☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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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
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06-1522496
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Delaware
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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
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Stamford
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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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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $.01 par value, of United Rentals, Inc.
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URI
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New York Stock Exchange
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Large Accelerated Filer
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☒
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Accelerated Filer
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☐
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Non-Accelerated Filer
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☐
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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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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uncertainty regarding the length of time it will take for the United States and the rest of the world to slow the spread of the novel strain of coronavirus (COVID-19) to the point where applicable governmental authorities are comfortable easing current “social distancing” policies, which have required closing many businesses deemed “non-essential”; such restrictions are designed to protect public health but also have the effect of significantly reducing demand for equipment rentals;
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•
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the extent to which businesses in and associated with the construction industry, including equipment rental service providers such as us, continue to be deemed “essential” for the purposes of “social distancing” policies in the regions in which we operate;
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•
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the impact of global economic conditions (including potential trade wars) and public health crises and epidemics, such as COVID-19, on us, our customers and our suppliers, in the United States and the rest of the world;
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•
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the possibility that companies that we have acquired or may acquire, including 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 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 $11.6 billion at March 31, 2020) 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 (including as a result of current volatility and uncertainty in capital markets due to COVID-19), 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, including as a result of reduced demand for fleet due to the impacts of COVID-19 on our customers;
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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 (for example, due to COVID-19);
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•
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rates we charge and time utilization we achieve being less than anticipated (including as a result of COVID-19);
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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 (including as a result of uncertainty in capital markets due to COVID-19);
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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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turnover in our management team and inability to attract and retain key personnel, as well as loss, absenteeism or the inability of employees to work or perform key functions in light of public health crises or epidemics (including COVID-19);
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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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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, failure to protect personal information, compliance with data protection laws 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 (including as a result of Brexit), and tariffs;
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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.
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Item 1.
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Financial Statements
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March 31, 2020
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December 31, 2019
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(unaudited)
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ASSETS
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Cash and cash equivalents
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$
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513
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$
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52
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Accounts receivable, net of allowance for doubtful accounts of $107 at March 31, 2020 and $103 at December 31, 2019
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1,413
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1,530
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Inventory
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115
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120
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Prepaid expenses and other assets
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173
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140
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Total current assets
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2,214
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1,842
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Rental equipment, net
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9,422
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9,787
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Property and equipment, net
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600
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604
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Goodwill
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5,122
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5,154
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Other intangible assets, net
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823
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895
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Operating lease right-of-use assets
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666
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669
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Other long-term assets
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21
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19
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Total assets
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$
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18,868
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$
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18,970
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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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854
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$
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997
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Accounts payable
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484
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454
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Accrued expenses and other liabilities
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658
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747
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Total current liabilities
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1,996
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2,198
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Long-term debt
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10,743
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10,431
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Deferred taxes
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1,878
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1,887
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Operating lease liabilities
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530
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533
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Other long-term liabilities
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86
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91
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Total liabilities
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15,233
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15,140
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Common stock—$0.01 par value, 500,000,000 shares authorized, 114,061,646 and 72,048,137 shares issued and outstanding, respectively, at March 31, 2020 and 113,825,667 and 74,362,195 shares issued and outstanding, respectively, at December 31, 2019
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1
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1
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Additional paid-in capital
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2,435
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2,440
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Retained earnings
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5,448
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5,275
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Treasury stock at cost—42,013,509 and 39,463,472 shares at March 31, 2020 and December 31, 2019, respectively
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(3,957
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)
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(3,700
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)
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Accumulated other comprehensive loss
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(292
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)
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(186
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)
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Total stockholders’ equity
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3,635
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3,830
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Total liabilities and stockholders’ equity
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$
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18,868
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$
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18,970
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Three Months Ended
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March 31,
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2020
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2019
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Revenues:
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Equipment rentals
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$
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1,783
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$
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1,795
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Sales of rental equipment
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208
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192
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Sales of new equipment
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62
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62
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Contractor supplies sales
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25
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24
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Service and other revenues
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47
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44
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Total revenues
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2,125
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2,117
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Cost of revenues:
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Cost of equipment rentals, excluding depreciation
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747
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742
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Depreciation of rental equipment
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426
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395
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Cost of rental equipment sales
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125
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125
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Cost of new equipment sales
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54
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54
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Cost of contractor supplies sales
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18
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17
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Cost of service and other revenues
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28
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|
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23
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Total cost of revenues
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1,398
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|
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1,356
|
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Gross profit
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727
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761
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Selling, general and administrative expenses
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267
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280
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Merger related costs
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—
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1
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Restructuring charge
|
2
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8
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Non-rental depreciation and amortization
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100
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104
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Operating income
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358
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368
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Interest expense, net
|
136
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151
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Other income, net
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(4
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)
|
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(3
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)
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Income before provision for income taxes
|
226
|
|
|
220
|
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Provision for income taxes
|
53
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|
|
45
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Net income
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$
|
173
|
|
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$
|
175
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Basic earnings per share
|
$
|
2.33
|
|
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$
|
2.21
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Diluted earnings per share
|
$
|
2.33
|
|
|
$
|
2.19
|
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Three Months Ended
|
||||||
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March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
173
|
|
|
$
|
175
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
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Foreign currency translation adjustments (1) (2)
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(103
|
)
|
|
20
|
|
||
Fixed price diesel swaps
|
(3
|
)
|
|
1
|
|
||
Other comprehensive income (loss)
|
(106
|
)
|
|
21
|
|
||
Comprehensive income (1)
|
$
|
67
|
|
|
$
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||||
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Common Stock
|
|
|
|
|
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Treasury Stock
|
|
|
||||||||||||||||
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Number of
Shares (1)
|
|
Amount
|
|
Additional Paid-in
Capital
|
|
Retained Earnings
|
|
Number of
Shares
|
|
Amount
|
|
Accumulated Other Comprehensive Loss (2)
|
||||||||||||
Balance at December 31, 2019
|
74
|
|
|
$
|
1
|
|
|
$
|
2,440
|
|
|
$
|
5,275
|
|
|
39
|
|
|
$
|
(3,700
|
)
|
|
$
|
(186
|
)
|
Net income
|
|
|
|
|
|
|
173
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustments (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
(103
|
)
|
|||||||||||
Fixed price diesel swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|||||||||||
Stock compensation expense, net
|
1
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
||||||||||
Exercise of common stock options
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares repurchased and retired
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
Repurchase of common stock
|
(3
|
)
|
|
|
|
|
|
|
|
3
|
|
|
(257
|
)
|
|
|
|||||||||
Balance at March 31, 2020
|
72
|
|
|
$
|
1
|
|
|
$
|
2,435
|
|
|
$
|
5,448
|
|
|
42
|
|
|
$
|
(3,957
|
)
|
|
$
|
(292
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
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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, 2018
|
80
|
|
|
$
|
1
|
|
|
$
|
2,408
|
|
|
$
|
4,101
|
|
|
33
|
|
|
$
|
(2,870
|
)
|
|
$
|
(237
|
)
|
Net income
|
|
|
|
|
|
|
175
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|||||||||||
Fixed price diesel swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|||||||||||
Stock compensation expense, net
|
1
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
||||||||||
Exercise of common stock options
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares repurchased and retired
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|||||||||||
Repurchase of common stock
|
(2
|
)
|
|
|
|
|
|
|
|
2
|
|
|
(210
|
)
|
|
|
|||||||||
Balance at March 31, 2019
|
79
|
|
|
$
|
1
|
|
|
$
|
2,394
|
|
|
$
|
4,276
|
|
|
35
|
|
|
$
|
(3,080
|
)
|
|
$
|
(216
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
173
|
|
|
$
|
175
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
526
|
|
|
499
|
|
||
Amortization of deferred financing costs and original issue discounts
|
4
|
|
|
4
|
|
||
Gain on sales of rental equipment
|
(83
|
)
|
|
(67
|
)
|
||
Gain on sales of non-rental equipment
|
(1
|
)
|
|
(2
|
)
|
||
Gain on insurance proceeds from damaged equipment
|
(6
|
)
|
|
(7
|
)
|
||
Stock compensation expense, net
|
13
|
|
|
15
|
|
||
Merger related costs
|
—
|
|
|
1
|
|
||
Restructuring charge
|
2
|
|
|
8
|
|
||
Increase in deferred taxes
|
1
|
|
|
21
|
|
||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
||||
Decrease in accounts receivable
|
105
|
|
|
73
|
|
||
Decrease (increase) in inventory
|
5
|
|
|
(9
|
)
|
||
(Increase) decrease in prepaid expenses and other assets
|
(30
|
)
|
|
12
|
|
||
Increase in accounts payable
|
33
|
|
|
18
|
|
||
Decrease in accrued expenses and other liabilities
|
(98
|
)
|
|
(74
|
)
|
||
Net cash provided by operating activities
|
644
|
|
|
667
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Purchases of rental equipment
|
(208
|
)
|
|
(257
|
)
|
||
Purchases of non-rental equipment
|
(53
|
)
|
|
(42
|
)
|
||
Proceeds from sales of rental equipment
|
208
|
|
|
192
|
|
||
Proceeds from sales of non-rental equipment
|
9
|
|
|
8
|
|
||
Insurance proceeds from damaged equipment
|
6
|
|
|
7
|
|
||
Purchases of other companies, net of cash acquired
|
—
|
|
|
(173
|
)
|
||
Purchases of investments
|
(1
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(39
|
)
|
|
(265
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Proceeds from debt
|
2,517
|
|
|
1,427
|
|
||
Payments of debt
|
(2,375
|
)
|
|
(1,572
|
)
|
||
Proceeds from the exercise of common stock options
|
1
|
|
|
4
|
|
||
Common stock repurchased
|
(276
|
)
|
|
(243
|
)
|
||
Payments of financing costs
|
(9
|
)
|
|
(9
|
)
|
||
Net cash used in financing activities
|
(142
|
)
|
|
(393
|
)
|
||
Effect of foreign exchange rates
|
(2
|
)
|
|
—
|
|
||
Net increase in cash and cash equivalents
|
461
|
|
|
9
|
|
||
Cash and cash equivalents at beginning of period
|
52
|
|
|
43
|
|
||
Cash and cash equivalents at end of period
|
$
|
513
|
|
|
$
|
52
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
3
|
|
|
$
|
4
|
|
Cash paid for interest
|
174
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
|
2020
|
|
|
|
|
|
2019
|
|
|
||||||||||||
|
Topic 842
|
|
Topic 606
|
|
Total
|
|
Topic 842
|
|
Topic 606
|
|
Total
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owned equipment rentals
|
$
|
1,522
|
|
|
$
|
—
|
|
|
$
|
1,522
|
|
|
$
|
1,530
|
|
|
$
|
—
|
|
|
$
|
1,530
|
|
Re-rent revenue
|
34
|
|
|
—
|
|
|
34
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||||
Ancillary and other rental revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Delivery and pick-up
|
—
|
|
|
119
|
|
|
119
|
|
|
—
|
|
|
119
|
|
|
119
|
|
||||||
Other
|
81
|
|
|
27
|
|
|
108
|
|
|
80
|
|
|
31
|
|
|
111
|
|
||||||
Total ancillary and other rental revenues
|
81
|
|
|
146
|
|
|
227
|
|
|
80
|
|
|
150
|
|
|
230
|
|
||||||
Total equipment rentals
|
1,637
|
|
|
146
|
|
|
1,783
|
|
|
1,645
|
|
|
150
|
|
|
1,795
|
|
||||||
Sales of rental equipment
|
—
|
|
|
208
|
|
|
208
|
|
|
—
|
|
|
192
|
|
|
192
|
|
||||||
Sales of new equipment
|
—
|
|
|
62
|
|
|
62
|
|
|
—
|
|
|
62
|
|
|
62
|
|
||||||
Contractor supplies sales
|
—
|
|
|
25
|
|
|
25
|
|
|
—
|
|
|
24
|
|
|
24
|
|
||||||
Service and other revenues
|
—
|
|
|
47
|
|
|
47
|
|
|
—
|
|
|
44
|
|
|
44
|
|
||||||
Total revenues
|
$
|
1,637
|
|
|
$
|
488
|
|
|
$
|
2,125
|
|
|
$
|
1,645
|
|
|
$
|
472
|
|
|
$
|
2,117
|
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Beginning balance
|
$
|
103
|
|
|
$
|
93
|
|
Acquired
|
—
|
|
|
4
|
|
||
Charged to costs and expenses (1)
|
4
|
|
|
3
|
|
||
Charged to revenue (2)
|
8
|
|
|
12
|
|
||
Deductions (3)
|
(8
|
)
|
|
(8
|
)
|
||
Ending balance
|
$
|
107
|
|
|
$
|
104
|
|
•
|
The transaction price is generally fixed and stated in 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, or result in significant obligations associated with returns, refunds or warranties; 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.
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,394
|
|
|
$
|
389
|
|
|
$
|
1,783
|
|
Sales of rental equipment
|
190
|
|
|
18
|
|
|
208
|
|
|||
Sales of new equipment
|
53
|
|
|
9
|
|
|
62
|
|
|||
Contractor supplies sales
|
16
|
|
|
9
|
|
|
25
|
|
|||
Service and other revenues
|
41
|
|
|
6
|
|
|
47
|
|
|||
Total revenue
|
1,694
|
|
|
431
|
|
|
2,125
|
|
|||
Depreciation and amortization expense
|
437
|
|
|
89
|
|
|
526
|
|
|||
Equipment rentals gross profit
|
448
|
|
|
162
|
|
|
610
|
|
|||
Capital expenditures
|
198
|
|
|
63
|
|
|
261
|
|
|||
Three Months Ended March 31, 2019
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,423
|
|
|
$
|
372
|
|
|
$
|
1,795
|
|
Sales of rental equipment
|
178
|
|
|
14
|
|
|
192
|
|
|||
Sales of new equipment
|
55
|
|
|
7
|
|
|
62
|
|
|||
Contractor supplies sales
|
17
|
|
|
7
|
|
|
24
|
|
|||
Service and other revenues
|
37
|
|
|
7
|
|
|
44
|
|
|||
Total revenue
|
1,710
|
|
|
407
|
|
|
2,117
|
|
|||
Depreciation and amortization expense
|
412
|
|
|
87
|
|
|
499
|
|
|||
Equipment rentals gross profit
|
501
|
|
|
157
|
|
|
658
|
|
|||
Capital expenditures
|
236
|
|
|
63
|
|
|
299
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Total reportable segment assets
|
|
|
|
||||
General rentals
|
$
|
15,994
|
|
|
$
|
16,036
|
|
Trench, power and fluid solutions
|
2,874
|
|
|
2,934
|
|
||
Total assets
|
$
|
18,868
|
|
|
$
|
18,970
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Total equipment rentals gross profit
|
$
|
610
|
|
|
$
|
658
|
|
Gross profit from other lines of business
|
117
|
|
|
103
|
|
||
Selling, general and administrative expenses
|
(267
|
)
|
|
(280
|
)
|
||
Merger related costs
|
—
|
|
|
(1
|
)
|
||
Restructuring charge
|
(2
|
)
|
|
(8
|
)
|
||
Non-rental depreciation and amortization
|
(100
|
)
|
|
(104
|
)
|
||
Interest expense, net
|
(136
|
)
|
|
(151
|
)
|
||
Other income, net
|
4
|
|
|
3
|
|
||
Income before provision for income taxes
|
$
|
226
|
|
|
$
|
220
|
|
|
|
|
|
|
|
|
|
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.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Senior notes
|
$
|
8,500
|
|
|
$
|
8,203
|
|
|
$
|
7,755
|
|
|
$
|
8,176
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Accounts Receivable Securitization Facility expiring 2020 (1) (2)
|
$
|
795
|
|
|
$
|
929
|
|
$3.75 billion ABL Facility expiring 2024 (1) (3)
|
1,179
|
|
|
1,638
|
|
||
Term loan facility expiring 2025 (1)
|
977
|
|
|
979
|
|
||
5 1/2 percent Senior Notes due 2025 (3)
|
795
|
|
|
795
|
|
||
4 5/8 percent Senior Notes due 2025
|
743
|
|
|
742
|
|
||
5 7/8 percent Senior Notes due 2026
|
999
|
|
|
999
|
|
||
6 1/2 percent Senior Notes due 2026
|
1,089
|
|
|
1,089
|
|
||
5 1/2 percent Senior Notes due 2027
|
993
|
|
|
992
|
|
||
3 7/8 percent Senior Secured Notes due 2027
|
741
|
|
|
741
|
|
||
4 7/8 percent Senior Notes due 2028 (4)
|
1,653
|
|
|
1,652
|
|
||
4 7/8 percent Senior Notes due 2028 (4)
|
4
|
|
|
4
|
|
||
5 1/4 percent Senior Notes due 2030
|
742
|
|
|
741
|
|
||
4 percent Senior Notes due 2030 (5)
|
741
|
|
|
—
|
|
||
Finance leases
|
146
|
|
|
127
|
|
||
Total debt
|
11,597
|
|
|
11,428
|
|
||
Less short-term portion (6)
|
(854
|
)
|
|
(997
|
)
|
||
Total long-term debt
|
$
|
10,743
|
|
|
$
|
10,431
|
|
|
ABL facility
|
|
Accounts receivable securitization facility
|
|
Term loan facility
|
||||||
Borrowing capacity, net of letters of credit
|
$
|
2,508
|
|
|
$
|
62
|
|
|
$
|
—
|
|
Letters of credit
|
52
|
|
|
|
|
|
|||||
Interest rate at March 31, 2020
|
2.2
|
%
|
|
2.1
|
%
|
|
2.7
|
%
|
|||
Average month-end debt outstanding
|
1,097
|
|
|
804
|
|
|
987
|
|
|||
Weighted-average interest rate on average debt outstanding
|
2.7
|
%
|
|
2.4
|
%
|
|
3.2
|
%
|
|||
Maximum month-end debt outstanding
|
1,494
|
|
|
811
|
|
|
988
|
|
(2)
|
Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans. As of March 31, 2020, there were $857 of receivables, net of applicable reserves and other deductions, in the collateral pool. As explained further below, in April 2020, we amended the accounts receivable securitization facility to adjust financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The adjustments to these tests are intended to make compliance with such tests more likely, and are not expected to materially impact our financial statements. The accounts receivable securitization facility expires on June 26, 2020, and we expect to renew the facility in the second quarter of 2020.
|
(3)
|
The decrease in the outstanding debt under the ABL facility since December 31, 2019 primarily reflects using proceeds from the issuance of 4 percent Senior Notes (the “4 percent Notes”) discussed below to reduce borrowings under the ABL facility. At the time of the offering of the 4 percent Notes, we indicated our expectation that we would re-borrow an amount equal to net proceeds from the offering (discussed below), along with additional borrowings under the ABL facility, to redeem our 5 1/2 percent Senior Notes due 2025 on or after July 15, 2020. Prior to redeeming any 5 1/2 percent Senior Notes due 2025, due primarily to the potential impact of COVID-19 on liquidity, we plan to assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. We currently expect to make a decision regarding the redemption of 5 1/2 percent Senior Notes due 2025 during the second half of 2020.
|
(4)
|
URNA separately issued 4 7/8 percent Senior Notes in August 2017 and in September 2017. Following the issuances, URNA 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.
|
(5)
|
In February 2020, URNA issued $750 aggregate principal amount of 4 percent Notes which are due July 15, 2030. The net proceeds from the issuance were approximately $741 (after deducting offering expenses). The 4 percent Notes are unsecured and are guaranteed by Holdings and certain domestic subsidiaries of URNA. The 4 percent Notes may be redeemed on or after July 15, 2025, at specified redemption prices that range from 102.000 percent in 2025, to 100 percent in 2028 and thereafter, in each case, plus accrued and unpaid interest, if any. In addition, at any time on or prior to July 15, 2023, up to 40 percent of the aggregate principal amount of the 4 percent Notes may be redeemed with the net cash proceeds of certain equity offerings at a redemption price equal to 104.000 percent of the aggregate principal amount of the notes plus accrued and unpaid interest, if any. The indenture governing the 4 percent Notes contains certain restrictive covenants, including, among others, limitations on (i) liens and (ii) mergers and consolidations, as well as a requirement to timely file periodic reports with the SEC. Each of the restrictive covenants is subject to important exceptions and qualifications that would allow URNA and its subsidiaries to engage in these activities under certain conditions. In addition, the requirements to provide subsidiary guarantees and to make an offer to repurchase the notes upon the occurrence of a change of control will not apply to URNA and its restricted subsidiaries during any period when the 4 percent Notes are rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the indenture has occurred and is continuing. The indenture also requires that, in the event of a change of control (as defined in the indenture), URNA must make an offer to purchase all of the then-outstanding 4 percent Notes tendered at a purchase price in cash equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest, if any, thereon.
|
(6)
|
As of March 31, 2020, our short-term debt primarily reflects $795 of borrowings under our accounts receivable securitization facility.
|
|
Classification
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets
|
|
|
|
|
||||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
666
|
|
|
$
|
669
|
|
Finance lease assets
|
Rental equipment
|
296
|
|
|
286
|
|
||
|
Less accumulated depreciation
|
(87
|
)
|
|
(89
|
)
|
||
|
Rental equipment, net
|
209
|
|
|
197
|
|
||
|
Property and equipment, net:
|
|
|
|
||||
|
Non-rental vehicles
|
8
|
|
|
8
|
|
||
|
Buildings
|
18
|
|
|
18
|
|
||
|
Less accumulated depreciation and amortization
|
(9
|
)
|
|
(15
|
)
|
||
|
Property and equipment, net
|
17
|
|
|
11
|
|
||
Total leased assets
|
|
892
|
|
|
877
|
|
||
Liabilities
|
|
|
|
|
||||
Current
|
|
|
|
|
||||
Operating
|
Accrued expenses and other liabilities
|
177
|
|
|
178
|
|
||
Finance
|
Short-term debt and current maturities of long-term debt
|
49
|
|
|
58
|
|
||
Long-term
|
|
|
|
|
||||
Operating
|
Operating lease liabilities
|
530
|
|
|
533
|
|
||
Finance
|
Long-term debt
|
97
|
|
|
69
|
|
||
Total lease liabilities
|
|
$
|
853
|
|
|
$
|
838
|
|
Lease cost
|
Classification
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Operating lease cost (1)
|
Cost of equipment rentals, excluding depreciation (1)
|
$
|
92
|
|
|
$
|
89
|
|
|
Selling, general and administrative expenses
|
3
|
|
|
3
|
|
||
|
Restructuring charge
|
1
|
|
|
6
|
|
||
Finance lease cost
|
|
|
|
|
||||
Amortization of leased assets
|
Depreciation of rental equipment
|
7
|
|
|
7
|
|
||
|
Non-rental depreciation and amortization
|
—
|
|
|
1
|
|
||
Interest on lease liabilities
|
Interest expense, net
|
3
|
|
|
2
|
|
||
Sublease income (2)
|
|
(34
|
)
|
|
(38
|
)
|
||
Net lease cost
|
|
$
|
72
|
|
|
$
|
70
|
|
Maturity of lease liabilities (as of March 31, 2020)
|
Operating leases (1)
|
|
Finance leases (2)
|
||||
2020
|
$
|
157
|
|
|
$
|
45
|
|
2021
|
186
|
|
|
55
|
|
||
2022
|
149
|
|
|
31
|
|
||
2023
|
115
|
|
|
18
|
|
||
2024
|
81
|
|
|
2
|
|
||
Thereafter
|
103
|
|
|
6
|
|
||
Total
|
791
|
|
|
157
|
|
||
Less amount representing interest
|
(84
|
)
|
|
(11
|
)
|
||
Present value of lease liabilities
|
$
|
707
|
|
|
$
|
146
|
|
Lease term and discount rate
|
March 31, 2020
|
|
December 31, 2019
|
||
Weighted-average remaining lease term (years)
|
|
|
|
||
Operating leases
|
4.8
|
|
|
4.8
|
|
Finance leases
|
3.2
|
|
|
3.2
|
|
Weighted-average discount rate
|
|
|
|
||
Operating leases
|
4.6
|
%
|
|
4.7
|
%
|
Finance leases
|
3.7
|
%
|
|
4.0
|
%
|
Other information
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
52
|
|
|
$
|
50
|
|
Operating cash flows from finance leases
|
3
|
|
|
2
|
|
||
Financing cash flows from finance leases
|
12
|
|
|
10
|
|
||
Leased assets obtained in exchange for new operating lease liabilities
|
48
|
|
|
75
|
|
||
Leased assets obtained in exchange for new finance lease liabilities
|
$
|
34
|
|
|
$
|
8
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net income available to common stockholders
|
173
|
|
|
175
|
|
||
Denominator:
|
|
|
|
||||
Denominator for basic earnings per share—weighted-average common shares
|
74,041
|
|
|
79,401
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Employee stock options
|
15
|
|
|
294
|
|
||
Restricted stock units
|
210
|
|
|
352
|
|
||
Denominator for diluted earnings per share—adjusted weighted-average common shares
|
74,266
|
|
|
80,047
|
|
||
Basic earnings per share
|
$
|
2.33
|
|
|
$
|
2.21
|
|
Diluted earnings per share
|
$
|
2.33
|
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Parent
|
|
URNA
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||||||||
Foreign
|
|
SPV
|
|
||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equipment rentals
|
$
|
—
|
|
|
$
|
1,630
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,783
|
|
Sales of rental equipment
|
—
|
|
|
189
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
208
|
|
|||||||
Sales of new equipment
|
—
|
|
|
53
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Contractor supplies sales
|
—
|
|
|
22
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
Service and other revenues
|
—
|
|
|
42
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||||
Total revenues
|
—
|
|
|
1,936
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
—
|
|
|
2,125
|
|
|||||||
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of equipment rentals, excluding depreciation
|
—
|
|
|
676
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
747
|
|
|||||||
Depreciation of rental equipment
|
—
|
|
|
393
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|||||||
Cost of rental equipment sales
|
—
|
|
|
116
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|||||||
Cost of new equipment sales
|
—
|
|
|
46
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||||
Cost of contractor supplies sales
|
—
|
|
|
16
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||||
Cost of service and other revenues
|
—
|
|
|
25
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||||
Total cost of revenues
|
—
|
|
|
1,272
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
1,398
|
|
|||||||
Gross profit
|
—
|
|
|
664
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
727
|
|
|||||||
Selling, general and administrative expenses
|
37
|
|
|
190
|
|
|
—
|
|
|
25
|
|
|
16
|
|
|
(1
|
)
|
|
267
|
|
|||||||
Restructuring charge
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Non-rental depreciation and amortization
|
5
|
|
|
87
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|||||||
Operating (loss) income
|
(42
|
)
|
|
385
|
|
|
—
|
|
|
30
|
|
|
(16
|
)
|
|
1
|
|
|
358
|
|
|||||||
Interest (income) expense, net
|
(17
|
)
|
|
148
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
136
|
|
|||||||
Other (income) expense, net
|
(172
|
)
|
|
196
|
|
|
—
|
|
|
14
|
|
|
(43
|
)
|
|
1
|
|
|
(4
|
)
|
|||||||
Income before provision for income taxes
|
147
|
|
|
41
|
|
|
—
|
|
|
16
|
|
|
22
|
|
|
—
|
|
|
226
|
|
|||||||
Provision for income taxes
|
34
|
|
|
9
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
53
|
|
|||||||
Income before equity in net earnings (loss) of subsidiaries
|
113
|
|
|
32
|
|
|
—
|
|
|
12
|
|
|
16
|
|
|
—
|
|
|
173
|
|
|||||||
Equity in net earnings (loss) of subsidiaries
|
60
|
|
|
28
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|
—
|
|
|||||||
Net income (loss)
|
173
|
|
|
60
|
|
|
11
|
|
|
12
|
|
|
16
|
|
|
(99
|
)
|
|
173
|
|
|||||||
Other comprehensive (loss) income
|
(106
|
)
|
|
(106
|
)
|
|
(95
|
)
|
|
(102
|
)
|
|
—
|
|
|
303
|
|
|
(106
|
)
|
|||||||
Comprehensive income (loss)
|
$
|
67
|
|
|
$
|
(46
|
)
|
|
$
|
(84
|
)
|
|
$
|
(90
|
)
|
|
$
|
16
|
|
|
$
|
204
|
|
|
$
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Parent
|
|
URNA
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||||||||
|
Foreign
|
|
SPV
|
|
|||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equipment rentals
|
$
|
—
|
|
|
$
|
1,638
|
|
|
$
|
—
|
|
|
$
|
157
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,795
|
|
Sales of rental equipment
|
—
|
|
|
173
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
192
|
|
|||||||
Sales of new equipment
|
—
|
|
|
53
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Contractor supplies sales
|
—
|
|
|
22
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||||
Service and other revenues
|
—
|
|
|
39
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|||||||
Total revenues
|
—
|
|
|
1,925
|
|
|
—
|
|
|
192
|
|
|
—
|
|
|
—
|
|
|
2,117
|
|
|||||||
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of equipment rentals, excluding depreciation
|
—
|
|
|
657
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
742
|
|
|||||||
Depreciation of rental equipment
|
—
|
|
|
364
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
395
|
|
|||||||
Cost of rental equipment sales
|
—
|
|
|
113
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|||||||
Cost of new equipment sales
|
—
|
|
|
46
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||||
Cost of contractor supplies sales
|
—
|
|
|
16
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||||
Cost of service and other revenues
|
—
|
|
|
21
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Total cost of revenues
|
—
|
|
|
1,217
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
1,356
|
|
|||||||
Gross profit
|
—
|
|
|
708
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
761
|
|
|||||||
Selling, general and administrative expenses
|
53
|
|
|
183
|
|
|
—
|
|
|
27
|
|
|
17
|
|
|
—
|
|
|
280
|
|
|||||||
Merger related costs
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Restructuring charge
|
—
|
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Non-rental depreciation and amortization
|
4
|
|
|
91
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|||||||
Operating (loss) income
|
(57
|
)
|
|
424
|
|
|
—
|
|
|
18
|
|
|
(17
|
)
|
|
—
|
|
|
368
|
|
|||||||
Interest (income) expense, net
|
(16
|
)
|
|
159
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
151
|
|
|||||||
Other (income) expense, net
|
(172
|
)
|
|
197
|
|
|
—
|
|
|
14
|
|
|
(42
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||
Income before provision for income taxes
|
131
|
|
|
68
|
|
|
—
|
|
|
4
|
|
|
17
|
|
|
—
|
|
|
220
|
|
|||||||
Provision for income taxes
|
23
|
|
|
16
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
45
|
|
|||||||
Income before equity in net earnings (loss) of subsidiaries
|
108
|
|
|
52
|
|
|
—
|
|
|
3
|
|
|
12
|
|
|
—
|
|
|
175
|
|
|||||||
Equity in net earnings (loss) of subsidiaries
|
67
|
|
|
15
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|||||||
Net income (loss)
|
175
|
|
|
67
|
|
|
2
|
|
|
3
|
|
|
12
|
|
|
(84
|
)
|
|
175
|
|
|||||||
Other comprehensive income (loss)
|
21
|
|
|
21
|
|
|
21
|
|
|
19
|
|
|
—
|
|
|
(61
|
)
|
|
21
|
|
|||||||
Comprehensive income (loss)
|
$
|
196
|
|
|
$
|
88
|
|
|
$
|
23
|
|
|
$
|
22
|
|
|
$
|
12
|
|
|
$
|
(145
|
)
|
|
$
|
196
|
|
|
Parent
|
|
URNA
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||||||||
Foreign
|
|
SPV
|
|
||||||||||||||||||||||||
Net cash provided by operating activities
|
$
|
18
|
|
|
$
|
483
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
644
|
|
Net cash used in investing activities
|
(18
|
)
|
|
(15
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|||||||
Net cash used in financing activities
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(15
|
)
|
|
(104
|
)
|
|
—
|
|
|
(142
|
)
|
|||||||
Effect of foreign exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Net increase in cash and cash equivalents
|
—
|
|
|
445
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
461
|
|
|||||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
28
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
513
|
|
|
Parent
|
|
URNA
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||||||||
|
|
|
|
Foreign
|
|
SPV
|
|
|
|||||||||||||||||||
Net cash provided by operating activities
|
$
|
5
|
|
|
$
|
566
|
|
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
667
|
|
Net cash used in investing activities
|
(5
|
)
|
|
(256
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(265
|
)
|
|||||||
Net cash used in financing activities
|
—
|
|
|
(287
|
)
|
|
—
|
|
|
(45
|
)
|
|
(61
|
)
|
|
—
|
|
|
(393
|
)
|
|||||||
Effect of foreign exchange rates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
23
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
1
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data, unless otherwise indicated)
|
1.
|
Ensuring employee safety and well-being: Above all else, we are committed to ensuring the health, safety and well-being of our employees and customers. We have implemented a variety of COVID-19 safety measures, including ensuring that branches have sufficient and adequate personal protection equipment. We have also implemented appropriate social distancing practices, and increased disinfecting of equipment and facilities.
|
2.
|
Leveraging our competitive advantages to support the needs of customers: All our branches in the U.S. and Canada remain open to provide essential services, and most of our European branches are also operating. We have made modifications to enhance safety measures in our operating processes and protocols that support the needs of our customers. Additionally, our digital capabilities allow customers to perform fully contactless transactions.
|
3.
|
Disciplined capital expenditures: We have a substantial degree of flexibility in managing our capital expenditures and fleet capacity. While the current environment remains fluid, we expect that our 2020 capital expenditures will be down significantly year-over-year.
|
4.
|
Controlling core operating expenses: A significant portion of our cash operating costs are variable in nature. Since March, we have significantly reduced overtime and temporary labor primarily in response to the impact of COVID-19. Furthermore, we continue to leverage our current capacity to reduce the need for third-party delivery and repair services, and minimize other discretionary expenses across general and administrative areas.
|
5.
|
Proactively managing the balance sheet with a focus on liquidity: We are focused on ensuring that we maintain ample liquidity to meet our business needs as the impact of COVID-19 evolves. As a result, our current $500 share repurchase program was paused in mid-March. At March 31, 2020, our total liquidity was $3.083 billion, including $513 in cash and cash equivalents. Additionally, we have no long-term debt maturities until 2025.
|
•
|
A consistently superior standard of service to customers, often provided through a single lead contact who can coordinate the cross-selling of the various services we offer throughout our network. We utilize a proprietary software application, Total Control®, which provides our key customers with a single in-house software application that enables them to monitor and manage all their equipment needs. Total Control® is a unique customer offering that enables us to develop strong, long-term relationships with our larger customers. Our digital capabilities, including our Total Control® platform, allow our sales teams to provide contactless end-to-end customer service;
|
•
|
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;
|
•
|
A continued focus on 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 and onsite services offerings, and the cross-selling of these services throughout our network, as exhibited by our recent acquisition of BakerCorp discussed above. We believe that the expansion of our trench, power and fluid solutions business, as well as our tools and onsite services offerings, 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 Rentals Holdings II, Inc. (“NES”), Neff Corporation ("Neff") and Vander Holding Corporation and its subsidiaries (“BlueLine”). Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
173
|
|
|
$
|
175
|
|
Diluted earnings per share
|
$
|
2.33
|
|
|
$
|
2.19
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
Tax rate applied to items below
|
25.2
|
%
|
|
|
|
25.4
|
%
|
|
|
||||||
|
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)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Merger related intangible asset amortization (2)
|
(44
|
)
|
|
(0.59
|
)
|
|
(52
|
)
|
|
(0.64
|
)
|
||||
Impact on depreciation related to acquired fleet and property and equipment (3)
|
(2
|
)
|
|
(0.03
|
)
|
|
(11
|
)
|
|
(0.14
|
)
|
||||
Impact of the fair value mark-up of acquired fleet (4)
|
(9
|
)
|
|
(0.12
|
)
|
|
(20
|
)
|
|
(0.25
|
)
|
||||
Restructuring charge (5)
|
(1
|
)
|
|
(0.02
|
)
|
|
(6
|
)
|
|
(0.07
|
)
|
||||
Asset impairment charge (6)
|
(19
|
)
|
|
(0.26
|
)
|
|
—
|
|
|
(0.01
|
)
|
(1)
|
This reflects transaction costs associated with the BakerCorp and BlueLine acquisitions that were completed in 2018. 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, BakerCorp and BlueLine acquisitions.
|
(3)
|
This reflects the impact of extending the useful lives of equipment acquired in the RSC, NES, Neff, BakerCorp and BlueLine 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, Neff and BlueLine acquisitions that was subsequently sold.
|
(5)
|
This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 4 to our condensed consolidated financial statements.
|
(6)
|
This reflects write-offs of leasehold improvements and other fixed assets. 2020 includes a $26 pre-tax asset impairment charge, which was not related to COVID-19, primarily associated with the discontinuation of certain equipment programs.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
173
|
|
|
$
|
175
|
|
Provision for income taxes
|
53
|
|
|
45
|
|
||
Interest expense, net
|
136
|
|
|
151
|
|
||
Depreciation of rental equipment
|
426
|
|
|
395
|
|
||
Non-rental depreciation and amortization
|
100
|
|
|
104
|
|
||
EBITDA
|
$
|
888
|
|
|
$
|
870
|
|
Merger related costs (1)
|
—
|
|
|
1
|
|
||
Restructuring charge (2)
|
2
|
|
|
8
|
|
||
Stock compensation expense, net (3)
|
13
|
|
|
15
|
|
||
Impact of the fair value mark-up of acquired fleet (4)
|
12
|
|
|
27
|
|
||
Adjusted EBITDA
|
$
|
915
|
|
|
$
|
921
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
644
|
|
|
$
|
667
|
|
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
|
(4
|
)
|
|
(4
|
)
|
||
Gain on sales of rental equipment
|
83
|
|
|
67
|
|
||
Gain on sales of non-rental equipment
|
1
|
|
|
2
|
|
||
Gain on insurance proceeds from damaged equipment
|
6
|
|
|
7
|
|
||
Merger related costs (1)
|
—
|
|
|
(1
|
)
|
||
Restructuring charge (2)
|
(2
|
)
|
|
(8
|
)
|
||
Stock compensation expense, net (3)
|
(13
|
)
|
|
(15
|
)
|
||
Changes in assets and liabilities
|
(4
|
)
|
|
(28
|
)
|
||
Cash paid for interest
|
174
|
|
|
179
|
|
||
Cash paid for income taxes, net
|
3
|
|
|
4
|
|
||
EBITDA
|
$
|
888
|
|
|
$
|
870
|
|
Add back:
|
|
|
|
||||
Merger related costs (1)
|
—
|
|
|
1
|
|
||
Restructuring charge (2)
|
2
|
|
|
8
|
|
||
Stock compensation expense, net (3)
|
13
|
|
|
15
|
|
||
Impact of the fair value mark-up of acquired fleet (4)
|
12
|
|
|
27
|
|
||
Adjusted EBITDA
|
$
|
915
|
|
|
$
|
921
|
|
(1)
|
This reflects transaction costs associated with the BakerCorp and BlueLine acquisitions that were completed in 2018. 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 4 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, Neff and BlueLine acquisitions that was subsequently sold.
|
|
Three Months Ended March 31,
|
|||||||||
|
2020
|
|
2019
|
|
Change
|
|||||
Equipment rentals*
|
$
|
1,783
|
|
|
$
|
1,795
|
|
|
(0.7
|
)%
|
Sales of rental equipment
|
208
|
|
|
192
|
|
|
8.3
|
%
|
||
Sales of new equipment
|
62
|
|
|
62
|
|
|
—
|
%
|
||
Contractor supplies sales
|
25
|
|
|
24
|
|
|
4.2
|
%
|
||
Service and other revenues
|
47
|
|
|
44
|
|
|
6.8
|
%
|
||
Total revenues
|
$
|
2,125
|
|
|
$
|
2,117
|
|
|
0.4
|
%
|
*Equipment rentals variance components:
|
|
|
|
|
|
|||||
Year-over-year change in average OEC
|
|
|
|
|
2.2
|
%
|
||||
Assumed year-over-year inflation impact (1)
|
|
|
|
|
(1.5
|
)%
|
||||
Fleet productivity (2)
|
|
|
|
|
(1.2
|
)%
|
||||
Contribution from ancillary and re-rent revenue (3)
|
|
|
|
|
(0.2
|
)%
|
||||
Total change in equipment rentals
|
|
|
|
|
(0.7
|
)%
|
(1)
|
Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
|
(2)
|
Reflects the combined impact of changes in rental rates, time utilization, and mix that contribute to the variance in owned equipment rental revenue. See note 2 to the condensed consolidated financial statements for a discussion of the different types of equipment rentals revenue. Rental rate changes are calculated based on the year-over-year variance in average contract rates, weighted by the prior period revenue mix. Time utilization is calculated by dividing the amount of time an asset is on rent by the amount of time the asset has been owned during the year. Mix includes the impact of changes in customer, fleet, geographic and segment mix.
|
(3)
|
Reflects the combined impact of changes in the other types of equipment rentals revenue (see note 2 for further detail), excluding owned equipment rental revenue.
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,394
|
|
|
$
|
389
|
|
|
$
|
1,783
|
|
Sales of rental equipment
|
190
|
|
|
18
|
|
|
208
|
|
|||
Sales of new equipment
|
53
|
|
|
9
|
|
|
62
|
|
|||
Contractor supplies sales
|
16
|
|
|
9
|
|
|
25
|
|
|||
Service and other revenues
|
41
|
|
|
6
|
|
|
47
|
|
|||
Total revenue
|
$
|
1,694
|
|
|
$
|
431
|
|
|
$
|
2,125
|
|
Three Months Ended March 31, 2019
|
|
|
|
|
|
||||||
Equipment rentals
|
$
|
1,423
|
|
|
$
|
372
|
|
|
$
|
1,795
|
|
Sales of rental equipment
|
178
|
|
|
14
|
|
|
192
|
|
|||
Sales of new equipment
|
55
|
|
|
7
|
|
|
62
|
|
|||
Contractor supplies sales
|
17
|
|
|
7
|
|
|
24
|
|
|||
Service and other revenues
|
37
|
|
|
7
|
|
|
44
|
|
|||
Total revenue
|
$
|
1,710
|
|
|
$
|
407
|
|
|
$
|
2,117
|
|
|
General
rentals
|
|
Trench, power and fluid solutions
|
|
Total
|
||||||
Three Months Ended March 31, 2020
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
448
|
|
|
$
|
162
|
|
|
$
|
610
|
|
Equipment Rentals Gross Margin
|
32.1
|
%
|
|
41.6
|
%
|
|
34.2
|
%
|
|||
Three Months Ended March 31, 2019
|
|
|
|
|
|
||||||
Equipment Rentals Gross Profit
|
$
|
501
|
|
|
$
|
157
|
|
|
$
|
658
|
|
Equipment Rentals Gross Margin
|
35.2
|
%
|
|
42.2
|
%
|
|
36.7
|
%
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
|
Change
|
Total gross margin
|
34.2%
|
|
35.9%
|
|
(170) bps
|
Equipment rentals
|
34.2%
|
|
36.7%
|
|
(250) bps
|
Sales of rental equipment
|
39.9%
|
|
34.9%
|
|
500 bps
|
Sales of new equipment
|
12.9%
|
|
12.9%
|
|
—
|
Contractor supplies sales
|
28.0%
|
|
29.2%
|
|
(120) bps
|
Service and other revenues
|
40.4%
|
|
47.7%
|
|
(730) bps
|
|
Three Months Ended March 31,
|
|||
|
2020
|
|
2019
|
Change
|
Selling, general and administrative ("SG&A") expense
|
$267
|
|
$280
|
(4.6)%
|
SG&A expense as a percentage of revenue
|
12.6%
|
|
13.2%
|
(60) bps
|
Merger related costs
|
—
|
|
1
|
(100.0)%
|
Restructuring charge
|
2
|
|
8
|
(75.0)%
|
Non-rental depreciation and amortization
|
100
|
|
104
|
(3.8)%
|
Interest expense, net
|
136
|
|
151
|
(9.9)%
|
Other income, net
|
(4)
|
|
(3)
|
33.3%
|
Provision for income taxes
|
53
|
|
45
|
17.8%
|
Effective tax rate
|
23.5%
|
|
20.5%
|
300 bps
|
ABL facility:
|
|
||
Borrowing capacity, net of letters of credit
|
$
|
2,508
|
|
Outstanding debt, net of debt issuance costs
|
1,179
|
|
|
Interest rate at March 31, 2020
|
2.2
|
%
|
|
Average month-end principal amount of debt outstanding (1)
|
1,097
|
|
|
Weighted-average interest rate on average debt outstanding
|
2.7
|
%
|
|
Maximum month-end principal amount of debt outstanding (1)
|
1,494
|
|
|
Accounts receivable securitization facility (2):
|
|
||
Borrowing capacity
|
62
|
|
|
Outstanding debt, net of debt issuance costs
|
795
|
|
|
Interest rate at March 31, 2020
|
2.1
|
%
|
|
Average month-end principal amount of debt outstanding
|
804
|
|
|
Weighted-average interest rate on average debt outstanding
|
2.4
|
%
|
|
Maximum month-end principal amount of debt outstanding
|
811
|
|
(1)
|
The average outstanding amount of debt under the ABL facility is less than the maximum outstanding amount primarily due to the use of proceeds from the issuance of 4 percent Senior Notes discussed in note 6 to the condensed consolidated financial statements to reduce borrowings under the facility. At the time of the 4 percent Senior Notes offering, we indicated our expectation that we would re-borrow an amount equal to the net proceeds from the offering, along with additional borrowings under the ABL facility, to redeem the $800 principal amount of our 5 1/2 percent Senior Notes due 2025 on or after July 15, 2020. Prior to redeeming any 5 1/2 percent Senior Notes due 2025, due primarily to the potential impact of COVID-19 on liquidity, we plan to assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. We currently expect to make a decision regarding the redemption of 5 1/2 percent Senior Notes due 2025 during the second half of 2020.
|
(2)
|
As discussed in note 6 to the condensed consolidated financial statements, in April 2020, we amended the accounts receivable securitization facility to adjust financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The adjustments to these tests are intended to make compliance with such tests more likely, and are not expected to materially impact our financial statements. The accounts receivable securitization facility expires on June 26, 2020, and we expect to renew the facility in the second quarter of 2020.
|
|
Corporate Rating
|
|
Outlook
|
Moody’s
|
Ba2
|
|
Stable
|
Standard & Poor’s
|
BB
|
|
Stable
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
644
|
|
|
$
|
667
|
|
Purchases of rental equipment
|
(208
|
)
|
|
(257
|
)
|
||
Purchases of non-rental equipment
|
(53
|
)
|
|
(42
|
)
|
||
Proceeds from sales of rental equipment
|
208
|
|
|
192
|
|
||
Proceeds from sales of non-rental equipment
|
9
|
|
|
8
|
|
||
Insurance proceeds from damaged equipment
|
6
|
|
|
7
|
|
||
Free cash flow
|
$
|
606
|
|
|
$
|
575
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
impact customer demand for equipment rentals, in particular in New York, Boston, Los Angeles, San Francisco and other locations where “shelter-in-place” and other end-market restrictions are in effect;
|
•
|
reduce the availability and productivity of our employees (including by requiring temporary branch closures in the event that positive tests for COVID-19 are identified);
|
•
|
cause us to experience an increase in costs as a result of our emergency and business continuity measures, delayed payments from our customers and uncollectable accounts;
|
•
|
impact our cost of, and ability to access, funds from financial institutions and capital markets on terms favorable to us, or at all;
|
•
|
impact our ability to complete previously announced strategic plans, including our stock repurchase program, on time, or at all; and
|
•
|
cause other unpredictable events.
|
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)
|
||||||
January 1, 2020 to January 31, 2020
|
52,493
|
|
(1)
|
$
|
152.37
|
|
|
—
|
|
|
—
|
|
|
February 1, 2020 to February 29, 2020
|
235,143
|
|
(1)
|
$
|
149.22
|
|
|
234,695
|
|
|
—
|
|
|
March 1, 2020 to March 31, 2020
|
2,408,057
|
|
(1)
|
$
|
96.64
|
|
|
2,315,342
|
|
|
—
|
|
|
Total
|
2,695,693
|
|
|
$
|
102.31
|
|
|
2,550,037
|
|
|
$
|
243,081,785
|
|
(1)
|
In January 2020, February 2020 and March 2020, 52,493, 448 and 92,715 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 January 28, 2020, our Board authorized a $500 million share repurchase program, which commenced in the first quarter of 2020. The table above reflects repurchases through March 18, 2020, when the program was paused due to the COVID-19 pandemic. We are currently unable to estimate when, or if, the program will be restarted, and we expect to provide an update at a future date.
|
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)
|
|
|
4
|
Indenture for the 4 percent Senior Notes due 2030, dated as of February 25, 2020, among United Rentals (North America), Inc., United Rentals Inc., each of United Rentals (North America), Inc.’s subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the form of note) (incorporated by reference to Exhibit 4.1 of the United Rentals, Inc. and United Rentals (North America), Inc. Current Report on Form 8-K filed on February 25, 2020)
|
|
|
10*
|
|
|
|
31(a)*
|
|
|
|
31(b)*
|
|
|
|
32(a)**
|
|
|
|
32(b)**
|
|
|
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
*
|
Filed herewith.
|
**
|
Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act.
|
|
|
UNITED RENTALS, INC.
|
||
|
|
|
|
|
Dated:
|
April 29, 2020
|
By:
|
|
/S/ ANDREW B. LIMOGES
|
|
|
|
|
Andrew B. Limoges Vice President, Controller and Principal Accounting Officer
|
|
|
|
||
|
|
UNITED RENTALS (NORTH AMERICA), INC.
|
||
|
|
|
|
|
Dated:
|
April 29, 2020
|
By:
|
|
/S/ ANDREW B. LIMOGES
|
|
|
|
|
Andrew B. Limoges Vice President, Controller and Principal Accounting Officer
|
|
|
|
|
|
Section 6.
|
Costs and Expenses.
|
Section 7.
|
Counterparts.
|
Section 8.
|
Headings.
|
Section 9.
|
Governing Laws.
|
ADMINISTRATIVE
|
THE BANK OF NOVA SCOTIA
|
PURCHASER AGENT:
|
THE BANK OF NOVA SCOTIA
|
BANK:
|
THE BANK OF NOVA SCOTIA
|
BANK:
|
PNC BANK, NATIONAL ASSOCIATION
|
PURCHASER AGENT:
|
MUFG BANK, LTD.
|
BANK:
|
MUFG BANK, LTD.
|
PURCHASER AGENT:
|
TRUIST BANK
|
BANK:
|
TRUIST BANK
|
PURCHASER AGENT:
|
THE TORONTO-DOMINION BANK
|
BANK:
|
THE TORONTO-DOMINION BANK
|
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 March 31, 2020;
|
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/ MATTHEW J. FLANNERY
|
Matthew J. Flannery
|
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 March 31, 2020;
|
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/ JESSICA T. GRAZIANO
|
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/ MATTHEW J. FLANNERY
|
Matthew J. Flannery
|
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/ JESSICA T. GRAZIANO
|
Jessica T. Graziano
|
Chief Financial Officer
|