor supplies sales
|
17
|
|
|
4
|
|
|
21
|
|
|||
Service and other revenues
|
26
|
|
|
4
|
|
|
30
|
|
|||
Total revenue
|
1,444
|
|
|
322
|
|
|
1,766
|
|
|||
Depreciation and amortization expense
|
306
|
|
|
47
|
|
|
353
|
|
|||
Equipment rentals gross profit
|
525
|
|
|
164
|
|
|
689
|
|
|||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
3,977
|
|
|
$
|
974
|
|
|
$
|
4,951
|
|
Sales of rental equipment
|
446
|
|
|
32
|
|
|
478
|
|
|||
Sales of new equipment
|
125
|
|
|
15
|
|
|
140
|
|
|||
Contractor supplies sales
|
50
|
|
|
16
|
|
|
66
|
|
|||
Service and other revenues
|
95
|
|
|
11
|
|
|
106
|
|
|||
Total revenue
|
4,693
|
|
|
1,048
|
|
|
5,741
|
|
|||
Depreciation and amortization expense
|
1,022
|
|
|
179
|
|
|
1,201
|
|
|||
Equipment rentals gross profit
|
1,598
|
|
|
482
|
|
|
2,080
|
|
|||
Capital expenditures
|
1,845
|
|
|
251
|
|
|
2,096
|
|
|||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
3,357
|
|
|
$
|
712
|
|
|
$
|
4,069
|
|
Sales of rental equipment
|
348
|
|
|
30
|
|
|
378
|
|
|||
Sales of new equipment
|
112
|
|
|
14
|
|
|
126
|
|
|||
Contractor supplies sales
|
49
|
|
|
11
|
|
|
60
|
|
|||
Service and other revenues
|
76
|
|
|
10
|
|
|
86
|
|
|||
Total revenue
|
3,942
|
|
|
777
|
|
|
4,719
|
|
|||
Depreciation and amortization expense
|
855
|
|
|
138
|
|
|
993
|
|
|||
Equipment rentals gross profit
|
1,350
|
|
|
359
|
|
|
1,709
|
|
|||
Capital expenditures
|
1,404
|
|
|
168
|
|
|
1,572
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Total reportable segment assets
|
|
|
|
||||
General rentals
|
$
|
13,766
|
|
|
$
|
13,351
|
|
Trench, power and fluid solutions (1)
|
2,588
|
|
|
1,679
|
|
||
Total assets
|
$
|
16,354
|
|
|
$
|
15,030
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total equipment rentals gross profit
|
$
|
847
|
|
|
$
|
689
|
|
|
$
|
2,080
|
|
|
$
|
1,709
|
|
Gross profit from other lines of business
|
91
|
|
|
84
|
|
|
286
|
|
|
233
|
|
||||
Selling, general and administrative expenses
|
(265
|
)
|
|
(237
|
)
|
|
(736
|
)
|
|
(648
|
)
|
||||
Merger related costs
|
(11
|
)
|
|
(16
|
)
|
|
(14
|
)
|
|
(32
|
)
|
||||
Restructuring charge
|
(9
|
)
|
|
(9
|
)
|
|
(15
|
)
|
|
(28
|
)
|
||||
Non-rental depreciation and amortization
|
(75
|
)
|
|
(63
|
)
|
|
(213
|
)
|
|
(189
|
)
|
||||
Interest expense, net
|
(118
|
)
|
|
(131
|
)
|
|
(339
|
)
|
|
(338
|
)
|
||||
Other income, net
|
—
|
|
|
5
|
|
|
2
|
|
|
5
|
|
||||
Income before provision for income taxes
|
$
|
460
|
|
|
$
|
322
|
|
|
$
|
1,051
|
|
|
$
|
712
|
|
|
|
Reserve Balance at
|
|
Charged to
Costs and Expenses (1) |
|
Payments
and Other |
|
Reserve Balance at
|
||||||||
|
|
December 31, 2017
|
|
|
|
September 30, 2018
|
||||||||||
Closed Restructuring Programs
|
|
|
|
|
|
|
|
|
||||||||
Branch closure charges
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
10
|
|
Severance and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
10
|
|
NES/Neff/Project XL Restructuring Program
|
|
|
|
|
|
|
|
|
||||||||
Branch closure charges
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
Severance and other
|
|
12
|
|
|
7
|
|
|
(11
|
)
|
|
8
|
|
||||
Total
|
|
$
|
20
|
|
|
$
|
8
|
|
|
$
|
(16
|
)
|
|
$
|
12
|
|
BakerCorp Restructuring Program
|
|
|
|
|
|
|
|
|
||||||||
Branch closure charges
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Severance and other
|
|
—
|
|
|
6
|
|
|
(2
|
)
|
|
4
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(2
|
)
|
|
$
|
4
|
|
Total
|
|
|
|
|
|
|
|
|
||||||||
Branch closure charges
|
|
$
|
21
|
|
|
$
|
2
|
|
|
$
|
(9
|
)
|
|
$
|
14
|
|
Severance and other
|
|
12
|
|
|
13
|
|
|
(13
|
)
|
|
12
|
|
||||
Total
|
|
$
|
33
|
|
|
$
|
15
|
|
|
$
|
(22
|
)
|
|
$
|
26
|
|
|
General rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Balance at January 1, 2018 (1)
|
$
|
3,607
|
|
|
$
|
475
|
|
|
$
|
4,082
|
|
Goodwill related to acquisitions (2)
|
44
|
|
|
194
|
|
|
238
|
|
|||
Foreign currency translation and other adjustments
|
(6
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Balance at September 30, 2018 (1)
|
3,645
|
|
|
668
|
|
|
4,313
|
|
(1)
|
The total carrying amount of goodwill for all periods in the table above is reflected net of $
1.557 billion
of accumulated impairment charges, which were primarily recorded in our general rentals segment.
|
(2)
|
For additional detail on the July 2018 acquisition of BakerCorp, which accounted for most of the goodwill related to acquisitions, see note
3
to our condensed consolidated financial statements.
|
|
September 30, 2018
|
||||||||||||||||||
|
Weighted-Average Remaining
Amortization Period
|
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net
Amount
|
||||||||||||
Non-compete agreements
|
28 months
|
|
|
$
|
23
|
|
|
|
|
$
|
17
|
|
|
|
|
$
|
6
|
|
|
Customer relationships
|
8 years
|
|
|
$
|
1,897
|
|
|
|
|
$
|
1,013
|
|
|
|
|
$
|
884
|
|
|
Trade names and associated trademarks
|
5 years
|
|
|
$
|
5
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
5
|
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Weighted-Average Remaining
Amortization Period
|
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net
Amount
|
||||||||||||
Non-compete agreements
|
31 months
|
|
|
$
|
71
|
|
|
|
|
$
|
62
|
|
|
|
|
$
|
9
|
|
|
Customer relationships
|
9 years
|
|
|
$
|
1,750
|
|
|
|
|
$
|
884
|
|
|
|
|
$
|
866
|
|
|
|
September 30, 2018
|
|||||
|
Weighted-Average Remaining
Amortization Period |
|
|
Net Carrying
Amount |
||
Customer relationships
|
8 years
|
|
|
$
|
138
|
|
Trade names and associated trademarks
|
5 years
|
|
|
$
|
5
|
|
2018
|
|
$
|
52
|
|
|
2019
|
193
|
|
|
||
2020
|
167
|
|
|
||
2021
|
141
|
|
|
||
2022
|
114
|
|
|
||
Thereafter
|
228
|
|
|
||
Total
|
|
$
|
895
|
|
|
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, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Senior notes
|
$
|
7,014
|
|
|
$
|
7,006
|
|
|
$
|
7,008
|
|
|
$
|
7,340
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Accounts Receivable Securitization Facility expiring 2018 (1)
|
$
|
865
|
|
|
$
|
695
|
|
$3.0 billion ABL Facility expiring 2021 (2)
|
2,120
|
|
|
1,670
|
|
||
4
5
/
8
percent Senior Secured Notes due 2023
|
993
|
|
|
992
|
|
||
5
3
/
4
percent Senior Notes due 2024
|
842
|
|
|
841
|
|
||
5
1
/
2
percent Senior Notes due 2025
|
794
|
|
|
793
|
|
||
4
5
/
8
percent Senior Notes due 2025
|
741
|
|
|
740
|
|
||
5
7
/
8
percent Senior Notes due 2026
|
999
|
|
|
998
|
|
||
5
1
/
2
percent Senior Notes due 2027
|
991
|
|
|
990
|
|
||
4
7
/
8
percent Senior Notes due 2028 (3)
|
1,650
|
|
|
1,648
|
|
||
4
7
/
8
percent Senior Notes due 2028 (3)
|
4
|
|
|
6
|
|
||
Capital leases
|
79
|
|
|
67
|
|
||
Total debt
|
10,078
|
|
|
9,440
|
|
||
Less short-term portion (4)
|
(896
|
)
|
|
(723
|
)
|
||
Total long-term debt
|
$
|
9,182
|
|
|
$
|
8,717
|
|
(1)
|
In June 2018, the accounts receivable securitization facility was amended, primarily to increase the facility size and to extend the maturity date which may be further extended on a
364
-day basis by mutual agreement with the purchasers under the facility. The size of the facility, which expires on June 29, 2019, was increased to
$875
.
At
September 30, 2018
,
|
(2)
|
At
September 30, 2018
,
$836
was available under our ABL facility, net of
$37
of letters of credit. The interest rate applicable to the ABL facility was
3.7 percent
at
September 30, 2018
. During the
nine
months ended
September 30, 2018
, the monthly average principal amount outstanding under the ABL facility was
$1.485
billion, and the weighted-average interest rate thereon was
3.4 percent
. The maximum month-end principal amount outstanding under the ABL facility during the
nine
months ended
September 30, 2018
was
$2.127 billion
.
|
(3)
|
URNA separately issued 4
7
/
8
percent Senior Notes in August 2017 and in September 2017. Following the issuances, we consummated an exchange offer pursuant to which most of the 4
7
/
8
percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4
7
/
8
percent Senior Notes issued in August 2017.
|
(4)
|
As of
September 30, 2018
, our short-term debt primarily reflects $
865
of borrowings under our accounts receivable securitization facility.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders
|
$
|
333
|
|
|
$
|
199
|
|
|
786
|
|
|
449
|
|
||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic earnings per share—weighted-average common shares
|
82,344
|
|
|
84,663
|
|
|
83,345
|
|
|
84,585
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Employee stock options
|
372
|
|
|
398
|
|
|
389
|
|
|
401
|
|
||||
Restricted stock units
|
456
|
|
|
531
|
|
|
477
|
|
|
488
|
|
||||
Denominator for diluted earnings per share—adjusted weighted-average common shares
|
83,172
|
|
|
85,592
|
|
|
84,211
|
|
|
85,474
|
|
||||
Basic earnings per share
|
$
|
4.05
|
|
|
$
|
2.36
|
|
|
$
|
9.44
|
|
|
$
|
5.31
|
|
Diluted earnings per share
|
$
|
4.01
|
|
|
$
|
2.33
|
|
|
$
|
9.34
|
|
|
$
|
5.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
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
|
|
|
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
|
|
|
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
|
|
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;
|
•
|
A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement
. We continue to implement Lean kaizen processes 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. We achieved the anticipated run rate savings from the Lean initiatives, including those included in the Project XL work streams discussed below, in 2017 and 2016, and expect to continue to generate savings from these initiatives;
|
•
|
The implementation of Project XL,
which is a set of eight specific work streams focused on driving profitable growth through revenue opportunities and generating incremental profitability through cost savings across our business;
|
•
|
The continued expansion of our trench, power and fluid solutions footprint, as well as our tools offering, and the cross-selling of these services throughout our network
, as exhibited by our acquisition of BakerCorp discussed in note
3
to the condensed consolidated financial statements. We believe that the expansion of our trench, power and fluid solutions 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; and
|
•
|
The pursuit of strategic acquisitions to continue to expand our core equipment rental business
, as exhibited by our recently completed acquisitions of NES and Neff, and the pending acquisition of BlueLine discussed in note
12
to the condensed consolidated financial statements. Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.
|
•
|
Redeemed all of our 7
5
/
8
percent Senior Notes and 6
1
/
8
percent Senior Notes;
|
•
|
Issued $750 principal amount of 4
5
/
8
percent Senior Notes due 2025;
|
•
|
Issued $250 principal amount of 5
7
/
8
percent Senior Notes due 2026, as an add-on to our existing 5
7
/
8
percent Senior Notes due 2026;
|
•
|
Issued $250 principal amount of 5
1
/
2
percent Senior Notes due 2027, as an add-on to our existing 5
1
/
2
percent Senior Notes due 2027;
|
•
|
Issued $1.675 billion principal amount of 4
7
/
8
percent Senior Notes due 2028, comprised of separate issuances of $925 in August 2017 and $750 in September 2017. Following the issuances, we consummated an exchange offer pursuant to which most of the 4
7
/
8
percent Senior Notes issued in September 2017 were exchanged for additional notes fungible with the 4
7
/
8
percent Senior Notes issued in August 2017;
|
•
|
Amended and extended our ABL facility, including an increase in the facility size from $2.5 billion to $3.0 billion; and
|
•
|
Amended and extended our accounts receivable securitization facility, including an increase in the facility size from $625 to $875.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
333
|
|
|
$
|
199
|
|
|
$
|
786
|
|
|
$
|
449
|
|
Diluted earnings per share
|
$
|
4.01
|
|
|
$
|
2.33
|
|
|
$
|
9.34
|
|
|
$
|
5.26
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
Tax rate applied to items below
|
25.4
|
%
|
|
|
|
38.5
|
%
|
|
|
|
25.3
|
%
|
|
|
|
38.5
|
%
|
|
|
||||||||||||
|
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)
|
$
|
(7
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(10
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(10
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(20
|
)
|
|
$
|
(0.23
|
)
|
Merger related intangible asset amortization (2)
|
(35
|
)
|
|
(0.42
|
)
|
|
(24
|
)
|
|
(0.27
|
)
|
|
(99
|
)
|
|
(1.18
|
)
|
|
(72
|
)
|
|
(0.83
|
)
|
||||||||
Impact on depreciation related to acquired fleet and property and equipment (3)
|
(1
|
)
|
|
(0.02
|
)
|
|
(6
|
)
|
|
(0.07
|
)
|
|
(16
|
)
|
|
(0.19
|
)
|
|
(4
|
)
|
|
(0.05
|
)
|
||||||||
Impact of the fair value mark-up of acquired fleet (4)
|
(10
|
)
|
|
(0.11
|
)
|
|
(15
|
)
|
|
(0.17
|
)
|
|
(40
|
)
|
|
(0.47
|
)
|
|
(31
|
)
|
|
(0.36
|
)
|
||||||||
Restructuring charge (5)
|
(7
|
)
|
|
(0.09
|
)
|
|
(6
|
)
|
|
(0.07
|
)
|
|
(11
|
)
|
|
(0.13
|
)
|
|
(18
|
)
|
|
(0.21
|
)
|
||||||||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(0.22
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(0.31
|
)
|
(1)
|
This reflects transaction costs associated with the NES, Neff and BakerCorp acquisitions discussed in note
3
to our condensed consolidated financial statements, and the pending BlueLine acquisition discussed in note
12
to our condensed consolidated financial statements. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. For additional information, see "Results of Operations-Other costs/(income)-merger related costs" below.
|
(2)
|
This reflects the amortization of the intangible assets acquired in the RSC, National Pump, NES, Neff and BakerCorp acquisitions.
|
(3)
|
This reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff and BakerCorp acquisitions, 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, NES and Neff acquisitions that was subsequently sold.
|
(5)
|
This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note
5
to our condensed consolidated financial statements.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
333
|
|
|
$
|
199
|
|
|
$
|
786
|
|
|
$
|
449
|
|
Provision for income taxes
|
127
|
|
|
123
|
|
|
265
|
|
|
263
|
|
||||
Interest expense, net
|
118
|
|
|
131
|
|
|
339
|
|
|
338
|
|
||||
Depreciation of rental equipment
|
343
|
|
|
290
|
|
|
988
|
|
|
804
|
|
||||
Non-rental depreciation and amortization
|
75
|
|
|
63
|
|
|
213
|
|
|
189
|
|
||||
EBITDA
|
$
|
996
|
|
|
$
|
806
|
|
|
$
|
2,591
|
|
|
$
|
2,043
|
|
Merger related costs (1)
|
11
|
|
|
16
|
|
|
14
|
|
|
32
|
|
||||
Restructuring charge (2)
|
9
|
|
|
9
|
|
|
15
|
|
|
28
|
|
||||
Stock compensation expense, net (3)
|
30
|
|
|
24
|
|
|
73
|
|
|
64
|
|
||||
Impact of the fair value mark-up of acquired fleet (4)
|
13
|
|
|
24
|
|
|
53
|
|
|
50
|
|
||||
Adjusted EBITDA
|
$
|
1,059
|
|
|
$
|
879
|
|
|
$
|
2,746
|
|
|
$
|
2,217
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
2,123
|
|
|
$
|
1,756
|
|
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
|
(9
|
)
|
|
(6
|
)
|
||
Gain on sales of rental equipment
|
196
|
|
|
153
|
|
||
Gain on sales of non-rental equipment
|
4
|
|
|
4
|
|
||
Gain on insurance proceeds from damaged equipment
|
18
|
|
|
10
|
|
||
Merger related costs (1)
|
(14
|
)
|
|
(32
|
)
|
||
Restructuring charge (2)
|
(15
|
)
|
|
(28
|
)
|
||
Stock compensation expense, net (3)
|
(73
|
)
|
|
(64
|
)
|
||
Loss on repurchase/redemption of debt securities and amendment of ABL facility
|
—
|
|
|
(43
|
)
|
||
Changes in assets and liabilities
|
(68
|
)
|
|
(126
|
)
|
||
Cash paid for interest
|
379
|
|
|
305
|
|
||
Cash paid for income taxes, net
|
50
|
|
|
114
|
|
||
EBITDA
|
$
|
2,591
|
|
|
$
|
2,043
|
|
Add back:
|
|
|
|
||||
Merger related costs (1)
|
14
|
|
|
32
|
|
||
Restructuring charge (2)
|
15
|
|
|
28
|
|
||
Stock compensation expense, net (3)
|
73
|
|
|
64
|
|
||
Impact of the fair value mark-up of acquired fleet (4)
|
53
|
|
|
50
|
|
||
Adjusted EBITDA
|
$
|
2,746
|
|
|
$
|
2,217
|
|
(1)
|
This reflects transaction costs associated with the NES, Neff and BakerCorp acquisitions discussed in note
3
to our condensed consolidated financial statements, and the pending BlueLine acquisition discussed in note
12
to our condensed consolidated financial statements. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. For additional information, see "Results of Operations-Other costs/(income)-merger related costs" below.
|
(2)
|
This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note
5
to our condensed consolidated financial statements.
|
(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, NES and Neff acquisitions that was subsequently sold.
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,444
|
|
|
$
|
417
|
|
|
$
|
1,861
|
|
Sales of rental equipment
|
130
|
|
|
10
|
|
|
140
|
|
|||
Sales of new equipment
|
50
|
|
|
4
|
|
|
54
|
|
|||
Contractor supplies sales
|
17
|
|
|
7
|
|
|
24
|
|
|||
Service and other revenues
|
33
|
|
|
4
|
|
|
37
|
|
|||
Total revenue
|
$
|
1,674
|
|
|
$
|
442
|
|
|
$
|
2,116
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,237
|
|
|
$
|
299
|
|
|
$
|
1,536
|
|
Sales of rental equipment
|
130
|
|
|
9
|
|
|
139
|
|
|||
Sales of new equipment
|
34
|
|
|
6
|
|
|
40
|
|
|||
Contractor supplies sales
|
17
|
|
|
4
|
|
|
21
|
|
|||
Service and other revenues
|
26
|
|
|
4
|
|
|
30
|
|
|||
Total revenue
|
$
|
1,444
|
|
|
$
|
322
|
|
|
$
|
1,766
|
|
Nine Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
3,977
|
|
|
$
|
974
|
|
|
$
|
4,951
|
|
Sales of rental equipment
|
446
|
|
|
32
|
|
|
478
|
|
|||
Sales of new equipment
|
125
|
|
|
15
|
|
|
140
|
|
|||
Contractor supplies sales
|
50
|
|
|
16
|
|
|
66
|
|
|||
Service and other revenues
|
95
|
|
|
11
|
|
|
106
|
|
|||
Total revenue
|
$
|
4,693
|
|
|
$
|
1,048
|
|
|
$
|
5,741
|
|
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
3,357
|
|
|
$
|
712
|
|
|
$
|
4,069
|
|
Sales of rental equipment
|
348
|
|
|
30
|
|
|
378
|
|
|||
Sales of new equipment
|
112
|
|
|
14
|
|
|
126
|
|
|||
Contractor supplies sales
|
49
|
|
|
11
|
|
|
60
|
|
|||
Service and other revenues
|
76
|
|
|
10
|
|
|
86
|
|
|||
Total revenue
|
$
|
3,942
|
|
|
$
|
777
|
|
|
$
|
4,719
|
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
629
|
|
|
$
|
218
|
|
|
$
|
847
|
|
Equipment Rentals Gross Margin
|
43.6
|
%
|
|
52.3
|
%
|
|
45.5
|
%
|
|||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
525
|
|
|
$
|
164
|
|
|
$
|
689
|
|
Equipment Rentals Gross Margin
|
42.4
|
%
|
|
54.8
|
%
|
|
44.9
|
%
|
|||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
1,598
|
|
|
$
|
482
|
|
|
$
|
2,080
|
|
Equipment Rentals Gross Margin
|
40.2
|
%
|
|
49.5
|
%
|
|
42.0
|
%
|
|||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
1,350
|
|
|
$
|
359
|
|
|
$
|
1,709
|
|
Equipment Rentals Gross Margin
|
40.2
|
%
|
|
50.4
|
%
|
|
42.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||
Total gross margin
|
44.3
|
%
|
|
43.8
|
%
|
|
50 bps
|
|
41.2%
|
|
41.2%
|
|
—
|
Equipment rentals
|
45.5
|
%
|
|
44.9
|
%
|
|
60 bps
|
|
42.0%
|
|
42.0%
|
|
—
|
Sales of rental equipment
|
40.7
|
%
|
|
39.6
|
%
|
|
110 bps
|
|
41.0%
|
|
40.5%
|
|
50 bps
|
Sales of new equipment
|
14.8
|
%
|
|
15.0
|
%
|
|
(20) bps
|
|
13.6%
|
|
14.3%
|
|
(70) bps
|
Contractor supplies sales
|
37.5
|
%
|
|
33.3
|
%
|
|
420 bps
|
|
34.8%
|
|
30.0%
|
|
480 bps
|
Service and other revenues
|
45.9
|
%
|
|
53.3
|
%
|
|
(740) bps
|
|
45.3%
|
|
51.2%
|
|
(590) bps
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
Change
|
|
2018
|
|
2017
|
Change
|
Selling, general and administrative ("SG&A") expense
|
$265
|
|
$237
|
11.8%
|
|
$736
|
|
$648
|
13.6%
|
SG&A expense as a percentage of revenue
|
12.5%
|
|
13.4%
|
(90) bps
|
|
12.8%
|
|
13.7%
|
(90) bps
|
Merger related costs
|
11
|
|
16
|
(31.3)%
|
|
14
|
|
32
|
(56.3)%
|
Restructuring charge
|
9
|
|
9
|
—%
|
|
15
|
|
28
|
(46.4)%
|
Non-rental depreciation and amortization
|
75
|
|
63
|
19.0%
|
|
213
|
|
189
|
12.7%
|
Interest expense, net
|
118
|
|
131
|
(9.9)%
|
|
339
|
|
338
|
0.3%
|
Other income, net
|
—
|
|
(5)
|
(100.0)%
|
|
(2)
|
|
(5)
|
(60.0)%
|
Provision for income taxes
|
127
|
|
123
|
3.3%
|
|
265
|
|
263
|
0.8%
|
Effective tax rate
|
27.6%
|
|
38.2%
|
(1,060) bps
|
|
25.2%
|
|
36.9%
|
(1,170) bps
|
ABL facility:
|
|
||
Borrowing capacity, net of letters of credit
|
$
|
836
|
|
Outstanding debt, net of debt issuance costs
|
2,120
|
|
|
Interest rate at September 30, 2018
|
3.7
|
%
|
|
Average month-end principal amount of debt outstanding (1)
|
1,485
|
|
|
Weighted-average interest rate on average debt outstanding
|
3.4
|
%
|
|
Maximum month-end principal amount of debt outstanding (1)
|
2,127
|
|
|
Accounts receivable securitization facility:
|
|
||
Borrowing capacity
|
9
|
|
|
Outstanding debt, net of debt issuance costs
|
865
|
|
|
Interest rate at September 30, 2018
|
3.0
|
%
|
|
Average month-end principal amount of debt outstanding
|
788
|
|
|
Weighted-average interest rate on average debt outstanding
|
2.8
|
%
|
|
Maximum month-end principal amount of debt outstanding
|
870
|
|
(1)
|
The maximum month-end principal amount of debt outstanding under the ABL facility exceeded the average month-end amount outstanding during the
nine
months ended
September 30, 2018
primarily due to the use of borrowings to fund the BakerCorp acquisition discussed in note
3
to the condensed consolidated financial statements.
|
|
Corporate Rating
|
|
Outlook
|
Moody’s
|
Ba2
|
|
Stable
|
Standard & Poor’s
|
BB
|
|
Stable
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
2,123
|
|
|
$
|
1,756
|
|
Purchases of rental equipment
|
(1,962
|
)
|
|
(1,485
|
)
|
||
Purchases of non-rental equipment
|
(134
|
)
|
|
(87
|
)
|
||
Proceeds from sales of rental equipment
|
478
|
|
|
378
|
|
||
Proceeds from sales of non-rental equipment
|
13
|
|
|
10
|
|
||
Insurance proceeds from damaged equipment
|
18
|
|
|
10
|
|
||
Free cash flow
|
$
|
536
|
|
|
$
|
582
|
|
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, 2018 to July 31, 2018
|
467,525
|
|
(1)
|
$
|
149.85
|
|
|
467,111
|
|
|
—
|
|
|
August 1, 2018 to August 31, 2018
|
467,827
|
|
(1)
|
$
|
150.17
|
|
|
466,114
|
|
|
—
|
|
|
September 1, 2018 to September 30, 2018
|
436,833
|
|
(1)
|
$
|
160.68
|
|
|
435,643
|
|
|
—
|
|
|
Total
|
1,372,185
|
|
|
$
|
153.41
|
|
|
1,368,868
|
|
|
$
|
1,040,000,302
|
|
(1)
|
In
July 2018
,
August 2018
and
September 2018
,
414
,
1,713
and
1,190
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 April 17, 2018, our Board authorized a $1.25 billion share repurchase program which commenced in July 2018. We expect to pause repurchases under the program following the completion of the pending BlueLine acquisition discussed in note
12
to our condensed consolidated financial statements. We intend to complete the share repurchase program; however, we will re-evaluate the decision to do so as we integrate BlueLine and assess other potential uses of capital.
|
Item 6.
|
Exhibits
|
2(a)
|
Agreement and Plan of Merger, dated as of June 30, 2018, by and among United Rentals, Inc., UR Merger Sub IV Corporation and BakerCorp International Holdings, Inc. (incorporated by reference to Exhibit 2.1 of the United Rentals, Inc. and
United Rentals (North America), Inc. Current Report on Form 8-K filed on July 2, 2018)
|
|
|
2(b)
|
Agreement and Plan of Merger, dated as of September 10, 2018, by and among United Rentals, Inc., UR Merger Sub V Corporation, Vander Holding Corporation and Platinum Equity Advisors, LLC, solely in its capacity as the initial Holder Representative thereunder (incorporated by reference to Exhibit 2.1 of the
United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on September 10, 2018
)
|
|
|
3(a)
|
Fourth Restated Certificate of Incorporation of United Rentals, Inc., dated June 1, 2017 (incorporated by reference to Exhibit 3.2 of the
United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on June 2, 2017
)
|
|
|
3(b)
|
Amended and Restated By-Laws of United Rentals, Inc., amended as of May 4, 2017 (incorporated by reference to Exhibit 3.4 of the
United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on May 4, 2017
)
|
|
|
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 June 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 June 30, 2013
)
|
|
|
10(a)
|
Letter Agreement with William B. Plummer (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 July 2, 2018
)
|
|
|
10(b)*
|
|
|
|
12*
|
|
|
|
31(a)*
|
|
|
|
31(b)*
|
|
|
|
32(a)**
|
|
|
|
32(b)**
|
|
|
|
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, 2018 filed on October 17, 2018, 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.
|
(a)
|
Employee is employed on at-will basis. Employee’s employment may be terminated by the Company or by the Employee, at any time, for any reason or no reason, without notice or cause.
|
(b)
|
During Employee’s employment, Employee shall devote his or her full time and attention and use his or her best efforts to promote and further the business and services of the Company and shall not be engaged in any other business activity pursued for gain, profit or other pecuniary advantage without the prior written consent of the Company. Employee shall faithfully adhere to, execute and fulfill all policies established by the Company.
|
(c)
|
All funds received by Employee on behalf of the Company, if any, shall be held in trust for the Company and shall be delivered to the Company as soon as practicable. Although the Company will reimburse Employee for appropriate and properly-documented expenses that are incurred by Employee on behalf of the Company in accordance with Company policies in effect from time to time, Employee shall not seek reimbursement for, or utilize a Company credit card or funds for, personal or inappropriate expenses at any time.
|
(d)
|
Employee agrees and acknowledges that if Employee is eligible to receive commissions, bonuses or other incentive pay (referred to collectively as “Incentive Compensation”), such Incentive Compensation, if any, shall be calculated in accordance with the applicable Company policies, procedures and/or plans that are in effect at that time. Employee understands and agrees that it is his or her responsibility to review such policies, procedures and/or plans as needed to ensure his or her comprehension. Employee agrees to raise any questions he or she has about such policies, procedures and/or plans with his or her supervisor or the Human Resources department. Employee further agrees and acknowledges that all applicable Company policies, procedures and/or plans may be revoked or amended at the Company’s sole discretion and at any time without advance notice to Employee.
|
(a)
|
Employee will not communicate or disclose to any person or entity, without the Company’s prior written consent, any Trade Secrets or other Confidential Information (as defined below), whether prepared by Employee or others;
|
(b)
|
Employee will not, except in the furtherance of the business of the Company, use any Trade Secrets or other Confidential Information in order to solicit, call upon or do business with any person or entity;
|
(c)
|
Employee will not directly or indirectly use any Trade Secrets or other Confidential Information other than as directed by the Company in writing;
|
(d)
|
Employee will not, except in the furtherance of the business of the Company, copy, delete, remove and/or retain any Trade Secrets or other Confidential Information, whether in electronic, paper, or other form, from the premises of the Company, or from Company servers, computers, cellular/mobile phones, smartphones, tablets, or other devices, without the prior written consent of the Company;
|
(e)
|
All products, correspondence, reports, records, charts, customer contact information, advertising materials, designs, plans, manuals, field guides, memoranda, lists and other property compiled or produced by Employee or delivered or made available to Employee by or on behalf of the Company or by its customers (including, but not limited to, customers solicited by the Employee), whether or not Confidential Information, shall be and remain the property of the Company, shall be subject at all times to its direction and control, and shall be returned immediately whenever demanded/requested by the Company;
|
(f)
|
Upon termination of employment for any reason whatsoever, or upon request at any time, Employee shall, immediately and in no event more than three (3) business days thereafter: (i) turn over to the Company, and not maintain any copy of, all Company property, data, and information, including, but not limited to, any customer names, contact information, or other customer data stored in any Company or personal cellular/mobile phone, smartphone, tablet, personal computers or other electronic device(s) (collectively, “Devices”), as well as backups of any Device stored on any other Device or in any location (“Backups”); (ii) provide to the Company, in writing, all user names, IDs, passwords, pin codes, and encryption or other access/authorization keys/data utilized by Employee with respect to any Company Devices, computers, hardware or services; (iii) comply with all exit interview and/or termination processes utilized by the Company; (iv) promptly deliver to the Company all originals and copies (whether in note, memo or other document form or on/in the Device(s), Backups, USB drive(s), hard drive(s), video, audio, computer tapes, discs, electronic media, cloud-based accounts, other formats now known or hereinafter devised, or otherwise) of all Trade Secrets or other Confidential Information, and all property identified in Section 2(e) above, that is in Employee’s possession, custody or control, whether prepared by Employee or others, including, but not limited to, the information described above in this Section 2(f); (v) tender to the Company all Company property, including but not limited to any Device(s), Backups, USB drive(s), hard drive(s), video, audio, computer tapes, discs, electronic media, cloud-based accounts, or other electronic devices or formats now known or hereinafter devised, on which Employee stored any Confidential Information or Trade Secrets; and (vi) arrange with the Company a safe, secure, and complete removal/deletion of any and all remaining electronic copies of any such data or information, including, but not limited to, the information described above in this Section 2(f);
|
(g)
|
“Trade Secrets” shall mean all information not generally known about the business of the Company, which is subject to reasonable efforts to maintain its secrecy or confidentiality, and from which the Company derives economic value from the fact that the information is not generally known to others who may obtain economic value from its disclosure or use, regardless of whether such information is specifically designated as a trade secret, and regardless of whether such information may be protected as a trade secret under any applicable law. Employee acknowledges that the Company’s Trade Secrets are owned by the Company in Connecticut, and that Employee will access, utilize, and/or obtain such Trade Secrets.
|
(h)
|
“Confidential Information” includes, but is not limited to:
|
(i)
|
business, strategic and marketing plans and forecasts, and the past results of such plans and forecasts;
|
(ii)
|
business, pricing and management methods, as well as the accumulation, compilation and organization of such information;
|
(iii)
|
operations manuals and best practices memoranda;
|
(iv)
|
finances, strategies, systems, research, surveys, plans, reports, recommendations and conclusions;
|
(v)
|
arrangements with, preferences, pricing history, transaction history, identity of internal contacts or other proprietary business information relating to, the Company’s customers, equipment suppliers, manufacturers, financiers, owners or operators, representatives and other persons who have business relationships with the Company or who are prospects for business relationships with the Company;
|
(vi)
|
technical information, work product and know-how;
|
(vii)
|
cost, operating, and other management information systems, and other software and programming developed, maintained and/or utilized by the Company;
|
(viii)
|
the name of any company or business, any part of which is or at any time was a candidate for potential acquisition by the Company, together with all analyses and other information which the Company has generated, compiled or otherwise obtained with respect to such candidate, business or potential acquisition, or with respect to the potential effect of such acquisition on the Company’s business, assets, financial results or prospects; and
|
(ix)
|
the Company’s Trade Secrets (note that some of the information listed above may also be a Trade Secret).
|
(i)
|
IMPORTANT NOTICE TO ALL EMPLOYEES UNDER 18 U.S.C. SECTION 1833(B): Although the Company is committed to the protection of its Confidential Information and/or Trade Secrets, Employee should be aware that an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
|
(a)
|
During Employee’s employment by the Company and for a period of 12 months following the termination of his or her employment for any reason whatsoever, whether or not for cause or by resignation, Employee will not, directly or indirectly (whether through affiliates, relatives or otherwise):
|
(i)
|
in any Restricted Area (as hereinafter defined), be employed or retained by any person or entity who or which then competes with the Company in the Restricted Area to any reasonable extent, or directly or indirectly own any interest in any such person or entity or render to it any consulting or other services or any advice, assistance or other accommodation. Employee shall be deemed to be employed or retained in the Restricted Area if Employee has an office in the Restricted Area or if Employee performs any duties or renders any advice in, or with respect to any competitive facility or business activities in, the Restricted Area. A “
Restricted Area”
means each of:
|
(A)
|
any state in the United States and any province in Canada in which the Company conducts any equipment rental or other equipment-related activity, it being agreed that each state and province is one unitary market for purposes of the Company’s business;
|
(B)
|
the states of 1) Alabama, 2) Alaska, 3) Arizona, 4) Arkansas, 5) California, 6) Colorado, 7) Connecticut, 8) Delaware, 9) Florida, 10) Georgia, 11) Hawaii, 12) Idaho, 13) Illinois, 14) Indiana, 15) Iowa, 16) Kansas, 17) Kentucky, 18) Louisiana, 19) Maine, 20) Maryland (including the District of Columbia), 21) Massachusetts, 22) Michigan, 23) Minnesota, 24)
|
(C)
|
a 50 mile radius from any and all Company locations for which Employee performed services, or had management, financial, sales, corporate, or other responsibilities, at any time during the two year period preceding the termination of his or her employment;
|
(D)
|
the geographic area(s) in which or in relation to which Employee shall have performed any duties, or had management, financial, sales, corporate, or other responsibilities, for the Company during the two year period preceding the termination of his or her employment; and
|
(E)
|
the geographic area(s) in which or about which Employee had involvement in the development, review, use, presentation, or implementation of Confidential Information during the two year period preceding the termination of his or her employment.
|
(ii)
|
Be employed or retained anywhere in the United States or Canada by a Similar Entity (as hereinafter defined), or directly or indirectly own any interest in any Similar Entity or render to it any consulting or other services. A "
Similar Entity
" means each of:
|
(A)
|
the following: 1) Aggreko, 2) Ahern Rentals, 3) BlueLine Rental, 4) Caterpillar, 5) CAT Rental, 6) Deere & Co., 7) H & E Equipment, 8) Herc Rentals, 9) Home Depot, 10) Mobile Mini, 11) Sunstate Equipment, 12) Sunbelt Rentals, 13) Synergy Equipment, 14) any company on the “RER 100” list, and 15) any affiliate or dealer of any of the foregoing;
|
(B)
|
any entity which at any time during the term of Employee’s employment was a candidate for acquisition by or merger with the Company (provided Employee was aware of the possibility of such acquisition or merger) ; and
|
(C)
|
any entity which owns or owned any assets or facility which were acquired by the Company (provided Employee was involved in or otherwise related to such acquisition).
|
(b)
|
During his or her employment by the Company and for a period of 12 months immediately following the termination of Employee’s employment for any reason whatsoever, whether or not for cause or by resignation, Employee will not anywhere directly or indirectly (whether as an owner, partner, employee, consultant, broker, contractor or otherwise, and whether personally or through other persons):
|
(i)
|
solicit or accept the business of, call upon, contact, or communicate with any person or entity, or affiliate of any such person or entity, who or which is or was a customer, business prospect or other person who had a business relationship with the Company resulting in and/or for the purpose of providing or obtaining any product or service reasonably deemed competitive with any product or service then offered by the Company;
provided
, however, that this limitation shall apply only with respect to persons or entities with whom Employee had a business relationship, with whom Employee communicated, with whom Employee transacted business, or about whom Employee had Confidential Information while employed by the Company;
|
(ii)
|
approve, solicit or retain, or discuss the employment or retention (whether as an employee, consultant or otherwise) of any person who was an employee of the Company at any time during the one year period preceding the termination of Employee’s employment by the Company. Nothing in this section restricts employees from engaging in protected activities with other employees concerning their wages, hours, and working conditions as set forth in Section 7 of the National Labor Relations Act;
|
(iii)
|
solicit or encourage any person to leave the employ of the Company;
|
(iv)
|
call upon or assist in the acquisition of any company which was, during the one-year period preceding the termination of Employee’s employment by the Company, the target of possible acquisition by the Company (provided Employee was aware of the possible acquisition); or
|
(v)
|
own any interest in or be employed by or provide any services to any person or entity which engages in any conduct which is prohibited to Employee under this
Section 3(b)
(this provision shall not prohibit Employee’s ownership of less than 5% of the outstanding common stock of a publicly-traded company).
|
(c)
|
Before taking any position with any person or entity during the 12 month period following the termination of his or her employment for any reason, with or without cause or by resignation, Employee will give prior written notice to the Company of the name of such person or entity, as well as the assigned location, duties and responsibilities related to the position under consideration by Employee. Employee understands and expressly agrees that the obligation to provide written notice under this Section 3(c) is a material term of this Agreement, and that the failure to provide such notice shall be a material breach of this Agreement, and shall constitute a presumption that any employment about which he or she failed to give notice violates Section 3(a) and/or would necessarily result in a violation of Section 3(b) of this Agreement. Irrespective of whether such notice is given, the Company shall be entitled to advise any person or entity of the provisions of this Agreement, and to correspond and otherwise deal with any person or entity to ensure that the provisions of this Agreement are enforced and duly discharged. Employee acknowledges that Employee has not signed a confidentiality, non-competition or non-solicitation agreement with any former employer that by its terms remains in effect.
|
(d)
|
All time periods in Section 3 of this Agreement shall be computed by excluding from such computation any time during which Employee is in violation of any provision of this Agreement and any time during which there is pending in any court of competent jurisdiction any action (including any appeal from any final judgment) brought by any person, whether or not a party to this Agreement, in which action the Company seeks to enforce the agreements and/or covenants in this Agreement or in which any person contests the validity of such agreements and/or covenants or their enforceability or seeks to avoid their performance or enforcement.
|
(e)
|
Employee understands that the provisions of this Agreement have been carefully designed to restrict his or her activities to the minimum extent that is consistent with law and the Company's legitimate interests. Employee has carefully considered these restrictions, and Employee confirms that they are reasonable in both duration and geographic scope and will not unduly restrict Employee’s ability to obtain a livelihood. Employee has heretofore engaged in businesses other than the business in which Employee will be engaged on behalf of the Company. Employee acknowledges and agrees that Employee has had the opportunity to discuss this Agreement and all of its terms with Employee’s attorney before signing this Agreement.
|
(f)
|
Employee acknowledges that monetary damages will be inadequate and the Company will be irreparably damaged if the provisions of this Agreement are not specifically enforced. Employee agrees that, in the event of a breach or threatened breach of this Agreement, the Company shall be entitled, among other remedies (i) to an injunction temporarily, preliminarily, and/or permanently restraining any violation of this Agreement (without any bond or other security being required) by Employee and by any person or entity to whom Employee provides or proposes to provide any services in violation of this Agreement, (ii) to require Employee to hold in a constructive trust, account for and pay over to the Company all compensation and other benefits which Employee shall derive as a result of any action or omission which is a violation of any provision of this Agreement and (iii) to require Employee to account for and pay over to the Company any net profit earned by the Employee from the exercise and/or vesting, during the 24-month period prior to the termination of his or her employment, of any stock options and/or restricted stock issued to him/her by the Company.
|
(g)
|
The terms and provisions of this
Section 3
are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision of this Agreement will thereby be affected. The courts enforcing this Agreement shall be entitled to reform or modify the duration, scope or other provision of any restriction contained herein to the extent such restriction would otherwise be unenforceable, and such restriction as reformed/modified shall be enforced.
|
(a)
|
In the event Employee’s employment was terminated by the Company without “cause” (as defined below), then, for a period of 12 months following termination of employment, the Company shall pay to Employee every two weeks 1/26th of Employee’s Compensation paid to Employee by the Company during the 12 month period immediately preceding termination of his or her employment (as applicable, the “Salary Continuation Payments”); provided, however, all Salary Continuation Payments are conditioned upon Employee’s execution of a separation agreement and general release, in such form as the Company in its sole discretion determines. The Company shall provide Employee with the proposed form of separation agreement and general release no later than seven (7) days following the date of termination, and Employee shall execute and cause to become irrevocable such release no later than fifty-two (52) days after the date of termination. In the event Employee
|
(b)
|
As used in this Section 3.1, “Employee’s Compensation,” for any period, shall be limited to only the Employee’s base salary. For sales employees only, who received more compensation in the form of commissions than base salary during the 12 month period immediately preceding termination, both Employee’s base salary and commissions shall be included in determining Employee’s Compensation.
|
(c)
|
As used in this Section 3.1, “cause” shall mean the occurrence of any of the following events as solely determined by the Company: (i) the Employee has misappropriated any funds or property of the Company, or has willfully or negligently destroyed property of the Company; (ii) the Employee has been convicted of any crime that impairs the Employee’s ability to perform his or her duties and responsibilities with the Company, or that causes or may cause damage to the Company or its operations or reputation, or that involves fraud, embezzlement or moral turpitude; (iii) the Employee has (a) obtained personal profit from any transaction of or involving the Company (or engaged in any activity with the intent of obtaining such a personal profit) without the prior written approval of the Company or (b) engaged in any other conduct which constitutes a breach of fiduciary duty or the duty of loyalty to the Company and which has resulted or may result in damage to the Company; (iv) the Employee’s job performance is unsatisfactory; (v) the Employee has engaged in on-the-job conduct that falls below the standards the Company may reasonably expect; (vi) the Employee’s use of alcohol or drugs has interfered with his or her ability to perform his or her duties and responsibilities with the Company; (vii) the Employee has knowingly made any untrue statement or omission on or in support of the Employee’s application for employment with the Company, regardless of when discovered; (viii) the Employee has falsified Company records; (ix) the Employee has an unsatisfactory record of tardiness and/or attendance; (x) the Employee has committed any act intended to damage the reputation of the Company or which, in fact, damages the reputation of the Company; (xi) the Employee has disclosed to any unauthorized person any confidential or proprietary information, records, data, formulae, specifications or trade secrets or other information of value to the Company; (xii) the Employee has (a) violated the Company’s policies or rules (including, but not limited to, the Company’s equal employment opportunity policies) or (b) is guilty of negligence or misconduct in the performance of his or her duties with the Company; or (xiii) the Employee has given notice or other indication of Employee’s intent to resign, to seek employment with a competitor, and/or to take any action that might injure, damage, or irreparably harm the Company or which could lead to the unauthorized use or disclosure of the Company’s Trade Secrets or Confidential Information.
|
(a)
|
The Company makes no representations regarding the tax implications of any compensation, payments and/or benefits to be paid to Employee under the Employment Agreement, including, without limitation, under Section 409A of the Internal Revenue Code (the “Code”). (Nothing in this Section 3.2 shall be construed as creating a right to any compensation, payments and/or benefits). Employee is advised to consult with a tax attorney/advisor regarding any tax implications. In the event the Company and Employee agree that the terms hereof would result in Employee being subject to tax under Section 409A of the Code, Employee and the Company shall negotiate in good faith to amend the Employment Agreement to the extent necessary to prevent the assessment of any such tax, including by delaying the payment dates of any amounts hereunder. If for any reason, such as imprecision in drafting, any provision of the Employment Agreement (or of any award of compensation, including, without limitation, equity compensation or benefits) does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent.
|
(b)
|
To the extent that the right to any payment (including the provision of benefits) under the Employment Agreement provides for deferred compensation within the meaning of Code Section 409A that is not exempt from Code Section 409A as involuntary separation pay or a short-term deferral (or otherwise), a termination of employment shall not be deemed to have occurred for purposes of any provision of the Employment Agreement providing for any payment or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision, references to a “termination,” “termination of employment,” or like terms shall mean “separation from service”.
|
(c)
|
In addition, notwithstanding any provision to the contrary in the Employment Agreement, if Employee is deemed on the date of Employee’s “separation from service” (within the meaning of Code Section 409A) to be a “specified employee” (within the meaning of Code Section 409A), then with regard to any payment that is required to be delayed pursuant to Code Section 409A(a)(2)(B), such payment shall not be made prior to the earlier of (i) the expiration of the six (6) month period measured from the date of his or her “separation from service” and (ii) the date of his or her death. Each payment under the Employment Agreement shall be treated as a separate payment for purposes of Code Section 409A. In no event may Employee, directly or indirectly, designate the calendar year of any payment to be made under the Employment Agreement.
|
(d)
|
All reimbursements and in-kind benefits provided under the Employment Agreement that constitute deferred compensation within the meaning of Section 409A of the Code shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation, that (i) subject to any shorter time periods provided herein, in no event shall such reimbursements and payments by the Company under the Employment Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred; (ii) the amount of such reimbursements, payments and in-kind benefits that the Company is obligated to pay or provide in any given calendar year shall not affect the reimbursements and in-kind benefits that the Company is obligated to pay or provide in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid); (iii) Employee’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than Employee’s remaining lifetime (or if longer, through the 20th anniversary of the effective date of the Employment Agreement).
|
(a)
|
Consent to Personal Jurisdiction
. Employee hereby agrees that the interpretation and enforcement of the provisions of this Agreement shall be resolved and determined exclusively by the state court sitting in Fairfield County, Connecticut or the federal courts in the District of Connecticut and Employee hereby consents that such courts be granted exclusive jurisdiction for such purpose. Employee hereby acknowledges that, in the performance of his or her duties, Employee will maintain significant contacts with the Company’s corporate offices and/or infrastructure in Connecticut, including, without limitation, telephone and email contacts with corporate personnel, access to corporate databases and other data and intellectual property maintained in Connecticut, required attendance at certain training and/or strategic meetings, and payment of business related travel and entertainment expenses.
|
(b)
|
Waiver of Jury Trial
. Employee and the Company hereby waive a trial by jury in all legal disputes brought pursuant to this Agreement.
|
(c)
|
Waiver of Service
. Employee agrees to waive formal service of process under any applicable federal or state rules of procedure. Service of process shall be effective when given in the manner provided for notices hereunder.
|
(d)
|
Arbitration of Certain Claims by Employee
.
|
(i)
|
Any and all claims by Employee relating to any matter arising during or after the employment of the Employee by Company or in connection with the cessation of said employment shall be resolved exclusively by arbitration conducted by one arbitrator in accordance with the Employment Arbitration Rules and Mediation Procedures established by the American Arbitration Association (AAA). The Company will provide a copy of these Rules to Employee on request. The decision of the arbitrator
|
(ii)
|
The claims and disputes to be arbitrated under this
Section 5(d)
(“
Arbitrable Claims
”) include, without limitation, disputes or claims arising under (A) federal, state, and local statutory or common law (examples include, but are not limited to, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, and the Americans with Disabilities Act), (B) the law of contract and (C) the law of tort.
|
(iii)
|
Each Arbitrable Claim shall automatically expire unless Employee begins arbitration for the claim no later than the first anniversary of the day on which the Employee learned or reasonably should have learned that he or she may have such claim.
|
(iv)
|
No Arbitrable Claim may be initiated or maintained on a putative or certified class, collective or multi-party action basis either in a court or in Arbitration. Any Arbitrable Claim purporting to be brought as a putative or certified class, collective or multi-party action basis will be decided under these rules as an individual claim in Arbitration.
|
(v)
|
No language in this document is intended to limit in any way Employee’s rights under the National Labor Relations Act (“NLRA”), and any claims under the NLRA are specifically excluded from the arbitration provisions described above.
|
(e)
|
Attorneys’ Fees
. If Employee breaches any of the covenants set forth in this Agreement, or brings any action challenging this Agreement or its enforcement, Employee agrees to pay all costs (including reasonable attorneys’ fees) incurred by the Company in establishing that breach and/or in otherwise defending or enforcing any of the covenants or provisions of this Agreement.
|
(a)
|
Both during and after the term of employment hereunder, Employee covenants that Employee will not bring suit or file counterclaims against the Company, for corporate misconduct (which for this purpose does not mean matters for which Employee has a personal claim against the Company in his or her capacity as an employee), unless both of (i) and (ii) shall have occurred, namely:
|
(i)
|
Employee shall have first made written demand to the Company's Board of Directors to investigate and deal with such misconduct, and
|
(ii)
|
The Board of Directors shall have failed within 45 days after the date of receipt of such demand to establish a Special Litigation Committee, consisting exclusively of outside directors, to investigate and deal with such misconduct.
|
(b)
|
Without limiting the generality of and to further implement the foregoing, Employee irrevocably and unconditionally consents at the option of the Company to the entry of temporary restraining orders and temporary and permanent injunctions (without posting bond or other security) against the filing of any action or counterclaim that is prohibited hereunder.
|
(c)
|
The opinion of the Board of Directors shall be binding and conclusive on the determination of which directors constitute "outside directors," and the determination of the Special Litigation Committee shall be binding and conclusive on all matters relating to the actual or alleged misconduct which is referred to it as aforesaid.
|
(a)
|
This Agreement is not a promise of employment. There are no oral representations, understandings or agreements with the Company or any of its officers, directors or employees covering the same subject matter as this Agreement. This written Agreement is the final, complete and exclusive statement and expression of the agreement between the Company and Employee and of all the terms of this Agreement, it cancels and supersedes all prior agreements with respect to the subject matter hereof, and it cannot be modified, varied, contradicted or supplemented by evidence of any prior, contemporaneous or subsequent oral agreement(s), or any prior written agreement(s). Notwithstanding the foregoing, in the case of any Restricted Stock Unit Agreement (“RSU Agreement”) between Employee and the Company, Employee understands that any post-employment obligations contained in such RSU Agreement(s) are independent of and in addition to those contained in this Agreement. Employee also understands and agrees that Employee’s role, responsibilities, and terms of employment may change over time, and that any such change will not affect the validity or enforceability of this Agreement. This written Agreement may not be later modified, varied, contradicted, or supplemented except by a further writing signed by the Company and Employee, and no term of this Agreement may be waived except by a writing signed by the party waiving the benefit of such terms.
|
(b)
|
No waiver by the parties hereto of any default or breach of any term, condition or covenant of this Agreement shall be deemed to be a waiver of any subsequent default or breach of the same or any other term, condition or covenant contained herein. This Agreement is intended, among other things, to supplement the applicable common and/or statutory laws and does not in any way abrogate any of the obligations or duties Employee otherwise owes to the Company.
|
(c)
|
This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective heirs, legal representatives, successors and permitted assigns. Employee may not assign either this Agreement or any of Employee’s rights, interests or obligations hereunder. Employee hereby agrees and acknowledges that the Company may assign any or all of its rights and interest hereunder, including, but not limited to, Employee’s agreements contained in
Section 2
and
Section 3
hereof, without the consent of Employee, to any person or entity that acquires any of the assets of the Company, or to any affiliate of the Company, or to any entity with which the Company merges or consolidates.
|
(d)
|
Whenever any notice is required hereunder, it shall be given in writing addressed as follows:
|
To Employee:
|
To the home address Employee last provided to the Company’s Human Resources department
|
(e)
|
This Agreement contains independently-enforceable obligations. If any section, provision or clause of this Agreement, or any portion thereof, is held void or unenforceable, the remainder of such section, provision or clause, and all other sections, provisions or clauses of this Agreement, shall remain in full force and effect as if the section, provision or clause determined to be void or unenforceable had not been contained herein. The paragraph headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of this Agreement or any part hereof.
|
(f)
|
All rights and remedies of either party expressly set forth herein are intended to be cumulative and not in limitation of any other right or remedy set forth herein or otherwise available to such party at law or in equity. Notwithstanding the foregoing, in no event shall the Company be liable to Employee for consequential or punitive damages, except as specifically provided in this Agreement.
|
(g)
|
This Agreement shall in all respects be construed according to the laws of the State of Connecticut, without regard to its conflict of laws principles.
|
(h)
|
This Agreement may be executed digitally, electronically and/or by facsimile, and may be transmitted digitally, electronically, and/or by facsimile, in any number of counterparts, each of which upon execution and delivery shall be considered an original for all purposes; provided, however, all such counterparts shall, together, upon execution and delivery, constitute one and the same instrument.
|
|
Year Ended December 31,
|
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2013
|
2014
|
2015
|
2016
|
2017
|
|
2018
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
||||||||||||
Income before provision for income taxes
|
$
|
605
|
|
$
|
850
|
|
$
|
963
|
|
$
|
909
|
|
$
|
1,048
|
|
|
$
|
1,051
|
|
Add:
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges, net of capitalized interest
|
521
|
|
520
|
|
492
|
|
461
|
|
465
|
|
|
382
|
|
||||||
Total earnings available for fixed charges
|
1,126
|
|
1,370
|
|
1,455
|
|
1,370
|
|
1,513
|
|
|
1,433
|
|
||||||
Fixed charges (1):
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
475
|
|
555
|
|
567
|
|
511
|
|
464
|
|
|
339
|
|
||||||
Add back interest income, which is netted in interest expense
|
1
|
|
2
|
|
2
|
|
2
|
|
2
|
|
|
1
|
|
||||||
Add back losses on bond repurchases/retirement of subordinated convertible debentures, included in interest expense
|
(3
|
)
|
(80
|
)
|
(123
|
)
|
(101
|
)
|
(54
|
)
|
|
—
|
|
||||||
Interest expense—subordinated convertible debentures
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Capitalized interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Interest component of rent expense
|
45
|
|
43
|
|
46
|
|
49
|
|
53
|
|
|
42
|
|
||||||
Fixed charges
|
$
|
521
|
|
$
|
520
|
|
$
|
492
|
|
$
|
461
|
|
$
|
465
|
|
|
$
|
382
|
|
Ratio of earnings to fixed charges
|
2.2x
|
|
2.6x
|
|
3.0x
|
|
3.0x
|
|
3.3x
|
|
|
3.8x
|
|
(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, 2018
;
|
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
/ M
ICHAEL
J. K
NEELAND
|
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, 2018
;
|
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
/ J
ESSICA
T. G
RAZIANO
|
Jessica T. Graziano
|
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
/ M
ICHAEL
J. K
NEELAND
|
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/ J
ESSICA
T. G
RAZIANO
|
Jessica T. Graziano
|
Chief Financial Officer
|