UNITED RENTALS NORTH AMERICA INC

Previous 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 six months ended June 30, 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.

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 5.5 percent and 1.4 percent for the nine months ended September 30, 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 1,713 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 $22.1 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 1,739 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 $22.8 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 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 86 percent of total revenues for the six months ended June 30, 2025.

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 86 percent of total revenues for the nine months ended September 30, 2025.

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. As of June 30, 2025, we had available liquidity of $2.996 billion, comprised of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.

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. In 2025, 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:

Previous 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. In April 2025, our Board of Directors authorized a new $1.5 billion share repurchase program, and repurchases under this program began in April 2025. We have repurchased $417 under the current program through June 30, 2025. Subsequent to the enactment of the new federal tax legislation discussed below (see "Results of Operations-Other costs/(income)-effective tax rates”) on July 4, 2025, and with consideration of the expected cash flow benefit associated with the legislation, our Board of Directors approved an increase in the size of the current share repurchase program, from $1.5 billion to $2.0 billion. We intend to repurchase $1.65 billion under the $2.0 billion program in 2025, with the remaining $350 under the 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 $6 year-to-date through June 30, 2025 (the total excise tax amount relates to both the current program and the prior program that was completed in the first quarter of 2025).

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. In April 2025, our Board of Directors authorized a new $1.5 billion share repurchase program, and repurchases under this program began in April 2025. Subsequent to the enactment of the new federal tax legislation discussed below (see "Results of Operations-Other costs/(income)-effective tax rates”) on July 4, 2025, and with consideration of the expected cash flow benefit associated with the legislation, our Board of Directors approved an increase in the size of the current share repurchase program, from $1.5 billion to $2.0 billion. We have repurchased $1.033 billion under this program through September 30, 2025, and intend to repurchase $1.65 billion under the program in 2025, with the remaining $350 under the program carried into 2026. Including the $250 of repurchases made to complete the prior $1.5 billion share repurchase program, we expect to complete $1.9 billion of repurchases in 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) do not include the excise tax, which totaled $12 year-to-date through September 30, 2025 (the total excise tax amount relates to both the current program and the prior 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 six months ended June 30, 2025 and 2024, we paid dividends of $235 ($3.58 per share) and $219 ($3.26 per share), respectively. On July 23, 2025, our Board of Directors declared a quarterly dividend of $1.79 per share, payable on August 27, 2025 to stockholders of record on August 13, 2025.

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 nine months ended September 30, 2025 and 2024, we paid dividends of $350 ($5.37 per share) and $326 ($4.89 per share), respectively. On October 22, 2025, our Board of Directors declared a quarterly dividend of $1.79 per share, payable on November 26, 2025 to stockholders of record on November 12, 2025.

Previous wording

Merger Termination Benefit. In January 2025, we announced that we had signed a merger agreement to acquire H&E Equipment Services, Inc. d/b/a H&E Rentals (“H&E”). In February 2025, following the termination of that merger agreement, we received a break-up fee of $64. The merger agreement was terminated in the first quarter of 2025, and the merger termination had no impact on the results for the three months ended June 30, 2025. Our results for the six months ended June 30, 2025 include a net $39 merger termination benefit, which reflects this break-up fee, net of related transaction costs. The net merger termination benefit is comprised of $12 of professional fees recorded in selling, general and administrative ("SG&A") expenses, $13 of bridge financing fees recorded in interest expense, net, and the break-up fee of $64 recorded in other income, net. For the six months ended June 30, 2025, the impact of the merger termination was a $29 after-tax benefit, or $0.45 per diluted share, for net income and a $52 benefit for adjusted EBITDA (as defined below), cash flow from operating activities and free cash flow (as defined below). The cash flow impact reflects the fact that the associated taxes have not yet been paid.

Current wording

Merger Termination Benefit. In January 2025, we announced that we had signed a merger agreement to acquire H&E Equipment Services, Inc. d/b/a H&E Rentals (“H&E”). In February 2025, following the termination of that merger agreement, we received a break-up fee of $64. The merger agreement was terminated in the first quarter of 2025, and the merger termination had no impact on the results for the three months ended September 30, 2025. Our results for the nine months ended September 30, 2025 include a net $39 merger termination benefit, which reflects this break-up fee, net of related transaction costs. The net merger termination benefit is comprised of $12 of professional fees recorded in selling, general and administrative ("SG&A") expenses, $13 of bridge financing fees recorded in interest expense, net, and the break-up fee of $64 recorded in other income, net. For the nine months ended September 30, 2025, the impact of the merger termination was a $29 after-tax benefit, or $0.45 per diluted share, for net income and a $52 benefit for adjusted EBITDA (as defined below).

Previous wording

Net income and diluted earnings per share for the six months ended June 30, 2025 include the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the six months ended June 30, 2025 was a net after-tax benefit of $29, or $0.45 per diluted share. The merger termination did not impact the results for any other period above. 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 nine months ended September 30, 2025 include the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the nine months ended September 30, 2025 was a net after-tax benefit of $29, or $0.45 per diluted share. The merger termination did not impact the results for any other period above. 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

Adjusted EBITDA for the six months ended June 30, 2025 includes the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the six months ended June 30, 2025 was a net after-tax benefit of $29 for net income and a $52 benefit for adjusted EBITDA. The merger termination did not impact the results for any other period in the table below. The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:

Current wording

Adjusted EBITDA for the nine months ended September 30, 2025 includes the impact of the H&E merger termination benefit discussed above. The impact of the merger termination for the nine months ended September 30, 2025 was a net after-tax benefit of $29 for net income and a $52 benefit for adjusted EBITDA. The merger termination did not impact the results for any other period in the table below. The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:

Previous wording

(4)The amount for the six months ended June 30, 2025 reflects bridge financing fees associated with the terminated H&E acquisition discussed above.

Current wording

(4)The amount for the nine months ended September 30, 2025 primarily reflects bridge financing fees associated with the terminated H&E acquisition discussed above.

Previous wording

For the three months ended June 30, 2025, net income decreased $14, or 2.2 percent, to $622. Net income margin decreased 110 basis points to 15.8 percent, primarily driven by decreased gross margin from equipment rentals, which reflected the impact of inflation and normal cost variability, particularly in delivery and labor and benefits costs. The impact of an increase in the effective tax rate, which was primarily due to state tax benefits recognized in 2024, was offset by a decrease in interest expense as a percentage of revenue, which primarily reflected decreased variable debt interest rates.

Current wording

For the three months ended September 30, 2025, net income decreased $7, or 1.0 percent, to $701. Net income margin decreased 110 basis points to 16.6 percent, primarily driven by 1) decreased gross margin from equipment rentals, which reflected the impact of inflation and normal cost variability, particularly in delivery costs, as well as higher depreciation expense in the specialty segment due, in part, to growth in the segment's matting business, partially offset by decreases as a percentage of revenue in 2) the provision for income taxes and 3) interest expense. While both the provision for income taxes and interest expense decreased as a percentage of revenue, the effective tax rate and net interest expense were both largely flat year-over-year.

Previous wording

For the three months ended June 30, 2025, adjusted EBITDA increased $41, or 2.3 percent, to $1.810 billion. Adjusted EBITDA margin decreased 100 basis points to 45.9 percent, primarily reflecting decreases in gross margin from equipment rentals (excluding depreciation and stock compensation expense) and gross margin from used equipment sales (excluding the adjustment for the impact of the fair value mark-up of acquired fleet). The decreased gross margin from equipment rentals reflected the impact of inflation and normal cost variability, particularly in delivery and labor and benefits costs. The decreased gross margin from sales of rental equipment primarily reflected the normalization of the used equipment market, including pricing.

Current wording

For the three months ended September 30, 2025, adjusted EBITDA increased $42, or 2.2 percent, to $1.946 billion. Adjusted EBITDA margin decreased 170 basis points to 46.0 percent, primarily reflecting decreases in gross margin from equipment rentals (excluding depreciation and stock compensation expense) and gross margin from used equipment sales (excluding the adjustment for the impact of the fair value mark-up of acquired fleet). The decreased gross margin from equipment rentals reflected the impact of inflation and normal cost variability, particularly in delivery costs. The decreased gross margin from sales of rental equipment primarily reflected the normalization of the used equipment market, including pricing.

Previous wording

For the six months ended June 30, 2025, net income decreased $38, or 3.2 percent, to $1.140 billion, which included the $29 after-tax H&E merger termination benefit discussed above. Net income margin decreased 130 basis points to 14.9 percent, primarily driven by 1) decreased gross margin from equipment rentals, particularly for the specialty segment, as discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”), 2) decreased gross margin from used equipment sales, which primarily reflected the normalization of the used equipment market, including pricing, and 3) increased SG&A expenses, which included the professional fees associated with the terminated H&E acquisition, partially offset by 4) the impact of the H&E break-up fee discussed above.

Current wording

For the nine months ended September 30, 2025, net income decreased $45, or 2.4 percent, to $1.841 billion, which included the $29 after-tax H&E merger termination benefit discussed above. Net income margin decreased 130 basis points to 15.5 percent, primarily driven by 1) decreased gross margin from equipment rentals, particularly for the specialty segment, as discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”) and 2) decreased gross margin from used equipment sales, which primarily reflected the normalization of the used equipment market, including pricing, partially offset by 3) the impact of the H&E break-up fee discussed above.

Previous wording

For the six months ended June 30, 2025, adjusted EBITDA increased $125, or 3.7 percent, to $3.481 billion, which included the $52 merger termination benefit discussed above. Adjusted EBITDA margin decreased 80 basis points to 45.4 percent, primarily reflecting 1) decreased gross margin from equipment rentals (excluding depreciation and stock compensation expense), 2) decreased gross margin from sales of rental equipment (excluding the adjustment for the impact of the fair value mark-up of acquired fleet), which primarily reflected the normalization of the used equipment market, including pricing, and 3) higher SG&A expenses, which included the professional fees associated with the terminated H&E acquisition, partially offset by 4) the impact of the H&E break-up fee discussed above. The decreased gross margin from equipment rentals is discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”). While the gross margin discussion below includes the impact of depreciation, the other non-depreciation items discussed below, including inflation, normal cost variability, and a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, for the specialty segment, were the primary drivers of the decrease in gross margin from equipment rentals on the adjusted EBITDA basis (excluding depreciation and stock compensation expense).

Current wording

For the nine months ended September 30, 2025, adjusted EBITDA increased $167, or 3.2 percent, to $5.427 billion, which included the $52 merger termination benefit discussed above. Adjusted EBITDA margin decreased 120 basis points to 45.6 percent, primarily reflecting 1) decreased gross margin from equipment rentals (excluding depreciation and stock compensation expense), 2) decreased gross margin from sales of rental equipment (excluding the adjustment for the impact of the fair value mark-up of acquired fleet), which primarily reflected the normalization of the used equipment market, including pricing, and 3) higher SG&A expenses, which included the professional fees associated with the terminated H&E acquisition, partially offset by 4) the impact of the H&E break-up fee discussed above. The decreased gross margin from equipment rentals is discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”). While the gross margin discussion below includes the impact of depreciation, the other non-depreciation items discussed below, including inflation, normal cost variability, and a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, for the specialty segment, were the primary drivers of the decrease in gross margin from equipment rentals on the adjusted EBITDA basis (excluding depreciation and stock compensation expense).

Previous wording

For the three months ended June 30, 2025, total revenues of $3.943 billion increased 4.5 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 June 30, 2025). Equipment rentals increased $200, or 6.2 percent, primarily due to a 3.6 percent increase in average OEC and a 3.3 percent increase in fleet productivity. Sales of rental equipment decreased $48, or 13.2 percent, primarily due to the normalization of used equipment pricing.

Current wording

For the three months ended September 30, 2025, total revenues of $4.229 billion increased 5.9 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 September 30, 2025). Equipment rentals increased $202, or 5.8 percent, primarily due to a 4.2 percent increase in average OEC and a 2.0 percent increase in fleet productivity. Sales of rental equipment did not change significantly year-over-year.

Previous wording

For the six months ended June 30, 2025, total revenues of $7.662 billion increased 5.6 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 six months ended June 30, 2025). Equipment rentals increased $416, or 6.8 percent, primarily due to a 3.5 percent increase in average OEC, and a 3.2 percent increase in fleet productivity, which includes the impact of the Yak acquisition. Fleet productivity increased 2.6 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.

Current wording

For the nine months ended September 30, 2025, total revenues of $11.891 billion increased 5.7 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 nine months ended September 30, 2025). Equipment rentals increased $618, or 6.4 percent, primarily due to a 3.7 percent increase in average OEC, and a 2.8 percent increase in fleet productivity, which includes the impact of the Yak acquisition. Fleet productivity increased 2.5 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

Equipment rentals represented 87 percent of total revenues for the three months ended June 30, 2025. For the three months ended June 30, 2025, equipment rentals of $3.415 billion increased $200, or 6.2 percent, as compared to the same period in 2024, primarily due to a 3.6 percent increase in average OEC and a 3.3 percent increase in fleet productivity.

Current wording

Equipment rentals represented 87 percent of total revenues for the three months ended September 30, 2025. For the three months ended September 30, 2025, equipment rentals of $3.665 billion increased $202, or 5.8 percent, as compared to the same period in 2024, primarily due to a 4.2 percent increase in average OEC and a 2.0 percent increase in fleet productivity.

Previous wording

For the three months ended June 30, 2025, equipment rentals represented 84 percent of total revenues for the general rentals segment. For the three months ended June 30, 2025, general rentals equipment rentals increased $59, or 2.7 percent, as compared to the same period in 2024.

Current wording

For the three months ended September 30, 2025, equipment rentals represented 85 percent of total revenues for the general rentals segment. For the three months ended September 30, 2025, general rentals equipment rentals increased $73, or 3.1 percent, as compared to the same period in 2024.

Previous wording

For the three months ended June 30, 2025, equipment rentals represented 92 percent of total revenues for the specialty segment. For the three months ended June 30, 2025, specialty equipment rentals increased $141, or 14.0 percent, as compared to the same period in 2024, primarily due to increased average OEC.

Current wording

For the three months ended September 30, 2025, equipment rentals represented 90 percent of total revenues for the specialty segment. For the three months ended September 30, 2025, specialty equipment rentals increased $129, or 11.4 percent, as compared to the same period in 2024, primarily due to increased average OEC.

Previous wording

For the six months ended June 30, 2025, equipment rentals represented 86 percent of total revenues. For the six months ended June 30, 2025, equipment rentals of $6.560 billion increased $416, or 6.8 percent, as compared to the same period in 2024, primarily due to a 3.5 percent increase in average OEC, and a 3.2 percent increase in fleet productivity, which includes the impact of the Yak acquisition. Fleet productivity increased 2.6 percent on a pro forma basis including the pre-acquisition results of Yak for 2024.

Current wording

For the nine months ended September 30, 2025, equipment rentals represented 86 percent of total revenues. For the nine months ended September 30, 2025, equipment rentals of $10.225 billion increased $618, or 6.4 percent, as compared to the same period in 2024, primarily due to a 3.7 percent increase in average OEC, and a 2.8 percent increase in fleet productivity, which includes the impact of the Yak acquisition. Fleet productivity increased 2.5 percent on a pro forma basis including the pre-acquisition results of Yak for 2024.

Previous wording

For the six months ended June 30, 2025, equipment rentals represented 83 percent of total revenues for the general rentals segment. For the six months ended June 30, 2025, general rentals equipment rentals increased $88, or 2.1 percent, as compared to the same period in 2024.

Current wording

For the nine months ended September 30, 2025, equipment rentals represented 84 percent of total revenues for the general rentals segment. For the nine months ended September 30, 2025, general rentals equipment rentals increased $161, or 2.4 percent, as compared to the same period in 2024.

Previous wording

For the six months ended June 30, 2025, equipment rentals represented 92 percent of total revenues for the specialty segment. For the six months ended June 30, 2025, specialty equipment rentals increased $328, or 17.6 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 14.4 percent year-over-year on a pro forma basis including the pre-acquisition results of Yak for 2024.

Current wording

For the nine months ended September 30, 2025, equipment rentals represented 91 percent of total revenues for the specialty segment. For the nine months ended September 30, 2025, specialty equipment rentals increased $457, or 15.2 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 13.3 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 six months ended June 30, 2025, sales of rental equipment represented approximately 9 percent of our total revenues. For the three months ended June 30, 2025, sales of rental equipment decreased $48, or 13.2 percent, primarily due to the normalization of used equipment pricing. For the six months ended June 30, 2025, sales of rental equipment did not change significantly year-over-year.

Current wording

Sales of rental equipment. For the nine months ended September 30, 2025, sales of rental equipment represented approximately 9 percent of our total revenues. For the three and nine months ended September 30, 2025, sales of rental equipment did not change significantly year-over-year.

Previous wording

Sales of new equipment. For the six months ended June 30, 2025, sales of new equipment represented approximately 2 percent of our total revenues. For the three and six months ended June 30, 2025, sales of new equipment increased 23.0 percent and 33.0 percent year-over-year, respectively, primarily due to supply chain normalization.

Current wording

Sales of new equipment. For the nine months ended September 30, 2025, sales of new equipment represented approximately 2 percent of our total revenues. For the three and nine months ended September 30, 2025, sales of new equipment increased 23.4 percent and 29.0 percent year-over-year, respectively, 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 six months ended June 30, 2025, contractor supplies sales represented approximately 1 percent of our total revenues. Contractor supplies sales for the three and six months ended June 30, 2025 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 nine months ended September 30, 2025, contractor supplies sales represented approximately 1 percent of our total revenues. Contractor supplies sales for the three and nine months ended September 30, 2025 did not change significantly 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 six months ended June 30, 2025, service and other revenues represented approximately 2 percent of our total revenues. For the three and six months ended June 30, 2025, 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 nine months ended September 30, 2025, service and other revenues represented approximately 2 percent of our total revenues. For the three and nine months ended September 30, 2025, service and other revenues did not change significantly year-over-year.

Previous wording

General rentals. For the three months ended June 30, 2025, equipment rentals gross profit decreased by $6, and equipment rentals gross margin decreased by 120 basis points year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs.

Current wording

General rentals. For the three months ended September 30, 2025, equipment rentals gross profit increased by $7, and equipment rentals gross margin decreased by 90 basis points year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, particularly in delivery costs.

Previous wording

For the six months ended June 30, 2025, equipment rentals gross profit decreased by $8, and equipment rentals gross margin decreased by 90 basis points year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs.

Current wording

For the nine months ended September 30, 2025, equipment rentals gross profit decreased by $1, and equipment rentals gross margin decreased by 90 basis points year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs.

Previous wording

Specialty. For the three months ended June 30, 2025, equipment rentals gross profit increased by $42, and equipment rentals gross margin decreased by 220 basis points, year-over-year. Gross margin decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs, and higher depreciation expense due, in part, to growth in our matting business, which is primarily comprised of locations acquired in the Yak acquisition. The increase in delivery costs also related in part to repositioning fleet to efficiently support strong demand.

Current wording

Specialty. For the three months ended September 30, 2025, equipment rentals gross profit increased by $2, and equipment rentals gross margin decreased by 490 basis points, year-over-year. Gross margin decreased primarily due to higher depreciation expense due, in part, to growth in our matting business, which is primarily comprised of locations acquired in the Yak acquisition, and inflation and normal cost variability, particularly in delivery costs. The increase in delivery costs also related in part to repositioning fleet to efficiently support strong demand.

Previous wording

For the six months ended June 30, 2025, equipment rentals gross profit increased by $71, and equipment rentals gross margin decreased by 400 basis points, year-over-year. Gross margin decreased primarily due to 1) increased depreciation expense, including the impact of the Yak acquisition and growth in the acquired Yak locations, 2) the impact of a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, and 3) inflation and normal cost variability, particularly in delivery and labor and benefits costs. The increase in delivery costs related in part to repositioning fleet to efficiently support strong demand.

Current wording

For the nine months ended September 30, 2025, equipment rentals gross profit increased by $73, and equipment rentals gross margin decreased by 440 basis points, year-over-year. Gross margin decreased primarily due to 1) increased depreciation expense, including the impact of the Yak acquisition and growth in the acquired Yak locations, 2) inflation and normal cost variability, particularly in delivery costs, and 3) the impact of a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals. The increase in delivery costs also related in part to repositioning fleet to efficiently support strong demand.

Previous wording

For the three months ended June 30, 2025, total gross margin decreased 130 basis points from 2024. Equipment rentals gross margin decreased 130 basis points from 2024, primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs, as well as increased depreciation expense in the specialty segment, all of which are discussed above. Gross margin from sales of rental equipment decreased 130 basis points from 2024, which primarily reflected the 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 June 30, 2025).

Current wording

For the three months ended September 30, 2025, total gross margin decreased 190 basis points from 2024. Equipment rentals gross margin decreased 200 basis points from 2024, primarily due to inflation and normal cost variability, particularly in delivery costs, as well as increased depreciation expense in the specialty segment, all of which are discussed above. Gross margin from sales of rental equipment decreased 110 basis points from 2024, which primarily reflected the 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, 2025).

Previous wording

For the six months ended June 30, 2025, total gross margin decreased 180 basis points from 2024. Equipment rentals gross margin decreased 150 basis points from 2024, primarily due to reduced margins in the specialty segment, as discussed above. Additionally, as discussed above, equipment rentals gross margin for the general rentals segment decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs. Gross margin from sales of rental equipment decreased 300 basis points from 2024, which primarily reflected the 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 six months ended June 30, 2025).

Current wording

For the nine months ended September 30, 2025, total gross margin decreased 180 basis points from 2024. Equipment rentals gross margin decreased 170 basis points from 2024, primarily due to reduced margins in the specialty segment, as discussed above. Additionally, as discussed above, equipment rentals gross margin for the general rentals segment decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs. Gross margin from sales of rental equipment decreased 240 basis points from 2024, which primarily reflected the 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 nine months ended September 30, 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. The year-over-year increase in SG&A expense as a percentage of revenue for the six months ended June 30, 2025 includes the impact of the professional fees associated with the terminated H&E acquisition discussed above.

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 nine months ended September 30, 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. 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 $16 as of June 30, 2025.

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 $14 as of September 30, 2025.

Previous wording

Interest expense, net for the three months ended June 30, 2025 decreased slightly year-over-year, as the impact of decreased variable debt interest rates was partially offset by a slight increase in average debt. The weighted average interest rates on our variable debt instruments were 5.6 percent and 6.6 percent for the three months ended June 30, 2025 and 2024, respectively. Interest expense, net for the six months ended June 30, 2025 increased by 6.6 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 six months ended June 30, 2025 and 2024, respectively.

Current wording

Interest expense, net for the three and nine months ended September 30, 2025 did not change significantly year-over-year, as the impact of decreased variable debt interest rates was offset by slightly increased average debt. The weighted average interest rates on our variable debt instruments were 5.4 percent and 6.4 percent for the three months ended September 30, 2025 and 2024, respectively, and 5.5 percent and 6.5 percent for the nine months ended September 30, 2025 and 2024, respectively. Interest expense, net for the nine months ended September 30, 2025 includes the bridge financing fees associated with the terminated H&E acquisition discussed above.

Previous 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 six months ended June 30, 2025 includes $64 of income associated with the receipt of the break-up fee associated with the terminated H&E acquisition discussed above.

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 nine months ended September 30, 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 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 increases in the effective tax rates for the three and six months ended June 30, 2025 primarily reflected benefits recognized in 2024 associated with decreases to the average state tax rates and changes to tax laws in certain states.

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 nine months ended September 30, 2025 primarily reflected benefits recognized in 2024 associated with decreases to the average state tax rates and changes to tax laws in certain states.

Previous wording

On July 4, 2025, new federal tax legislation (“H.R.1”) was enacted. The primary effects of this legislation include making 100 percent bonus depreciation permanent, the permanent restoration of the ability of taxpayers to immediately expense certain domestic research and experimental expenditures, and the restoration of EBITDA-based interest deduction limitations. In addition, H.R.1 includes international tax provisions, including eliminating the net deemed tangible income return, decreasing the tax rates and taxable income computations applicable to global intangible low-taxed income (“GILTI”) and foreign derived intangible income (“FDII”), and permanently increasing the base erosion and anti-abuse minimum tax (“BEAT”) rate. The potential impact of these changes on our financial statements is currently under evaluation, and the impact on our effective tax rate is not expected to be material in 2025. We currently expect that these provisions will both decrease our 2025 cash income tax liability and increase our deferred tax liability, and we continue to evaluate the provisions of the legislation and its potential effects on our financial position, results of operations, and cash flows. The effects of the legislation will be reflected in our financial statements in the period of enactment (in the third quarter of 2025), and disclosures addressing the financial statement impact will be provided in future periods as the impact of the legislation is determined.

Current wording

On July 4, 2025, new federal tax legislation (“H.R.1”) was enacted. The relevant effects of this legislation include making 100 percent bonus depreciation permanent, the permanent restoration of the ability of taxpayers to immediately expense certain domestic research and experimental expenditures, and the restoration of EBITDA-based interest deduction limitations. In addition, H.R.1 includes international tax provisions, including eliminating the net deemed tangible income return, decreasing the tax rates and taxable income computations applicable to global intangible low-taxed income (“GILTI”) and foreign derived intangible income (“FDII”), and permanently increasing the base erosion and anti-abuse minimum tax (“BEAT”) rate. Upon enactment in the third quarter of 2025, the legislation (i) did not materially impact our effective tax rate, (ii) decreased our cash income tax liability and (iii) increased our deferred tax liability. We continue to evaluate the provisions of the legislation and its potential effects on our financial position, results of operations, and cash flows, and disclosures addressing any material financial statement impact will be provided in future periods as the impact of the legislation is determined.

Previous wording

Balance sheet. Prepaid expenses and other assets increased by $127, or 54.0 percent, from December 31, 2024 to June 30, 2025, primarily due to an increase in income taxes receivable which reflected required tax payments exceeding the estimated tax accruals. Accounts payable increased by $691, or 92.4 percent, from December 31, 2024 to June 30, 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.

Current wording

Balance sheet. Prepaid expenses and other assets increased by $223, or 94.9 percent, from December 31, 2024 to September 30, 2025, primarily due to an increase in income taxes receivable which reflected required tax payments exceeding the estimated tax accruals. Other intangible assets, net decreased by $132, or 19.9 percent, from December 31, 2024 to September 30, 2025, primarily due to amortization of the assets. Accounts payable increased by $528, or 70.6 percent, from December 31, 2024 to September 30, 2025, primarily due to seasonal increases in capital expenditures and business activities. Deferred taxes increased by $286, or 10.7 percent, from December 31, 2024 to September 30, 2025, primarily due to the impact of the H.R.1 tax legislation discussed above. 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 January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, which was completed in the first quarter of 2025. In April 2025, our Board of Directors authorized a new $1.5 billion share repurchase program, and repurchases under this program began in April 2025. We have repurchased $417 under the current $1.5 billion program through June 30, 2025. Subsequent to the enactment of the new federal tax legislation discussed above (see "Results of Operations-Other costs/(income)-effective tax rates”) on July 4, 2025, and with consideration of the expected cash flow benefit associated with the legislation, our Board of Directors approved an increase in the size of the current share repurchase program, from $1.5 billion to $2.0 billion. We intend to repurchase $1.65 billion under the $2.0 billion program in 2025, with the remaining $350 under the 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 $6 year-to-date through June 30, 2025 (the total excise tax amount relates to both the current program and the prior program that was completed in the first quarter of 2025). Since 2012, we have repurchased a total of $8.151 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).

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. In April 2025, our Board of Directors authorized a new $1.5 billion share repurchase program, and repurchases under this program began in April 2025. Subsequent to the enactment of the new federal tax legislation discussed above (see "Results of Operations-Other costs/(income)-effective tax rates”) on July 4, 2025, and with consideration of the expected cash flow benefit associated with the legislation, our Board of Directors approved an increase in the size of the current share repurchase program, from $1.5 billion to $2.0 billion. We have repurchased $1.033 billion under this program through September 30, 2025, and intend to repurchase $1.65 billion under the program in 2025, with the remaining $350 under the program carried into 2026. Including the $250 of repurchases made to complete the prior $1.5 billion share repurchase program, we expect to complete $1.9 billion of repurchases in 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) do not include the excise tax, which totaled $12 year-to-date through September 30, 2025 (the total excise tax amount relates to both the current program and the prior program that was completed in the first quarter of 2025). Since 2012, we have repurchased a total of $8.773 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).