01—Abstract
Summary
Summary of the 8-K filed October 25, 2012. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) filed an 8-K on October 25, 2012, announcing two key financial events.
Firstly, its subsidiary, United Rentals (North America), Inc. (URNA), is undertaking a registered public offering of senior unsecured notes. The proceeds from this offering, along with additional borrowings, will be used to redeem URNA's 10 7/8%a Senior Notes due 2016. This redemption will include a call premium, estimated at 110.966%, and accrued interest.
Management noted that this premium will be treated as interest expense and will not negatively impact EBITDA or adjusted earnings per share. Secondly, the filing includes the unaudited pro forma condensed combined statement of income for the nine months ended September 30, 2012.
This statement reflects the significant acquisition of RSC Holdings Inc. by United Rentals. Investors should note that these pro forma results are indicative and may not represent actual future financial performance or what would have been achieved had the acquisition been completed earlier.
02—Key points
Key Highlights
- URNA announces registered public offering of senior unsecured notes.
- Proceeds to be used for early redemption of 10 7/8% Senior Notes due 2016.
- Redemption will incur a call premium of approximately 110.966% plus accrued interest.
- Call premium will be recorded as interest expense, not impacting EBITDA or adjusted EPS.
- Filing includes unaudited pro forma condensed combined income statement for nine months ended September 30, 2012.
- Pro forma statement reflects the acquisition of RSC Holdings Inc.
03—Questions
Frequently Asked Questions
What is the main purpose of the new note offering?
The primary purpose of the new note offering by URNA is to raise funds to redeem its outstanding 10 7/8% Senior Notes due 2016, along with paying the associated call premium and accrued interest.
How will the cost of redeeming the old notes affect United Rentals' financials?
The call premium paid for the early redemption of the 2016 notes will be recognized as interest expense. The company has stated that this will not adversely impact EBITDA or adjusted earnings per share.
What is the significance of the pro forma income statement included in the filing?
The pro forma income statement provides a hypothetical view of United Rentals' financial performance for the first nine months of 2012 as if the acquisition of RSC Holdings Inc. had already occurred. This helps investors understand the potential combined financial picture.
Are the pro forma financial results indicative of future performance?
No, the unaudited pro forma results are not necessarily indicative of the results that would have been achieved had the acquisition occurred earlier or of future operating results. They serve as an informational tool to understand the impact of the acquisition.
04—Continue