Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-14387 | |
Entity Registrant Name | United Rentals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1522496 | |
Entity Address, Address Line One | 100 First Stamford Place | |
Entity Address, Address Line Two | Suite 700 | |
Entity Address, City or Town | Stamford | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06902 | |
City Area Code | 203 | |
Local Phone Number | 622-3131 | |
Title of 12(b) Security | Common Stock, $.01 par value, of United Rentals, Inc. | |
Trading Symbol | URI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 71,611,509 | |
Entity Central Index Key | 0001067701 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 101 | $ 144 |
Accounts receivable, net of allowance for doubtful accounts of $116 at March 31, 2022 and $112 at December 31, 2021 | 1,607 | 1,677 |
Inventory | 179 | 164 |
Prepaid expenses and other assets | 123 | 166 |
Total current assets | 2,010 | 2,151 |
Goodwill | 5,517 | 5,528 |
Other intangible assets, net | 583 | 615 |
Operating lease right-of-use assets | 792 | 784 |
Other long-term assets | 38 | 42 |
Total assets | 20,169 | 20,292 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Short-term debt and current maturities of long-term debt | 960 | 906 |
Accounts payable | 828 | 816 |
Accrued expenses and other liabilities | 809 | 881 |
Total current liabilities | 2,597 | 2,603 |
Long-term debt | 8,528 | 8,779 |
Deferred taxes | 2,188 | 2,154 |
Operating lease liabilities | 625 | 621 |
Other long-term liabilities | 147 | 144 |
Total liabilities | 14,085 | 14,301 |
Common stock—$0.01 par value, 500,000,000 shares authorized, 114,687,661 and 71,867,762 shares issued and outstanding, respectively, at March 31, 2022 and 114,434,075 and 72,420,566 shares issued and outstanding, respectively, at December 31, 2021 | 1 | 1 |
Additional paid-in capital | 2,535 | 2,567 |
Retained earnings | 7,918 | 7,551 |
Treasury stock at cost—42,819,899 and 42,013,509 shares at March 31, 2022 and December 31, 2021, respectively | (4,219) | (3,957) |
Accumulated other comprehensive loss | (151) | (171) |
Total stockholders’ equity | 6,084 | 5,991 |
Total liabilities and stockholders’ equity (deficit) | 20,169 | 20,292 |
Rental equipment, net | ||
ASSETS | ||
Equipment | 10,604 | 10,560 |
Property and equipment, net | ||
ASSETS | ||
Equipment | $ 625 | $ 612 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Allowance for doubtful accounts | $ 116 | $ 112 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 114,687,661 | 114,434,075 |
Common stock, shares outstanding (in shares) | 71,867,762 | 72,420,566 |
Treasury stock, shares (in shares) | 42,819,899 | 42,013,509 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Revenues | $ 2,524 | $ 2,057 |
Cost of revenues: | ||
Cost of equipment rentals, excluding depreciation | 906 | 715 |
Depreciation of rental equipment | 435 | 375 |
Total cost of revenues | 1,532 | 1,343 |
Gross profit | 992 | 714 |
Selling, general and administrative expenses | 323 | 250 |
Restructuring charge | 0 | 1 |
Non-rental depreciation and amortization | 97 | 91 |
Operating income (loss) | 572 | 372 |
Interest expense, net | 94 | 99 |
Other income, net | (5) | (2) |
Income before provision for income taxes | 483 | 275 |
Provision for income taxes | 116 | 72 |
Net income | $ 367 | $ 203 |
Basic earnings per share (in dollars per share) | $ 5.07 | $ 2.81 |
Diluted earnings per share (in dollars per share) | $ 5.05 | $ 2.80 |
Equipment rentals | ||
Revenues: | ||
Revenues | $ 2,175 | $ 1,667 |
Sales of rental equipment | ||
Revenues: | ||
Revenues | 211 | 267 |
Cost of revenues: | ||
Cost of goods and services sold | 95 | 164 |
Sales of new equipment | ||
Revenues: | ||
Revenues | 45 | 49 |
Cost of revenues: | ||
Cost of goods and services sold | 37 | 42 |
Contractor supplies sales | ||
Revenues: | ||
Revenues | 29 | 24 |
Cost of revenues: | ||
Cost of goods and services sold | 20 | 17 |
Service and other revenues | ||
Revenues: | ||
Revenues | 64 | 50 |
Cost of revenues: | ||
Cost of goods and services sold | $ 39 | $ 30 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 367 | $ 203 | |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustments | [1] | 17 | 5 |
Fixed price diesel swaps | 3 | 1 | |
Other comprehensive income | 20 | 6 | |
Comprehensive income (loss) | [1] | $ 387 | $ 209 |
[1] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income (loss) during 2022 or 2021. T here was no material tax impact related to the foreign currency translation adjustments. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to 2020. In 2020 and 2021, we identified cash in our foreign operations in excess of near-term working capital needs that could no longer be considered indefinitely reinvested. As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed. In 2021, we remitted $203 of cash from foreign operations (such amount represents the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs). We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. There were no material taxes associated with other comprehensive income (loss) during 2022 or 2021. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Reclassification from AOCI, current period, net of tax, attributable to parent | $ 0 | $ 0 | |
Other comprehensive income (loss), foreign currency translation adjustment, tax, portion attributable to parent | 0 | 0 | |
Foreign earnings repatriated | $ 203 | ||
Other comprehensive income (loss), tax, portion attributable to parent | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | [2] | |||
Balance (in shares) at Dec. 31, 2020 | 72 | [1] | 42 | |||||||
Balance at Dec. 31, 2020 | $ 1 | $ 2,482 | $ 6,165 | $ (3,957) | $ (146) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | $ 203 | 203 | ||||||||
Foreign currency translation adjustments | 5 | [3] | 5 | [4] | ||||||
Fixed price diesel swaps | 1 | 1 | ||||||||
Stock compensation expense, net (in shares) | [1] | 0 | ||||||||
Stock compensation expense, net | 21 | |||||||||
Shares repurchased and retired | (30) | |||||||||
Balance (in shares) at Mar. 31, 2021 | 72 | [1] | 42 | |||||||
Balance at Mar. 31, 2021 | $ 1 | 2,473 | 6,368 | $ (3,957) | (140) | |||||
Balance (in shares) at Dec. 31, 2021 | 72 | [1] | 42 | |||||||
Balance at Dec. 31, 2021 | 5,991 | $ 1 | 2,567 | 7,551 | $ (3,957) | (171) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 367 | 367 | ||||||||
Foreign currency translation adjustments | 17 | [3] | 17 | |||||||
Fixed price diesel swaps | 3 | 3 | ||||||||
Stock compensation expense, net (in shares) | 1 | |||||||||
Stock compensation expense, net | 24 | |||||||||
Shares repurchased and retired | (56) | |||||||||
Repurchase of common stock (in shares) | (1) | [1] | (1) | |||||||
Repurchase of common stock | $ (262) | |||||||||
Balance (in shares) at Mar. 31, 2022 | 72 | [1] | 43 | |||||||
Balance at Mar. 31, 2022 | $ 6,084 | $ 1 | $ 2,535 | $ 7,918 | $ (4,219) | $ (151) | ||||
[1] | Common stock outstanding increased by less than 1 million net shares during the year ended December 31, 2021. | |||||||||
[2] | The Accumulated Other Comprehensive Loss balance primarily reflects foreign currency translation adjustments | |||||||||
[3] | There were no material reclassifications from accumulated other comprehensive loss reflected in other comprehensive income (loss) during 2022 or 2021. T here was no material tax impact related to the foreign currency translation adjustments. We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to 2020. In 2020 and 2021, we identified cash in our foreign operations in excess of near-term working capital needs that could no longer be considered indefinitely reinvested. As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed. In 2021, we remitted $203 of cash from foreign operations (such amount represents the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs). We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. There were no material taxes associated with other comprehensive income (loss) during 2022 or 2021. | |||||||||
[4] | . |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) shares in Millions | 12 Months Ended |
Dec. 31, 2021shares | |
Common Stock | |
Change in common stock outstanding (in shares, approximately) | 1 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows From Operating Activities: | ||
Net income | $ 367 | $ 203 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 532 | 466 |
Amortization of deferred financing costs and original issue discounts | 3 | 3 |
Gain on sales of rental equipment | (116) | (103) |
Gain on sales of non-rental equipment | (2) | (1) |
Insurance proceeds from damaged equipment | (7) | (7) |
Stock compensation expense, net | 24 | 21 |
Restructuring charge | 0 | 1 |
Increase in deferred taxes | 37 | 3 |
Changes in operating assets and liabilities, net of amounts acquired: | ||
Decrease in accounts receivable | 76 | 63 |
(Increase) decrease in inventory | (13) | 11 |
Decrease in prepaid expenses and other assets | 61 | 23 |
Increase in accounts payable | 10 | 96 |
Decrease in accrued expenses and other liabilities | (86) | (21) |
Net cash provided by operating activities | 886 | 758 |
Cash Flows From Investing Activities: | ||
Purchases of rental equipment | (482) | (295) |
Purchases of non-rental equipment and intangible assets | (55) | (19) |
Proceeds from sales of rental equipment | 211 | 267 |
Proceeds from sales of non-rental equipment | 5 | 7 |
Insurance proceeds from damaged equipment | 7 | 7 |
Purchases of other companies, net of cash acquired | (77) | (1) |
Purchases of investments | (3) | 0 |
Net cash used in investing activities | (394) | (34) |
Cash Flows From Financing Activities: | ||
Proceeds from debt | 1,155 | 1,091 |
Payments of debt | (1,372) | (1,710) |
Common stock repurchased | (318) | (30) |
Net cash used in financing activities | (535) | (649) |
Effect of foreign exchange rates | 0 | 1 |
Net (decrease) increase in cash and cash equivalents | (43) | 76 |
Cash and cash equivalents at beginning of period | 144 | 202 |
Cash and cash equivalents at end of period | 101 | 278 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes, net | 10 | 6 |
Cash paid for interest | $ 149 | $ 167 |
Organization, Description of Bu
Organization, Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Basis of Presentation | Organization, Description of Business and Basis of Presentation United Rentals, Inc. (“Holdings,” “URI” or the “Company”) is principally a holding company and conducts its operations primarily through its wholly owned subsidiary, United Rentals (North America), Inc. (“URNA”), and subsidiaries of URNA. Holdings’ primary asset is its sole ownership of all issued and outstanding shares of common stock of URNA. URNA’s various credit agreements and debt instruments place restrictions on its ability to transfer funds to its shareholder. We rent equipment to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand. In addition to renting equipment, we sell new and used rental equipment, as well as related contractor supplies, parts and service. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the accounting policies described in our annual report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the 2021 Form 10-K. In our opinion, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of financial condition, operating results and cash flows for the interim periods presented have been made. Interim results of operations are not necessarily indicative of the results of the full year. COVID-19 The novel coronavirus (“COVID-19”) was first identified in people in late 2019. COVID-19 spread rapidly throughout the world and, in March 2020, the World Health Organization characterized COVID-19 as a pandemic. COVID-19 is a pandemic of respiratory disease spreading from person-to-person that poses a serious public health risk. The COVID-19 pandemic has significantly disrupted supply chains and businesses around the world. Uncertainty remains regarding the ongoing impact of existing and emerging variant strains of COVID-19 on the operations and financial position of United Rentals, and on the global economy. Uncertainty also remains regarding the length of time it will take for the COVID-19 pandemic to ultimately subside, which will be impacted by the effectiveness of vaccines against COVID-19 (including against emerging variant strains), and by measures that may in the future be implemented to protect public health. The health and safety of our employees and customers remains our top priority, and we also implemented a detailed COVID-19 response plan, which is explained in more detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and which we believe helped mitigate the impact of COVID-19 on our results. We began to experience a decline in revenues in March 2020, when rental volume declined in response to shelter-in-place orders and other market restrictions. The volume declines were more pronounced in 2020 than 2021, and we have seen recent evidence of recovery across our construction and industrial markets, as well as encouraging gains in end-market indicators, as reflected in our 2022 forecast and performance through March 31, 2022. COVID-19 is discussed in more detail throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue Recognition Accounting Standards We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard. Three Months Ended March 31, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 1,797 $ — $ 1,797 $ 1,405 $ — $ 1,405 Re-rent revenue 49 — 49 32 — 32 Ancillary and other rental revenues: Delivery and pick-up — 157 157 — 116 116 Other 124 48 172 81 33 114 Total ancillary and other rental revenues 124 205 329 81 149 230 Total equipment rentals 1,970 205 2,175 1,518 149 1,667 Sales of rental equipment — 211 211 — 267 267 Sales of new equipment — 45 45 — 49 49 Contractor supplies sales — 29 29 — 24 24 Service and other revenues — 64 64 — 50 50 Total revenues $ 1,970 $ 554 $ 2,524 $ 1,518 $ 539 $ 2,057 Revenues by reportable segment are presented in note 4 of the condensed consolidated financial statements, using the revenue captions reflected in our condensed consolidated statements of operations. The majority of our revenue is recognized in our general rentals segment and in the U.S. (for the three months ended March 31, 2022, 75 percent and 90 percent, respectively). We believe that the disaggregation of our revenue from contracts to customers as reflected above, coupled with the further discussion below and the reportable segment disclosures in note 4, depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 71 percent of total revenues for the three months ended March 31, 2022) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $88 and $83 as of March 31, 2022 and December 31, 2021, respectively. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment. Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 78 percent of our total revenues for the three months ended March 31, 2022). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address receivables arising from revenues from both Topic 606 and Topic 842. Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues for the three months ended March 31, 2022, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent of total receivables at March 31, 2022 and December 31, 2021. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowances for doubtful accounts reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for doubtful accounts. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 78 percent of our total revenues for the three months ended March 31, 2022, and these revenues account for corresponding portions of the $1.607 billion of net accounts receivable and the associated allowance for doubtful accounts of $116 reported on our condensed consolidated balance sheet as of March 31, 2022). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Beginning balance $ 112 $ 108 Charged to costs and expenses (1) 1 — Charged to revenue (2) 8 4 Deductions and other (3) (5) (8) Ending balance $ 116 $ 104 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity. We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the three months ended March 31, 2022 or 2021 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2022 and 2021 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2022. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: • 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. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On May 25, 2021, we completed the acquisition of General Finance. General Finance previously operated as Pac-Van and Container King in the U.S. and Canada, and as Royal Wolf in Australia and New Zealand, and was a leading provider of mobile storage and modular office space. Its network served diverse end-markets, including construction, commercial, industrial, retail, transportation, petrochemical, consumer, natural resources, governmental and education. As of March 31, 2021, General Finance’s rental fleet consisted of approximately 100,000 units at an original cost of approximately $650. For the 12 months ended December 31, 2020, General Finance had revenues of $342 (such amount represents General Finance’s historic revenue presented in accordance with our revenue mapping). The acquisition: • Complemented our leading positions in general construction and industrial rentals and specialty rentals, which further differentiated us through our ability to deliver value as a one-stop-shop for customers; • Created immediate cross-sell opportunities, and allowed us to introduce mobile storage and modular office solutions in service areas that previously were not served by General Finance; and • Provided entry into Australia and New Zealand, with an established platform run by a seasoned management team, and with a strong growth strategy already in place. The aggregate consideration paid to acquire General Finance was $1.032 billion. The acquisition and related fees and expenses were funded through available cash and drawings on our senior secured asset-based revolving credit facility (“ABL facility”). The following table summarizes the fair values of the assets acquired and liabilities assumed. The purchase price allocations for these assets and liabilities are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period, although we do not expect material future changes. Cash and cash equivalents $ 13 Accounts receivable (1) 44 Inventory 36 Rental equipment 686 Property and equipment 42 Intangibles (2) 123 Operating lease right-of-use assets 59 Other assets 23 Total identifiable assets acquired 1,026 Current liabilities (93) Deferred taxes (120) Operating lease liabilities (44) Total liabilities assumed (257) Net identifiable assets acquired 769 Goodwill (3) 263 Net assets acquired $ 1,032 (1) The fair value of accounts receivables acquired was $44, and the gross contractual amount was $50. We estimated that $6 would be uncollectible. (2) The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our preliminary purchase accounting assessments: Fair value Life (years) Customer relationships $ 116 7 Trade names and associated trademarks 7 5 Total $ 123 (3) All of the goodwill was assigned to our specialty segment. We have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, although we do not expect material future changes. Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of General Finance's going-concern value, the value of General Finance's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $28 of goodwill is expected to be deductible for income tax purposes. We incurred acquisition-related costs associated with the General Finance acquisition, however no such costs were recognized during the three months ended March 31, 2022 or 2021. It is not practicable to reasonably estimate the amounts of revenue and earnings of General Finance since the acquisition date, primarily due to the movement of fleet between URI locations and the acquired General Finance locations, as well as our corporate structure and the allocation of corporate costs. Pro forma financial information The pro forma information below gives effect to the General Finance acquisition as if it had been completed on January 1, 2020 (the "pro forma acquisition date”). The pro forma information is not necessarily indicative of our results had the acquisition been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information reflects General Finance’s historic revenue presented in accordance with our revenue mapping, does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, and also does not reflect additional revenue opportunities following the acquisition. The pro forma information includes adjustments to record the acquired assets and liabilities of General Finance at their respective fair values based on available information and to give effect to the financing for the acquisition. The pro forma adjustments reflected in the table below are subject to change as additional analysis is performed. The purchase price allocations for the assets acquired and liabilities assumed are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period, although we do not expect material future changes. Increases or decreases in the estimated fair values of the net assets acquired may impact our statements of income in future periods. We expect that the values assigned to the assets acquired and liabilities assumed will be finalized during the one-year measurement period following the acquisition date. The table below presents unaudited pro forma consolidated income statement information as if General Finance had been included in our consolidated results for the entire period reflected: Three Months Ended March 31, 2021 United Rentals historic revenues $ 2,057 General Finance historic revenues 89 Pro forma revenues 2,146 United Rentals historic pretax income 275 General Finance historic pretax income (loss) 15 Combined pretax income 290 Pro forma adjustments to combined pretax income: Impact of fair value mark-ups/useful life changes on depreciation (1) (7) Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2) (4) Intangible asset amortization (3) (6) Interest expense (4) (3) Elimination of historic interest (5) 5 Elimination of changes in the valuation of bifurcated derivatives in convertible notes (6) (4) Pro forma pretax income $ 271 ________________ (1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the General Finance acquisition. (2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the General Finance acquisition. (3) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets. (4) As discussed above, we funded the General Finance acquisition using drawings on our ABL facility. Interest expense was adjusted to reflect interest on the ABL facility borrowings. (5) Historic interest on debt that is not part of the combined entity was eliminated. (6) General Finance historically recognized changes in the valuation of bifurcated derivatives in convertible notes in its statements of operations. These historic changes were eliminated because the bifurcated derivatives are not part of the combined entity. During 2022, we completed a series of acquisitions which were not significant individually or in the aggregate. See the condensed consolidated statements of cash flows for the total cash outflow for purchases of other companies, net of cash acquired. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our reportable segments are i) general rentals and ii) specialty. For general rentals, the divisions discussed below, which are our operating segments, are aggregated into the reportable segment. The specialty segment is a single division that is both an operating segment and a reportable segment. We believe that the divisions that are aggregated into our reportable segments have similar economic characteristics, as each division is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our divisions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit. The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of four geographic divisions—Central, Northeast, Southeast and West—and operates throughout the United States and Canada. The specialty segment, which, as noted above, is a single division that is both an operating segment and a reportable segment, includes the rental of specialty construction products such as i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and iv) mobile storage equipment and modular office space. The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a limited presence in Europe, Australia and New Zealand. The following tables set forth financial information by segment. General Specialty Total Three Months Ended March 31, 2022 Equipment rentals $ 1,593 $ 582 $ 2,175 Sales of rental equipment 184 27 211 Sales of new equipment 29 16 45 Contractor supplies sales 18 11 29 Service and other revenues 58 6 64 Total revenue 1,882 642 2,524 Depreciation and amortization expense 422 110 532 Equipment rentals gross profit 575 259 834 Capital expenditures 394 143 537 Three Months Ended March 31, 2021 Equipment rentals $ 1,273 $ 394 $ 1,667 Sales of rental equipment 247 20 267 Sales of new equipment 42 7 49 Contractor supplies sales 16 8 24 Service and other revenues 44 6 50 Total revenue 1,622 435 2,057 Depreciation and amortization expense 380 86 466 Equipment rentals gross profit 411 166 577 Capital expenditures 284 30 314 March 31, December 31, Total reportable segment assets General rentals $ 15,947 $ 16,087 Specialty 4,222 4,205 Total assets $ 20,169 $ 20,292 Equipment rentals gross profit is the primary measure management reviews to make operating decisions and assess segment performance. The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes: Three Months Ended March 31, 2022 2021 Total equipment rentals gross profit $ 834 $ 577 Gross profit from other lines of business 158 137 Selling, general and administrative expenses (323) (250) Restructuring charge (1) — (1) Non-rental depreciation and amortization (97) (91) Interest expense, net (94) (99) Other income, net 5 2 Income before provision for income taxes $ 483 $ 275 ___________________ (1) Primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges" below. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of March 31, 2022 and December 31, 2021, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include: 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. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our condensed consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The fair values of our ABL, accounts receivable securitization and term loan facilities and finance leases approximated their book values as of March 31, 2022 and December 31, 2021. The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2022 and December 31, 2021 have been calculated based upon available market information, and were as follows: March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Senior notes $ 6,717 $ 6,672 $ 6,716 $ 7,023 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | DebtDebt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following: March 31, 2022 December 31, 2021 Accounts Receivable Securitization Facility expiring 2022 (1) (2) $ 900 $ 843 $3.75 billion ABL Facility expiring 2024 (1) 776 1,029 Term loan facility expiring 2025 (1) 960 962 5 1 / 2 percent Senior Notes due 2027 (3) 995 995 3 7 / 8 percent Senior Secured Notes due 2027 743 743 4 7 / 8 percent Senior Notes due 2028 (4) 1,661 1,660 5 1 / 4 percent Senior Notes due 2030 743 743 4 percent Senior Notes due 2030 743 743 3 7 / 8 percent Senior Notes due 2031 1,089 1,089 3 3 / 4 percent Senior Notes due 2032 743 743 Finance leases 135 135 Total debt 9,488 9,685 Less short-term portion (5) (960) (906) Total long-term debt $ 8,528 $ 8,779 ___________________ (1) The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2022. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation. ABL facility Accounts receivable securitization facility Term loan facility Borrowing capacity, net of letters of credit $ 2,905 $ — $ — Letters of credit 64 Interest rate at March 31, 2022 1.9 % 1.2 % 2.2 % Average month-end debt outstanding 815 874 967 Weighted-average interest rate on average debt outstanding 1.7 % 1.0 % 2.0 % Maximum month-end debt outstanding 891 900 968 (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, 2022, there were $1.050 billion of receivables, net of applicable reserves and other deductions, in the collateral pool. (3) In April 2022, URNA gave notice of its intention to redeem $500 principal amount of its 5 1 / 2 percent Senior Notes. The redemption is expected to take place in May 2022 at a redemption price of 102.75 percent, plus accrued and unpaid interest. The redemption will be funded using cash and borrowings under the ABL facility. Upon redemption, we expect to recognize a loss reflecting the difference between the net carrying amount and the total purchase price of the redeemed notes. (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. As of March 31, 2022, the total above is comprised of two separate 4 7 / 8 percent Senior Notes, one with a book value of $1.657 billion and one with a book value of $4. (5) As of March 31, 2022, our short-term debt primarily reflected $900 of borrowings under our accounts receivable securitization facility. Loan Covenants and Compliance As of March 31, 2022, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization and term loan facilities and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. |
Legal and Regulatory Matters
Legal and Regulatory Matters | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | Legal and Regulatory MattersWe are subject to a number of claims and proceedings that generally arise in the ordinary course of our business. These matters include, but are not limited to, general liability claims (including personal injury, property and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations, contract and real estate matters, and other general business litigation. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals for matters where we have established them, we currently believe that any liabilities ultimately resulting from such claims and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (shares in thousands): Three Months Ended March 31, 2022 2021 Numerator: Net income available to common stockholders 367 203 Denominator: Denominator for basic earnings per share—weighted-average common shares 72,372 72,338 Effect of dilutive securities: Employee stock options 4 6 Restricted stock units 308 330 Denominator for diluted earnings per share—adjusted weighted-average common shares 72,684 72,674 Basic earnings per share $ 5.07 $ 2.81 Diluted earnings per share $ 5.05 $ 2.80 |
Organization, Description of _2
Organization, Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Lease revenues (Topic 842) | Lease revenues (Topic 842) The accounting for the types of revenue that are accounted for under Topic 842 is discussed below. Owned equipment rentals represent our most significant revenue type (they accounted for 71 percent of total revenues for the three months ended March 31, 2022) and are governed by our standard rental contract. We account for such rentals as operating leases. The lease terms are included in our contracts, and the determination of whether our contracts contain leases generally does not require significant assumptions or judgments. Our lease revenues do not include material amounts of variable payments. Owned equipment rentals: Owned equipment rentals represent revenues from renting equipment that we own. We do not generally provide an option for the lessee to purchase the rented equipment at the end of the lease, and do not generate material revenue from sales of equipment under such options. We recognize revenues from renting equipment on a straight-line basis. Our rental contract periods are hourly, daily, weekly or monthly. By way of example, if a customer were to rent a piece of equipment and the daily, weekly and monthly rental rates for that particular piece were (in actual dollars) $100, $300 and $900, respectively, we would recognize revenue of $32.14 per day. The daily rate for recognition purposes is calculated by dividing the monthly rate of $900 by the monthly term of 28 days. This daily rate assumes that the equipment will be on rent for the full 28 days, as we are unsure of when the customer will return the equipment and therefore unsure of which rental contract period will apply. As part of this straight-line methodology, when the equipment is returned, we recognize as incremental revenue the excess, if any, between the amount the customer is contractually required to pay, which is based on the rental contract period applicable to the actual number of days the equipment was out on rent, over the cumulative amount of revenue recognized to date. In any given accounting period, we will have customers return equipment and be contractually required to pay us more than the cumulative amount of revenue recognized to date under the straight-line methodology. For instance, continuing the above example, if the customer rented the above piece of equipment on December 29 and returned it at the close of business on January 1, we would recognize incremental revenue on January 1 of $171.44 (in actual dollars, representing the difference between the amount the customer is contractually required to pay, or $300 at the weekly rate, and the cumulative amount recognized to date on a straight-line basis, or $128.56, which represents four days at $32.14 per day). We record amounts billed to customers in excess of recognizable revenue as deferred revenue on our balance sheet. We had deferred revenue (associated with both Topic 842 and Topic 606) of $88 and $83 as of March 31, 2022 and December 31, 2021, respectively. As noted above, we are unsure of when the customer will return rented equipment. As such, we do not know how much the customer will owe us upon return of the equipment and cannot provide a maturity analysis of future lease payments. Our equipment is generally rented for short periods of time. Lessees do not provide residual value guarantees on rented equipment. We expect to derive significant future benefits from our equipment following the end of the rental term. Our rentals are generally short-term in nature, and our equipment is typically rented for the majority of the time that we own it. We additionally recognize revenue from sales of rental equipment when we dispose of the equipment. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. “Other” equipment rental revenue is primarily comprised of 1) Rental Protection Plan (or "RPP") revenue associated with the damage waiver customers can purchase when they rent our equipment to protect against potential loss or damage, 2) environmental charges associated with the rental of equipment, 3) charges for rented equipment that is damaged by our customers and 4) charges for setup and other services performed on rented equipment. |
Revenues from contracts with customers (Topic 606) | Revenues from contracts with customers (Topic 606) The accounting for the types of revenue that are accounted for under Topic 606 is discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Delivery and pick-up: Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. “Other” equipment rental revenue is primarily comprised of revenues associated with the consumption of fuel by our customers which are recognized when the equipment is returned by the customer (and consumption, if any, can be measured). Sales of rental equipment, new equipment and contractor supplies are recognized at the time of delivery to, or pick-up by, the customer and when collectibility is probable. Service and other revenues primarily represent revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). Service revenue is recognized as the services are performed. Receivables and contract assets and liabilities As reflected above, most of our equipment rental revenue is accounted for under Topic 842 (such revenue represented 78 percent of our total revenues for the three months ended March 31, 2022). The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address receivables arising from revenues from both Topic 606 and Topic 842. Concentration of credit risk with respect to our receivables is limited because a large number of geographically diverse customers makes up our customer base. Our largest customer accounted for less than one percent of total revenues for the three months ended March 31, 2022, and for each of the last three full years. Our customer with the largest receivable balance represented approximately one percent of total receivables at March 31, 2022 and December 31, 2021. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Our allowances for doubtful accounts reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See the table below for a rollforward of our allowance for doubtful accounts. The measurement of expected credit losses is based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. Trade receivables are the only material financial asset we have that is subject to the requirement to measure expected credit losses as noted above, as this requirement does not apply to receivables arising from operating lease revenues. Substantially all of our non-lease trade receivables are due in one year or less. As discussed above, most of our equipment rental revenue is accounted for as lease revenue (such revenue represented 78 percent of our total revenues for the three months ended March 31, 2022, and these revenues account for corresponding portions of the $1.607 billion of net accounts receivable and the associated allowance for doubtful accounts of $116 reported on our condensed consolidated balance sheet as of March 31, 2022). As discussed above, most of our equipment rental revenue is accounted for under Topic 842. The customers that are responsible for the remaining revenue that is accounted for under Topic 606 are generally the same customers that rent our equipment. We manage credit risk associated with our accounts receivables at the customer level. The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Beginning balance $ 112 $ 108 Charged to costs and expenses (1) 1 — Charged to revenue (2) 8 4 Deductions and other (3) (5) (8) Ending balance $ 116 $ 104 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity. We do not have material contract assets, or impairment losses associated therewith, or material contract liabilities, associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenue during the three months ended March 31, 2022 or 2021 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amounts of such revenue recognized during the three months ended March 31, 2022 and 2021 were not material. We also do not expect to recognize material revenue in the future related to performance obligations that were unsatisfied (or partially unsatisfied) as of March 31, 2022. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments, primarily for the following reasons: • 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. Our revenues accounted for under Topic 842 also generally do not require significant estimates or judgments. We monitor and review our estimated standalone selling prices on a regular basis. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of changes in accounting principles | In the following table, revenue is summarized by type and by the applicable accounting standard. Three Months Ended March 31, 2022 2021 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 1,797 $ — $ 1,797 $ 1,405 $ — $ 1,405 Re-rent revenue 49 — 49 32 — 32 Ancillary and other rental revenues: Delivery and pick-up — 157 157 — 116 116 Other 124 48 172 81 33 114 Total ancillary and other rental revenues 124 205 329 81 149 230 Total equipment rentals 1,970 205 2,175 1,518 149 1,667 Sales of rental equipment — 211 211 — 267 267 Sales of new equipment — 45 45 — 49 49 Contractor supplies sales — 29 29 — 24 24 Service and other revenues — 64 64 — 50 50 Total revenues $ 1,970 $ 554 $ 2,524 $ 1,518 $ 539 $ 2,057 |
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure | The rollforward of our allowance for doubtful accounts (in total, and associated with revenues arising from both Topic 606 and Topic 842) is shown below. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Beginning balance $ 112 $ 108 Charged to costs and expenses (1) 1 — Charged to revenue (2) 8 4 Deductions and other (3) (5) (8) Ending balance $ 116 $ 104 _________________ (1) Reflects bad debt expenses recognized within selling, general and administrative expenses (associated with Topic 606 revenues). (2) Primarily reflects doubtful accounts associated with lease revenues that were recognized as a reduction to equipment rentals revenue (primarily associated with Topic 842 revenues). (3) Primarily represents write-offs of accounts, net of immaterial recoveries and other activity. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed. The purchase price allocations for these assets and liabilities are based on preliminary valuations and are subject to change as we obtain additional information during the acquisition measurement period, although we do not expect material future changes. Cash and cash equivalents $ 13 Accounts receivable (1) 44 Inventory 36 Rental equipment 686 Property and equipment 42 Intangibles (2) 123 Operating lease right-of-use assets 59 Other assets 23 Total identifiable assets acquired 1,026 Current liabilities (93) Deferred taxes (120) Operating lease liabilities (44) Total liabilities assumed (257) Net identifiable assets acquired 769 Goodwill (3) 263 Net assets acquired $ 1,032 (1) The fair value of accounts receivables acquired was $44, and the gross contractual amount was $50. We estimated that $6 would be uncollectible. (2) The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our preliminary purchase accounting assessments: Fair value Life (years) Customer relationships $ 116 7 Trade names and associated trademarks 7 5 Total $ 123 (3) All of the goodwill was assigned to our specialty segment. We have not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed, although we do not expect material future changes. Once finalized, we expect that the goodwill that results from the acquisition will be primarily reflective of General Finance's going-concern value, the value of General Finance's assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies that we expect to achieve that would not be available to other market participants. $28 of goodwill is expected to be deductible for income tax purposes. |
Finite-lived and indefinite-lived intangible assets acquired as part of business combination | The following table reflects the fair values and useful lives of the acquired intangible assets identified based on our preliminary purchase accounting assessments: Fair value Life (years) Customer relationships $ 116 7 Trade names and associated trademarks 7 5 Total $ 123 |
Summary of business acquisition, pro forma information | The table below presents unaudited pro forma consolidated income statement information as if General Finance had been included in our consolidated results for the entire period reflected: Three Months Ended March 31, 2021 United Rentals historic revenues $ 2,057 General Finance historic revenues 89 Pro forma revenues 2,146 United Rentals historic pretax income 275 General Finance historic pretax income (loss) 15 Combined pretax income 290 Pro forma adjustments to combined pretax income: Impact of fair value mark-ups/useful life changes on depreciation (1) (7) Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales (2) (4) Intangible asset amortization (3) (6) Interest expense (4) (3) Elimination of historic interest (5) 5 Elimination of changes in the valuation of bifurcated derivatives in convertible notes (6) (4) Pro forma pretax income $ 271 ________________ (1) Depreciation of rental equipment and non-rental depreciation were adjusted for the fair value mark-ups, and the changes in useful lives and salvage values, of the equipment acquired in the General Finance acquisition. (2) Cost of rental equipment sales was adjusted for the fair value mark-ups of rental equipment acquired in the General Finance acquisition. (3) Intangible asset amortization was adjusted to include amortization of the acquired intangible assets. (4) As discussed above, we funded the General Finance acquisition using drawings on our ABL facility. Interest expense was adjusted to reflect interest on the ABL facility borrowings. (5) Historic interest on debt that is not part of the combined entity was eliminated. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Financial information by segment | The following tables set forth financial information by segment. General Specialty Total Three Months Ended March 31, 2022 Equipment rentals $ 1,593 $ 582 $ 2,175 Sales of rental equipment 184 27 211 Sales of new equipment 29 16 45 Contractor supplies sales 18 11 29 Service and other revenues 58 6 64 Total revenue 1,882 642 2,524 Depreciation and amortization expense 422 110 532 Equipment rentals gross profit 575 259 834 Capital expenditures 394 143 537 Three Months Ended March 31, 2021 Equipment rentals $ 1,273 $ 394 $ 1,667 Sales of rental equipment 247 20 267 Sales of new equipment 42 7 49 Contractor supplies sales 16 8 24 Service and other revenues 44 6 50 Total revenue 1,622 435 2,057 Depreciation and amortization expense 380 86 466 Equipment rentals gross profit 411 166 577 Capital expenditures 284 30 314 March 31, December 31, Total reportable segment assets General rentals $ 15,947 $ 16,087 Specialty 4,222 4,205 Total assets $ 20,169 $ 20,292 |
Reconciliation to equipment rentals gross profit | The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes: Three Months Ended March 31, 2022 2021 Total equipment rentals gross profit $ 834 $ 577 Gross profit from other lines of business 158 137 Selling, general and administrative expenses (323) (250) Restructuring charge (1) — (1) Non-rental depreciation and amortization (97) (91) Interest expense, net (94) (99) Other income, net 5 2 Income before provision for income taxes $ 483 $ 275 ___________________ (1) Primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges" below. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | The estimated fair values of our other financial instruments, all of which are categorized in Level 1 of the fair value hierarchy, as of March 31, 2022 and December 31, 2021 have been calculated based upon available market information, and were as follows: March 31, 2022 December 31, 2021 Carrying Fair Carrying Fair Senior notes $ 6,717 $ 6,672 $ 6,716 $ 7,023 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following: March 31, 2022 December 31, 2021 Accounts Receivable Securitization Facility expiring 2022 (1) (2) $ 900 $ 843 $3.75 billion ABL Facility expiring 2024 (1) 776 1,029 Term loan facility expiring 2025 (1) 960 962 5 1 / 2 percent Senior Notes due 2027 (3) 995 995 3 7 / 8 percent Senior Secured Notes due 2027 743 743 4 7 / 8 percent Senior Notes due 2028 (4) 1,661 1,660 5 1 / 4 percent Senior Notes due 2030 743 743 4 percent Senior Notes due 2030 743 743 3 7 / 8 percent Senior Notes due 2031 1,089 1,089 3 3 / 4 percent Senior Notes due 2032 743 743 Finance leases 135 135 Total debt 9,488 9,685 Less short-term portion (5) (960) (906) Total long-term debt $ 8,528 $ 8,779 ___________________ (1) The table below presents financial information associated with our variable rate indebtedness as of and for the three months ended March 31, 2022. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to repay a portion of the principal obligation. ABL facility Accounts receivable securitization facility Term loan facility Borrowing capacity, net of letters of credit $ 2,905 $ — $ — Letters of credit 64 Interest rate at March 31, 2022 1.9 % 1.2 % 2.2 % Average month-end debt outstanding 815 874 967 Weighted-average interest rate on average debt outstanding 1.7 % 1.0 % 2.0 % Maximum month-end debt outstanding 891 900 968 (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, 2022, there were $1.050 billion of receivables, net of applicable reserves and other deductions, in the collateral pool. (3) In April 2022, URNA gave notice of its intention to redeem $500 principal amount of its 5 1 / 2 percent Senior Notes. The redemption is expected to take place in May 2022 at a redemption price of 102.75 percent, plus accrued and unpaid interest. The redemption will be funded using cash and borrowings under the ABL facility. Upon redemption, we expect to recognize a loss reflecting the difference between the net carrying amount and the total purchase price of the redeemed notes. (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. As of March 31, 2022, the total above is comprised of two separate 4 7 / 8 percent Senior Notes, one with a book value of $1.657 billion and one with a book value of $4. (5) As of March 31, 2022, our short-term debt primarily reflected $900 of borrowings under our accounts receivable securitization facility. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted earnings per share (shares in thousands): Three Months Ended March 31, 2022 2021 Numerator: Net income available to common stockholders 367 203 Denominator: Denominator for basic earnings per share—weighted-average common shares 72,372 72,338 Effect of dilutive securities: Employee stock options 4 6 Restricted stock units 308 330 Denominator for diluted earnings per share—adjusted weighted-average common shares 72,684 72,674 Basic earnings per share $ 5.07 $ 2.81 Diluted earnings per share $ 5.05 $ 2.80 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Revenues, Topic 842 | $ 1,970 | $ 1,518 |
Revenues, Topic 606 | 554 | 539 |
Revenues, Total | 2,524 | 2,057 |
Equipment rentals | ||
Revenues: | ||
Revenues, Topic 842 | 1,970 | 1,518 |
Revenues, Topic 606 | 205 | 149 |
Revenues, Total | 2,175 | 1,667 |
Owned equipment rentals | ||
Revenues: | ||
Owned equipment rentals, Topic 842 | 1,797 | 1,405 |
Revenues, Total | 1,797 | 1,405 |
Re-rent revenue | ||
Revenues: | ||
Re-rent revenue, Topic 842 | 49 | 32 |
Revenues, Total | 49 | 32 |
Delivery and pick-up | ||
Revenues: | ||
Revenues, Topic 606 | 157 | 116 |
Revenues, Total | 157 | 116 |
Other | ||
Revenues: | ||
Other, Topic 842 | 124 | 81 |
Revenues, Topic 606 | 48 | 33 |
Revenues, Total | 172 | 114 |
Total ancillary and other rental revenues | ||
Revenues: | ||
Revenues, Topic 842 | 124 | 81 |
Revenues, Topic 606 | 205 | 149 |
Revenues, Total | 329 | 230 |
Sales of rental equipment | ||
Revenues: | ||
Revenues, Topic 606 | 211 | 267 |
Revenues, Total | 211 | 267 |
Sales of new equipment | ||
Revenues: | ||
Revenues, Topic 606 | 45 | 49 |
Revenues, Total | 45 | 49 |
Contractor supplies sales | ||
Revenues: | ||
Revenues, Topic 606 | 29 | 24 |
Revenues, Total | 29 | 24 |
Service and other revenues | ||
Revenues: | ||
Revenues, Topic 606 | 64 | 50 |
Revenues, Total | $ 64 | $ 50 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Contract with customer, liability | $ 88 | $ 83 | |
Accounts receivable, net | 1,607 | 1,677 | |
Allowance for doubtful accounts | 116 | $ 112 | |
Contract with customer, asset | 0 | ||
Revenue recognized | 0 | $ 0 | |
Contract with customer, performance obligation satisfied in previous period | $ 0 | $ 0 | |
Revenues | Largest customer | Customer concentration risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 1.00% | ||
Accounts Receivable | Largest customer | Customer concentration risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 1.00% | 1.00% | |
Owned equipment rentals | Revenues | Product concentration risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 71.00% | ||
Equipment Rental | Revenues | Product concentration risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 78.00% | ||
US | Revenues | Geographic Concentration Risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 90.00% | ||
General rentals | Revenues | Product concentration risk | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 75.00% |
Revenue Recognition (Allowance
Revenue Recognition (Allowance for Doubtful Accounts Rollforward) (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 112 | $ 108 |
Charged to costs and expenses | 1 | 0 |
Charged to revenue | 8 | 4 |
Deductions | (5) | (8) |
Ending balance | $ 116 | $ 104 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) rental_unit in Thousands, $ in Millions | May 25, 2021USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($)rental_unit | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | ||||
Revenues | $ 2,524 | $ 2,057 | ||
General Finance Corporation | ||||
Business Acquisition [Line Items] | ||||
Aggregate consideration paid | $ 1,032 | |||
General Finance Corporation | ||||
Business Acquisition [Line Items] | ||||
Rental fleet, number of units (approximately) | rental_unit | 100 | |||
Property subject to or available for operating lease, gross | $ 650 | |||
Revenues | $ 89 | $ 342 |
Acquisitions (Assets Acquired a
Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | May 25, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,517 | $ 5,528 | |
General Finance Corporation | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 13 | ||
Accounts receivable | 44 | ||
Inventory | 36 | ||
Rental equipment | 686 | ||
Property and equipment | 42 | ||
Intangibles | 123 | ||
Operating lease right-of-use assets | 59 | ||
Other assets | 23 | ||
Total identifiable assets acquired | 1,026 | ||
Current liabilities | (93) | ||
Deferred taxes | (120) | ||
Operating lease liabilities | (44) | ||
Total liabilities assumed | (257) | ||
Net identifiable assets acquired | 769 | ||
Goodwill | 263 | ||
Net assets acquired | 1,032 | ||
Gross contractual amount | 50 | ||
Estimated amount uncollectible | 6 | ||
Goodwill, amount expected to be deductible for income tax purposes | 28 | ||
General Finance Corporation | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangibles | 116 | ||
General Finance Corporation | Trade names and associated trademarks | |||
Business Acquisition [Line Items] | |||
Intangibles | $ 7 |
Acquisitions (Other Intangible
Acquisitions (Other Intangible Assets Associated with Acquisition) (Details) - General Finance Corporation $ in Millions | May 25, 2021USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 123 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 116 |
Life (years) | 7 years |
Trade names and associated trademarks | |
Finite-Lived Intangible Assets [Line Items] | |
Fair value | $ 7 |
Life (years) | 5 years |
Acquisitions (Pro Forma Informa
Acquisitions (Pro Forma Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Revenues | $ 2,524 | $ 2,057 | |
Pro forma revenues | 2,146 | ||
Pretax income | $ 483 | 275 | |
Pro forma pretax income | 271 | ||
Impact of fair value mark-ups/useful life changes on depreciation | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | (7) | ||
Impact of the fair value mark-up of acquired fleet on cost of rental equipment sales | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | (4) | ||
Intangible asset amortization | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | (6) | ||
Interest expense | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | (3) | ||
Elimination of historic interest | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | 5 | ||
Elimination of changes in the valuation of bifurcated derivatives in convertible notes | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | (4) | ||
United Rentals and General Finance Corporation | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Pretax income | 290 | ||
General Finance Corporation | |||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Revenues | 89 | $ 342 | |
Pretax income | $ 15 |
Segment Information (Financial
Segment Information (Financial Information by Segment) (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)numberOfDivisions | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Reporting Information | |||
Revenues | $ 2,524 | $ 2,057 | |
Revenue from contract with customer | 554 | 539 | |
Depreciation and amortization expense | 532 | 466 | |
Equipment rentals gross profit | 992 | 714 | |
Capital expenditures | 537 | 314 | |
Assets | 20,169 | $ 20,292 | |
Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 2,175 | 1,667 | |
Revenue from contract with customer | 205 | 149 | |
Sales of rental equipment | |||
Segment Reporting Information | |||
Revenues | 211 | 267 | |
Revenue from contract with customer | 211 | 267 | |
Sales of new equipment | |||
Segment Reporting Information | |||
Revenues | 45 | 49 | |
Revenue from contract with customer | 45 | 49 | |
Contractor supplies sales | |||
Segment Reporting Information | |||
Revenues | 29 | 24 | |
Revenue from contract with customer | 29 | 24 | |
Service and other revenues | |||
Segment Reporting Information | |||
Revenues | 64 | 50 | |
Revenue from contract with customer | 64 | 50 | |
Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | $ 834 | 577 | |
General rentals | |||
Segment Reporting Information | |||
Number of geographic divisions entity operates in (locations) | numberOfDivisions | 4 | ||
Revenues | $ 1,882 | 1,622 | |
Depreciation and amortization expense | 422 | 380 | |
Capital expenditures | 394 | 284 | |
Assets | 15,947 | 16,087 | |
General rentals | Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 1,593 | 1,273 | |
General rentals | Sales of rental equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 184 | 247 | |
General rentals | Sales of new equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 29 | 42 | |
General rentals | Contractor supplies sales | |||
Segment Reporting Information | |||
Revenue from contract with customer | 18 | 16 | |
General rentals | Service and other revenues | |||
Segment Reporting Information | |||
Revenue from contract with customer | 58 | 44 | |
General rentals | Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | 575 | 411 | |
Specialty | |||
Segment Reporting Information | |||
Revenues | 642 | 435 | |
Depreciation and amortization expense | 110 | 86 | |
Capital expenditures | 143 | 30 | |
Assets | 4,222 | $ 4,205 | |
Specialty | Equipment rentals | |||
Segment Reporting Information | |||
Revenues | 582 | 394 | |
Specialty | Sales of rental equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 27 | 20 | |
Specialty | Sales of new equipment | |||
Segment Reporting Information | |||
Revenue from contract with customer | 16 | 7 | |
Specialty | Contractor supplies sales | |||
Segment Reporting Information | |||
Revenue from contract with customer | 11 | 8 | |
Specialty | Service and other revenues | |||
Segment Reporting Information | |||
Revenue from contract with customer | 6 | 6 | |
Specialty | Equipment rentals gross profit | |||
Segment Reporting Information | |||
Equipment rentals gross profit | $ 259 | $ 166 |
Segment Information (Reconcilia
Segment Information (Reconciliation to Income (loss) from Continuing Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 992 | $ 714 |
Selling, general and administrative expenses | (323) | (250) |
Restructuring charge | 0 | (1) |
Non-rental depreciation and amortization | (97) | (91) |
Interest expense, net | (94) | (99) |
Other income, net | 5 | 2 |
Income before provision for income taxes | 483 | 275 |
Total equipment rentals gross profit | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | 834 | 577 |
Gross profit from other lines of business | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Equipment rentals gross profit | $ 158 | $ 137 |
Fair Value Measurements (Fair v
Fair Value Measurements (Fair value of financial instruments) (Details) - Senior notes - Level 1 - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,717 | $ 6,716 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Senior notes | $ 6,672 | $ 7,023 |
Debt (Schedule of long-term deb
Debt (Schedule of long-term debt instruments) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Apr. 27, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument | |||
Finance leases | $ 135,000,000 | $ 135,000,000 | |
Total debt | 9,488,000,000 | 9,685,000,000 | |
Less short-term portion | (960,000,000) | (906,000,000) | |
Total long-term debt | 8,528,000,000 | 8,779,000,000 | |
Term loan facility expiring 2025 | |||
Debt Instrument | |||
Long-term debt | $ 960,000,000 | 962,000,000 | |
Annual repayment rate | 1.00% | ||
Line of Credit | $3.75 billion ABL Facility expiring 2024 | |||
Debt Instrument | |||
Maximum borrowing capacity | $ 3,750,000,000 | ||
Long-term debt | 776,000,000 | 1,029,000,000 | |
Borrowing capacity, net of letters of credit | 2,905,000,000 | ||
Letters of credit | $ 64,000,000 | ||
Interest rate at March 31, 2022 | 1.90% | ||
Average month-end debt outstanding | $ 815,000,000 | ||
Weighted-average interest rate on average debt outstanding | 1.70% | ||
Maximum month-end debt outstanding | $ 891,000,000 | ||
Senior notes | 5 1/2 percent Senior Notes due 2027 (3) | |||
Debt Instrument | |||
Stated interest rate | 5.50% | ||
Long-term debt | $ 995,000,000 | 995,000,000 | |
Senior notes | 5 1/2 percent Senior Notes due 2027 (3) | Subsequent Event | |||
Debt Instrument | |||
Repayments of debt | $ 500,000,000 | ||
Debt instrument, redemption price, percentage | 102.75% | ||
Senior notes | 3 7/8 percent Senior Secured Notes due 2027 | |||
Debt Instrument | |||
Stated interest rate | 3.875% | ||
Long-term debt | $ 743,000,000 | 743,000,000 | |
Senior notes | 4 7/8 percent Senior Notes due 2028 | |||
Debt Instrument | |||
Stated interest rate | 4.875% | ||
Long-term debt | $ 1,661,000,000 | 1,660,000,000 | |
Senior notes | 5 1/4 percent Senior Notes due 2030 | |||
Debt Instrument | |||
Stated interest rate | 5.25% | ||
Long-term debt | $ 743,000,000 | 743,000,000 | |
Senior notes | 4 percent Senior Notes due 2030 | |||
Debt Instrument | |||
Stated interest rate | 4.00% | ||
Long-term debt | $ 743,000,000 | 743,000,000 | |
Senior notes | 3 7/8 percent Senior Notes due 2031 | |||
Debt Instrument | |||
Stated interest rate | 3.875% | ||
Long-term debt | $ 1,089,000,000 | 1,089,000,000 | |
Senior notes | 3 3/4 percent Senior Notes due 2032 | |||
Debt Instrument | |||
Stated interest rate | 3.75% | ||
Long-term debt | $ 743,000,000 | 743,000,000 | |
Senior notes | 4 7/8 percent Senior Notes due 2028, one | |||
Debt Instrument | |||
Long-term debt | 1,657,000,000 | ||
Senior notes | 4 7/8 percent Senior Notes due 2028, two | |||
Debt Instrument | |||
Long-term debt | 4,000,000 | ||
Line of Credit | Accounts Receivable Securitization Facility expiring 2022 | |||
Debt Instrument | |||
Long-term debt | 900,000,000 | $ 843,000,000 | |
Borrowing capacity, net of letters of credit | $ 0 | ||
Interest rate at March 31, 2022 | 1.20% | ||
Average month-end debt outstanding | $ 874,000,000 | ||
Weighted-average interest rate on average debt outstanding | 1.00% | ||
Maximum month-end debt outstanding | $ 900,000,000 | ||
Collateral amount | 1,050,000,000 | ||
Line of Credit | Term loan facility | |||
Debt Instrument | |||
Borrowing capacity, net of letters of credit | $ 0 | ||
Interest rate at March 31, 2022 | 2.20% | ||
Average month-end debt outstanding | $ 967,000,000 | ||
Weighted-average interest rate on average debt outstanding | 2.00% | ||
Maximum month-end debt outstanding | $ 968,000,000 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Line of Credit | ABL Facility | |
Debt Instrument | |
Minimum available borrowing capacity, percentage | 10.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income available to common stockholders | $ 367 | $ 203 |
Denominator: | ||
Denominator for basic earnings per share—weighted-average common shares (in shares) | 72,372 | 72,338 |
Effect of dilutive securities: | ||
Denominator for diluted earnings per share—adjusted weighted-average common shares (in shares) | 72,684 | 72,674 |
Basic earnings per share (in dollars per share) | $ 5.07 | $ 2.81 |
Diluted earnings per share (in dollars per share) | $ 5.05 | $ 2.80 |
Employee stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 4 | 6 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 308 | 330 |