UNITED RENTALS INC

Previous wording

Our operations are impacted by global economic conditions, including inflation, interest rate fluctuations and supply chain constraints, and we take actions to modify our plans to address such economic conditions. In 2022, for example, we intentionally held back on sales of rental equipment to ensure we had sufficient rental capacity for our customers. To date, our supply chain disruptions have been limited, but we may experience more severe supply chain disruptions in the future. Interest rates on our debt instruments have increased in recent years. For example, in March 2024, United Rentals (North America), Inc. (“URNA”) issued $1.1 billion aggregate principal amount of senior unsecured notes at a 61/8 percent interest rate, while URNA's issuance in August 2021 of $750 aggregate principal amount of senior unsecured notes was at a 3 ¾ percent interest rate. Additionally, the weighted average interest rates on our variable debt instruments were 6.5 percent and 1.4 percent for the nine months ended September 30, 2024 and the year ended December 31, 2021, respectively. We have experienced and are continuing to experience inflationary pressures. A portion of inflationary cost increases is passed on to customers. The most significant cost increases that are passed on to customers are for fuel and delivery, and there are other costs for which the pass through to customers is less direct, such as repairs and maintenance, and labor. The impact of inflation and interest rate fluctuations may continue to be significant in the future.

Current wording

Our operations are impacted by global economic conditions, including inflation, tariffs, interest rate fluctuations and supply chain constraints, and we take actions to modify our plans to address such economic conditions. To date, the impact from supply chain disruptions has been limited, but we may experience more severe supply chain disruptions in the future. Interest rates on our debt instruments have increased in recent years. For example, in March 2024, United Rentals (North America), Inc. (“URNA”) issued $1.1 billion aggregate principal amount of senior unsecured notes at a 61/8 percent interest rate, while URNA's issuance in August 2021 of $750 aggregate principal amount of senior unsecured notes was at a 3 ¾ percent interest rate. Additionally, the weighted average interest rates on our variable debt instruments were 5.6 percent and 1.4 percent for the three months ended March 31, 2025 and the year ended December 31, 2021, respectively. We have experienced and are continuing to experience inflationary pressures. A portion of inflationary cost increases is passed on to customers. The most significant cost increases that can be, in part, passed on to customers are for fuel and delivery, and there are other costs for which the pass through to customers is less direct, such as repairs and maintenance, and labor. Tariffs could result in the costs we incur being more than anticipated, as well as impact consumer confidence and/or result in declines in construction or industrial activity. The impact of inflation, tariffs and interest rate fluctuations may be significant in the future.

Previous wording

We are the largest equipment rental company in the world, with an integrated network of 1,666 rental locations. We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand. Although the equipment rental industry is highly fragmented and diverse, we believe that we are well positioned to take advantage of this environment because, as a larger company, we have more extensive resources and certain competitive advantages. These include a fleet of rental equipment with a total original equipment cost (“OEC”) of $21.9 billion, and a North American branch network that operates in 49 U.S. states and every Canadian province, and serves 99 of the 100 largest metropolitan areas in the U.S. Our size also gives us greater purchasing power, the ability to provide customers with a broader range of equipment and services, the ability to provide customers with equipment that is more consistently well-maintained and therefore more productive and reliable, and the ability to enhance the earning potential of our assets by transferring equipment among branches to satisfy customer needs.

Current wording

We are the largest equipment rental company in the world, with an integrated network of 1,697 rental locations. We primarily operate in the United States and Canada, and have a smaller presence in Europe, Australia and New Zealand. Although the equipment rental industry is highly fragmented and diverse, we believe that we are well positioned to take advantage of this environment because, as a larger company, we have more extensive resources and certain competitive advantages. These include a fleet of rental equipment with a total original equipment cost (“OEC”) of $21.2 billion, and a North American branch network that operates in 49 U.S. states and every Canadian province, and serves 99 of the 100 largest metropolitan areas in the U.S. Our size also gives us greater purchasing power, the ability to provide customers with a broader range of equipment and services, the ability to provide customers with equipment that is more consistently well-maintained and therefore more productive and reliable, and the ability to enhance the earning potential of our assets by transferring equipment among branches to satisfy customer needs.

Previous wording

We offer approximately 5,000 classes of equipment for rent to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. Our revenues are derived from the following sources: equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales and service and other revenues. Equipment rentals represented 85 percent of total revenues for the nine months ended September 30, 2024.

Current wording

We offer our equipment for rent to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. Our revenues are derived from the following sources: equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales and service and other revenues. Equipment rentals represented 85 percent of total revenues for the three months ended March 31, 2025.

Previous wording

•The continued expansion and cross-selling of adjacent specialty and services products, which enables us to provide a "one-stop" shop for our customers. We believe that the expansion of our specialty business, as exhibited by our acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) in March 2024, which is discussed in note 3 to our condensed consolidated financial statements, as well as our tools and onsite services offerings, further positions United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings; and

Current wording

•The continued expansion and cross-selling of adjacent specialty and services products, which enables us to provide a“one-stop” shop for our customers. We believe that the expansion of our specialty business, as exhibited by our acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) in March 2024, as well as our tools and onsite services offerings, further positions United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings; and

Previous wording

Prior to taking actions pertaining to our financial flexibility and liquidity, we assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. In 2024, we have taken the following actions to improve our financial flexibility and liquidity, and to position us to invest the necessary capital in our business:

Current wording

Prior to taking actions pertaining to our financial flexibility and liquidity, we assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment. As of March 31, 2025, we had available liquidity of $3.345 billion, comprised of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.

Previous wording

In October 2022, our Board of Directors authorized a $1.25 billion share repurchase program, which was completed in the first quarter of 2024. In January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, and repurchases under this program began in March 2024, following the completion of the $1.25 billion program. We have repurchased $875 under the $1.5 billion program through September 30, 2024, and intend to repurchase a total of $1.25 billion under the program in 2024 and then complete the program by the end of the first quarter of 2025. A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock. The repurchases above (as well as the total program sizes and expected 2024 repurchases) do not include the excise tax, which totaled $10 year-to-date through September 30, 2024.

Current wording

In January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, which was completed in the first quarter of 2025. On April 23, 2025, our Board of Directors authorized a new $1.5 billion share repurchase program. We plan to begin repurchases under the new program in the second quarter of 2025. In total, we intend to complete $1.5 billion of share repurchases in 2025, with the remaining $250 under the new program carried into 2026. A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock. The repurchases above (as well as the total program sizes) do not include the excise tax, which totaled $2 year-to-date through March 31, 2025.

Previous wording

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023. During the nine months ended September 30, 2024 and 2023, we paid dividends of $326 ($4.89 per share) and $305 ($4.44 per share), respectively. On October 23, 2024, our Board of Directors declared a quarterly dividend of $1.63 per share, payable on November 27, 2024 to stockholders of record on November 13, 2024.

Current wording

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023. During the three months ended March 31, 2025 and 2024, we paid dividends of $118 ($1.79 per share) and $110 ($1.63 per share), respectively. On April 23, 2025, our Board of Directors declared a quarterly dividend of $1.79 per share, payable on May 28, 2025 to stockholders of record on May 14, 2025.

Previous wording

Net income and diluted earnings per share include the after-tax impacts of the items below. The tax rates applied to the items below reflect the statutory rates in the applicable entities.

Current wording

Net income and diluted earnings per share for the three months ended March 31, 2025 include the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the three months ended March 31, 2025 was a net after-tax benefit of $29, or $0.45 per diluted share. Net income and diluted earnings per share include the after-tax impacts of the items below. The tax rates applied to the items below reflect the statutory rates in the applicable entities.

Previous wording

(3)This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold. The decreases in 2024 primarily reflect decreased sales of rental equipment acquired in the Ahern Rentals acquisition.

Current wording

(3)This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold.

Previous wording

(4)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information on the restructuring charges, which generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges" below. The amounts above primarily reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.

Current wording

(4)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information on the restructuring charges, which generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges” below.

Previous wording

EBITDA GAAP Reconciliations. EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the restructuring charges, stock compensation expense, net and the impact of the fair value mark-up of the acquired fleet. See below for further detail on each adjusting item. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies. The net income and adjusted EBITDA margins represent net income or adjusted EBITDA divided by total revenue. Management believes that EBITDA and adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that EBITDA and adjusted EBITDA help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. However, EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity.

Current wording

EBITDA GAAP Reconciliations. EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of the restructuring charges, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet. See below for further detail on each adjusting item. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies. The net income and adjusted EBITDA margins represent net income or adjusted EBITDA divided by total revenue. Management believes that EBITDA and adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that EBITDA and adjusted EBITDA help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced. However, EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity.

Previous wording

The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:

Current wording

Adjusted EBITDA for the three months ended March 31, 2025 includes the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the three months ended March 31, 2025 was a net after-tax benefit of $29 for net income and a $52 benefit for adjusted EBITDA. The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:

Previous wording

(1)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information on the restructuring charges, which generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges" below. The amounts above primarily reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.

Current wording

(1)This primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information on the restructuring charges, which generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-restructuring charges” below.

Previous wording

(3)This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold. The decreases in 2024 primarily reflect decreased sales of rental equipment acquired in the Ahern Rentals acquisition.

Current wording

(3)This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold.

Previous wording

For the nine months ended September 30, 2024, total revenues of $11.250 billion increased 6.1 percent compared with 2023. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 95 percent of total revenue for the nine months ended September 30, 2024). Equipment rentals increased $662, or 7.4 percent, primarily due to a 4.1 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.3 percent increase in average OEC. Sales of rental equipment did not change significantly year-over-year.

Current wording

For the three months ended March 31, 2025, total revenues of $3.719 billion increased 6.7 percent compared with 2024. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 95 percent of total revenue for the three months ended March 31, 2025). Equipment rentals increased $216, or 7.4 percent, primarily due to a 3.1 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.3 percent increase in average OEC. Fleet productivity increased 1.9 percent on a pro forma basis including the pre-acquisition results of Yak for 2024. Sales of rental equipment did not change significantly year-over-year.

Previous wording

As discussed in note 4 to our condensed consolidated financial statements, our reportable segments are general rentals and specialty. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The general rentals segment’s customers include construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. This segment operates throughout the United States and Canada. The specialty segment rents products (and provides setup and other services on such rented equipment) including 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, iv) mobile storage equipment and modular office space and v) surface protection mats. 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.

Current wording

As discussed in note 3 to our condensed consolidated financial statements, our reportable segments are general rentals and specialty. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The general rentals segment’s customers include construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. This segment operates throughout the United States and Canada. The specialty segment rents products (and provides setup and other services on such rented equipment) including (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, (iv) mobile storage equipment and modular office space and (v) surface protection mats. 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 smaller presence in Europe, Australia and New Zealand.

Previous wording

For the nine months ended September 30, 2024, equipment rentals represented 85 percent of total revenues. For the nine months ended September 30, 2024, equipment rentals of $9.607 billion increased $662, or 7.4 percent, as compared to the same period in 2023, primarily due to a 4.1 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.3 percent increase in average OEC.

Current wording

Equipment rentals represented 85 percent of total revenues for the three months ended March 31, 2025. For the three months ended March 31, 2025, equipment rentals of $3.145 billion increased $216, or 7.4 percent, as compared to the same period in 2024, primarily due to a 3.1 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.3 percent increase in average OEC. Fleet productivity increased 1.9 percent on a pro forma basis including the pre-acquisition results of Yak for 2024.

Previous wording

For the three months ended September 30, 2024, equipment rentals represented 85 percent of total revenues for the general rentals segment. For the three months ended September 30, 2024, general rentals equipment rentals increased $20, or 0.9 percent, as compared to the same period in 2023.

Current wording

For the three months ended March 31, 2025, equipment rentals represented 82 percent of total revenues for the general rentals segment. For the three months ended March 31, 2025, general rentals equipment rentals increased $29, or 1.4 percent, as compared to the same period in 2024.

Previous wording

For the three months ended September 30, 2024, equipment rentals represented 91 percent of total revenues for the specialty segment. For the three months ended September 30, 2024, specialty equipment rentals increased $219, or 23.9 percent, as compared to the same period in 2023, primarily due to the impact of the Yak acquisition and increased average OEC. Specialty equipment rentals increased 14.8 percent year-over-year excluding the revenue from the acquired Yak locations.

Current wording

For the three months ended March 31, 2025, equipment rentals represented 91 percent of total revenues for the specialty segment. For the three months ended March 31, 2025, specialty equipment rentals increased $187, or 21.8 percent, as compared to the same period in 2024, primarily due to the impact of the Yak acquisition and increased average OEC. Specialty equipment rentals increased 14.8 percent year-over-year on a pro forma basis including the pre-acquisition results of Yak for 2024.

Previous wording

Sales of rental equipment. For the nine months ended September 30, 2024, sales of rental equipment represented approximately 10 percent of our total revenues. For the three months ended September 30, 2024, sales of rental equipment decreased 12.3 percent year-over-year, primarily due to changes in channel mix, and the continued normalization of the used equipment market, which resulted in lower pricing. For the nine months ended September 30, 2024, sales of rental equipment did not change significantly year-over-year.

Current wording

Sales of rental equipment. For the three months ended March 31, 2025, sales of rental equipment represented approximately 10 percent of our total revenues. For the three months ended March 31, 2025, sales of rental equipment did not change significantly year-over-year.

Previous wording

Sales of new equipment. For the nine months ended September 30, 2024, sales of new equipment represented approximately 2 percent of our total revenues. For the three and nine months ended September 30, 2024, sales of new equipment increased 48.1 percent and 12.0 percent, respectively, primarily due to the impact of the Yak acquisition.

Current wording

Sales of new equipment. For the three months ended March 31, 2025, sales of new equipment represented approximately 2 percent of our total revenues. For the three months ended March 31, 2025, sales of new equipment increased 45.8 percent year-over-year primarily due to supply chain normalization.

Previous wording

Contractor supplies sales represent our revenues associated with selling a variety of supplies, including construction consumables, tools, small equipment and safety supplies. For the nine months ended September 30, 2024, contractor supplies sales represented approximately 1 percent of our total revenues. For the three and nine months ended September 30, 2024, contractor supplies sales did not change significantly year-over-year.

Current wording

Contractor supplies sales represent our revenues associated with selling a variety of supplies, including construction consumables, tools, small equipment and safety supplies. For the three months ended March 31, 2025, contractor supplies sales represented approximately 1 percent of our total revenues. Contractor supplies sales for the three months ended March 31, 2025 were flat year-over-year.

Previous wording

Service and other revenues primarily represent our revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). For the nine months ended September 30, 2024, service and other revenues represented approximately 2 percent of our total revenues. For the three and nine months ended September 30, 2024, service and other revenues did not change significantly year-over-year.

Current wording

Service and other revenues primarily represent our revenues earned from providing repair and maintenance services on our customers’ fleet (including parts sales). For the three months ended March 31, 2025, service and other revenues represented approximately 2 percent of our total revenues. For the three months ended March 31, 2025, service and other revenues did not change significantly year-over-year.

Previous wording

Segment equipment rentals gross profit and gross margin were as follows:

Current wording

See note 3 to our condensed consolidated financial statements for additional information on segment performance. Segment equipment rentals gross profit and gross margin were as follows:

Previous wording

General rentals. For the three months ended September 30, 2024, equipment rentals gross profit increased by $2, and equipment rentals gross margin decreased by 20 basis points, year-over-year.

Current wording

General rentals. For the three months ended March 31, 2025, equipment rentals gross profit decreased by $2, and equipment rentals gross margin decreased by 60 basis points year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, including increases in delivery and certain other costs.

Previous wording

Specialty. For the three months ended September 30, 2024, equipment rentals gross profit increased by $90, and equipment rentals gross margin decreased by 210 basis points, year-over-year. Gross margin decreased primarily due to increased depreciation expense, including the impact of the Yak acquisition.

Current wording

Specialty. For the three months ended March 31, 2025, equipment rentals gross profit increased by $29, and equipment rentals gross margin decreased by 600 basis points, year-over-year. Gross margin decreased primarily due to 1) increased depreciation expense, including the impact of the Yak acquisition, 2) the impact of a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, 3) inflation and 4) normal cost variability, including the impact of expenses related to repositioning fleet to efficiently support strong demand.

Previous wording

For the three months ended September 30, 2024, total gross margin decreased 80 basis points from the same period in 2023. Equipment rentals gross margin decreased 30 basis points from 2023. Gross margin from sales of rental equipment decreased 430 basis points from 2023, which primarily reflected the continued normalization of the used equipment market, including pricing. The gross margin fluctuations from sales of new equipment, contractor supplies sales and service and other revenues generally reflect normal variability, and such revenue types did not account for a significant portion of total gross profit (gross profit for these revenue types represented 4 percent of total gross profit for the three months ended September 30, 2024).

Current wording

For the three months ended March 31, 2025, total gross margin decreased 210 basis points from 2024. Equipment rentals gross margin decreased 180 basis points from 2024, primarily due to reduced margins in the specialty segment, as discussed above. Gross margin from sales of rental equipment decreased 450 basis points from 2024, which primarily reflected the continued normalization of the used equipment market, including pricing. The gross margin fluctuations from sales of new equipment, contractor supplies sales and service and other revenues generally reflect normal variability, and such revenue types did not account for a significant portion of total gross profit (gross profit for these revenue types represented 4 percent of total gross profit for the three months ended March 31, 2025).

Previous wording

SG&A expense primarily includes sales force compensation, information technology costs, third party professional fees, management salaries, bad debt expense and clerical and administrative overhead. SG&A expense as a percentage of revenue for the three months ended September 30, 2024 increased year-over-year primarily due to the impact of certain discrete expenses and normal variability in expense timing. SG&A expense as a percentage of revenue for the nine months ended September 30, 2024 was flat year-over-year.

Current wording

SG&A expense primarily includes sales force compensation, information technology costs, third party professional fees, management salaries, bad debt expense and clerical and administrative overhead. The year-over-year increase in SG&A expense as a percentage of revenue for the three months ended March 31, 2025 includes the impact of the professional fees associated with the terminated H&E acquisition discussed above.

Previous wording

Therestructuring charges primarily reflect severance and branch closure charges associated with our restructuring programs. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program. The year-over-year decreases in restructuring charges for the three and nine months ended September 30, 2024 primarily reflect 2023 charges associated with the restructuring program initiated following the December 2022 acquisition of Ahern Rentals. Since the first such program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of $383. We currently have no open restructuring programs, and the total liability associated with our restructuring programs was $18 as of September 30, 2024.

Current wording

Therestructuring charges primarily reflect severance and branch closure charges associated with our restructuring programs. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program. Since the first such program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of $384. We currently have no open restructuring programs, and the total liability associated with our restructuring programs was $17 as of March 31, 2025.

Previous wording

Interest expense, net for the three and nine months ended September 30, 2024 increased by 9.2 percent and 7.8 percent year-over-year, respectively, primarily reflecting increased average debt, including the debt issued to partially fund the Yak acquisition discussed above.

Current wording

Interest expense, net for the three months ended March 31, 2025 increased by 15.0 percent year-over-year, primarily reflecting the impact of the bridge financing fees associated with the terminated H&E acquisition discussed above and increased average debt, including the debt issued to partially fund the March 2024 acquisition of Yak discussed above, partially offset by decreased variable debt interest rates. The weighted average interest rates on our variable debt instruments were 5.6 percent and 6.6 percent for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Other (income) expense, net primarily includes i) currency gains and losses, ii) finance charges, iii) gains and losses on sales of non-rental equipment and iv) other miscellaneous items.

Current wording

Other income, net primarily includes (i) currency gains and losses, (ii) finance charges, (iii) gains and losses on sales of non-rental equipment and (iv) other miscellaneous items. Other income, net for the three months ended March 31, 2025 includes $64 of income associated with the receipt of the break-up fee associated with the terminated H&E acquisition discussed above.

Previous wording

Theeffective tax rates for 2024 and 2023 differed from the federal statutory rate of 21 percent primarily due to the geographical mix of income between foreign and domestic operations, the impact of state and local taxes, stock compensation, and other deductible and nondeductible charges. The nine months ended September 30, 2023 additionally included the impact of the release of a valuation allowance on foreign tax credits.

Current wording

Theeffective tax rates for 2025 and 2024 differed from the federal statutory rate of 21 percent primarily due to the geographical mix of income between foreign and domestic operations, the impact of state and local taxes, stock compensation, and other deductible and nondeductible charges. The year-over-year increase in the effective tax rate for the three months ended March 31, 2025 primarily reflected a benefit recognized in the three months ended March 31, 2024 associated with decreases to the average state tax rates.

Previous wording

Balance sheet. Prepaid expenses and other assets increased by $100, or 74.1 percent, from December 31, 2023 to September 30, 2024, primarily due to an increase in income taxes receivable which reflected required tax payments exceeding the estimated tax accruals. Goodwill increased by $913, or 15.4 percent, from December 31, 2023 to September 30, 2024, primarily due to the impact of the Yak acquisition, as discussed in note 3 to the condensed consolidated financial statements. Operating lease right-of-use assets increased by $156, or 14.2 percent, and operating lease liabilities increased by $126, or 14.1 percent, from December 31, 2023 to September 30, 2024, and both increases primarily reflected increased amounts of real estate and equipment leased under operating leases. Accounts payable increased by $311, or 34.4 percent, from December 31, 2023 to September 30, 2024, primarily due to seasonal increases in capital expenditures and business activities. See the condensed consolidated statements of cash flows for further information on changes in cash and cash equivalents, the condensed consolidated statements of stockholders’ equity for further information on changes in stockholders’ equity and note 7 to the condensed consolidated financial statements for further information on debt changes.

Current wording

Balance sheet. Prepaid expenses and other assets decreased by $61, or 26.0 percent, from December 31, 2024 to March 31, 2025, primarily due to a decrease in income taxes receivable which reflected estimated tax accruals exceeding the required tax payments. Accounts payable increased by $281, or 37.6 percent, from December 31, 2024 to March 31, 2025, primarily due to seasonal increases in capital expenditures and business activities. See the condensed consolidated statements of cash flows for further information on changes in cash and cash equivalents, the condensed consolidated statements of stockholders’ equity for further information on changes in stockholders’ equity and note 5 to the condensed consolidated financial statements for further information on debt changes.

Previous wording

In October 2022, our Board of Directors authorized a $1.25 billion share repurchase program, which was completed in the first quarter of 2024. In January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, and repurchases under this program began in March 2024, following the completion of the $1.25 billion program. We have repurchased $875 under the $1.5 billion program through September 30, 2024, and intend to repurchase a total of $1.25 billion under the program in 2024 and then complete the program by the end of the first quarter of 2025. A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock. The repurchases above (as well as the total program sizes and expected 2024 repurchases) do not include the excise tax, which totaled $10 year-to-date through September 30, 2024. Since 2012, we have repurchased a total of $7.100 billion (inclusive of immaterial excise taxes, which were first imposed in 2023) of Holdings' common stock under our share repurchase programs (comprised of eight programs that have ended and the current program).

Current wording

In January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, which was completed in the first quarter of 2025. On April 23, 2025, our Board of Directors authorized a new $1.5 billion share repurchase program. We plan to begin repurchases under the new program in the second quarter of 2025. In total, we intend to complete $1.5 billion of share repurchases in 2025, with the remaining $250 under the new program carried into 2026. A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock. The repurchases above (as well as the total program sizes) do not include the excise tax, which totaled $2 year-to-date through March 31, 2025. Since 2012, we have repurchased a total of $7.730 billion (inclusive of immaterial excise taxes, which were first imposed in 2023) of Holdings' common stock under our share repurchase programs (comprised of nine programs that have ended, including the program that was completed in the first quarter of 2025).

Previous wording

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023. During the nine months ended September 30, 2024 and 2023, we paid dividends totaling $326 ($4.89 per share) and $305 ($4.44 per share), respectively. On October 23, 2024, our Board of Directors declared a quarterly dividend of $1.63 per share, payable on November 27, 2024 to stockholders of record on November 13, 2024.

Current wording

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023. During the three months ended March 31, 2025 and 2024, we paid dividends totaling $118 ($1.79 per share) and $110 ($1.63 per share), respectively. On April 23, 2025, our Board of Directors declared a quarterly dividend of $1.79 per share, payable on May 28, 2025 to stockholders of record on May 14, 2025.

Previous wording

Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment, and borrowings available under our ABL facility and accounts receivable securitization facility. As of September 30, 2024, we had cash and cash equivalents of $479. We believe that our existing sources of cash will be sufficient to support our existing operations over the next 12 months. The table below presents financial information associated with our principal sources of cash as of and for the nine months ended September 30, 2024:

Current wording

Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment, and borrowings available under our ABL and accounts receivable securitization facilities. As of March 31, 2025, we had cash and cash equivalents of $542. We believe that our existing sources of cash will be sufficient to support our existing operations over the next 12 months. The table below presents financial information associated with our principal sources of cash as of and for the three months ended March 31, 2025:

Previous wording

•Amended our accounts receivable securitization facility, primarily to extend the maturity date and to increase the facility size from $1.3 billion to $1.5 billion. The facility expires in June 2025 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility.

Current wording

(1)The accounts receivable securitization facility expires on June 24, 2025 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility.

Previous wording

We expect that our principal short-term (over the next 12 months) and long-term needs for cash relating to our operations will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service, (v) share repurchases, (vi) dividends and (vii) acquisitions. We plan to fund such cash requirements from our existing sources of cash. In addition, we may seek additional financing through the securitization of some of our real estate, the use of additional operating leases or other financing sources as market conditions permit. The table below presents information on payments coming due under the most significant categories of our needs for cash (excluding operating cash flows pertaining to normal business operations, such as human capital costs, which are not accurately estimable) as of September 30, 2024:

Current wording

We expect that our principal short-term (over the next 12 months) and long-term needs for cash relating to our operations will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service, (v) share repurchases, (vi) dividends and (vii) acquisitions. We plan to fund such cash requirements from our existing sources of cash. In addition, we may seek additional financing through the securitization of some of our real estate, the use of additional operating leases or other financing sources as market conditions permit.

Previous wording

Sources and Uses of Cash. During the nine months ended September 30, 2024, we (i) generated cash from operating activities of $3.498 billion, (ii) generated cash from the sale of rental and non-rental equipment of $1.119 billion and (iii) received cash from debt proceeds, net of payments, of $1.765 billion. We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $3.444 billion, (ii) purchase other companies for $1.342 billion, (iii) purchase shares of our common stock for $1.168 billion and (iv) pay dividends of $326. During the nine months ended September 30, 2023, we (i) generated cash from operating activities of $3.290 billion, (ii) generated cash from the sale of rental and non-rental equipment of $1.182 billion and (iii) received cash from debt proceeds, net of payments, of $543. We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $3.345 billion, (ii) purchase other companies for $406, (iii) purchase shares of our common stock for $806 and (iv) pay dividends of $305.

Current wording

Sources and Uses of Cash. During the three months ended March 31, 2025, we (i) generated cash from operating activities of $1.425 billion, including the $52 H&E merger termination benefit discussed above, and (ii) generated cash from the sale of rental and non-rental equipment of $391. We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $745, (ii) make debt payments, net of proceeds, of $538, (iii) purchase shares of our common stock for $289 and (iv) pay dividends of $118. During the three months ended March 31, 2024, we (i) generated cash from operating activities of $1.029 billion, (ii) generated cash from the sale of rental and non-rental equipment of $396 and (iii) received cash from debt proceeds, net of payments, of $866. We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $569, (ii) purchase other companies for $1.118 billion, (iii) purchase shares of our common stock for $415 and (iv) pay dividends of $110.

Previous wording

All of the existing guarantees by Holdings and the guarantor subsidiaries rank equally in right of payment with all of the guarantors' existing and future senior indebtedness. The secured indebtedness of Holdings and the guarantor subsidiaries (including guarantees of URNA’s existing and future secured indebtedness) will rank effectively senior to guarantees of any unsecured indebtedness to the extent of the value of the assets securing such indebtedness. Future guarantees of subordinated indebtedness will rank junior to any existing and future senior indebtedness of the guarantors. The guarantees of URNA’s indebtedness are effectively junior to any indebtedness of our subsidiaries that are not guarantors, including our foreign subsidiaries. As of September 30, 2024, the indebtedness of our non-guarantors was comprised of (i) $1.423 billion of outstanding borrowings by the SPV in connection with the Company’s accounts receivable securitization facility, (ii) $121 of outstanding borrowings under the ABL facility by non-guarantor subsidiaries and (iii) $12 of finance leases of our non-guarantor subsidiaries.

Current wording

All of the existing guarantees by Holdings and the guarantor subsidiaries rank equally in right of payment with all of the guarantors' existing and future senior indebtedness. The secured indebtedness of Holdings and the guarantor subsidiaries (including guarantees of URNA’s existing and future secured indebtedness) will rank effectively senior to guarantees of any unsecured indebtedness to the extent of the value of the assets securing such indebtedness. Future guarantees of subordinated indebtedness will rank junior to any existing and future senior indebtedness of the guarantors. The guarantees of URNA’s indebtedness are effectively junior to any indebtedness of our subsidiaries that are not guarantors, including our foreign subsidiaries. As of March 31, 2025, the indebtedness of our non-guarantors was comprised of (i) $1.323 billion of outstanding borrowings by the SPV in connection with the Company’s accounts receivable securitization facility, (ii) $120 of outstanding borrowings under the ABL facility by non-guarantor subsidiaries and (iii) $13 of finance leases of our non-guarantor subsidiaries.