UNITED RENTALS NORTH AMERICA INC

Previous wording

•geopolitical conflicts, such as Russia’s invasion of Ukraine and the conflict in the Middle East, and the resultant sanctions and other measures imposed in response; or

Current wording

•geopolitical conflicts, such as those in Ukraine and Venezuela, and the resultant sanctions and other measures imposed in response; or

Previous wording

At December 31, 2024, our total indebtedness was $13.4 billion (which is expected to increase by approximately $4.9 billion in connection with the pending acquisition of H&E that is discussed in note 19 to the consolidated financial statements, which is expected to close in the first quarter of 2025). Our significant indebtedness could adversely affect our business, results of operations and financial condition in a number of ways by, among other things:

Current wording

At December 31, 2025, our total indebtedness was $14.2 billion. Our significant indebtedness could adversely affect our business, results of operations and financial condition in a number of ways by, among other things:

Previous wording

A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, increases in market interest rates increase our interest expense and our debt service obligations. At December 31, 2024, we had $4.3 billion of indebtedness that bore interest at variable rates. As of December 31, 2024, our variable rate indebtedness represented 32 percent of our total indebtedness. See Item 7A—Quantitative and Qualitative Disclosures about Market Risk for additional information related to interest rate risk.

Current wording

A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, increases in market interest rates increase our interest expense and our debt service obligations. At December 31, 2025, we had $4.1 billion of indebtedness that bore interest at variable rates. As of December 31, 2025, our variable rate indebtedness represented 29 percent of our total indebtedness. See Item 7A—Quantitative and Qualitative Disclosures about Market Risk for additional information related to interest rate risk.

Previous wording

We may be able to incur substantially more debt and take other actions that could diminish our ability to make payments on our indebtedness when due, which could further exacerbate the risks associated with our current level of indebtedness.

Current wording

We may incur substantially more debt and take other actions that could diminish our ability to make payments on our indebtedness when due, which could further exacerbate the risks associated with our current level of indebtedness.

Previous wording

Despite our indebtedness level, we may be able to incur substantially more indebtedness in the future and such indebtedness may be secured indebtedness. The indentures and other agreements governing our current indebtedness permit us to recapitalize our debt or take a number of other actions, any of which could diminish our ability to make payments on our indebtedness when due and further exacerbate the risks associated with our current level of indebtedness. If new debt is added to our or any of our existing and future subsidiaries' current debt, the related risks that we now face could intensify and we may not be able to meet all of our debt obligations.

Current wording

Despite our indebtedness level, we may incur substantially more indebtedness in the future and such indebtedness may be secured indebtedness. The indentures and other agreements governing our current indebtedness permit us to recapitalize our debt or take a number of other actions, any of which could diminish our ability to make payments on our indebtedness when due and further exacerbate the risks associated with our current level of indebtedness. If new debt is added to our or any of our existing and future subsidiaries' current debt, the related risks that we now face could intensify and we may not be able to meet all of our debt obligations.

Previous wording

We rely on our ABL facility and accounts receivable securitization facility to provide liquidity for our business, including to fund capital expenditures, acquisitions, operating expenses and other liquidity needs. The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of December 31, 2024, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility. If we are unable to satisfy the financial covenant under the ABL facility or the financial tests under the accounts receivable securitization facility or comply with any of the other relevant covenants under the applicable agreement, the lenders could elect to terminate the ABL facility and/or the accounts receivable securitization facility and require us to repay outstanding borrowings. In such event, unless we are able to refinance the indebtedness coming due and replace the ABL facility and/or the accounts receivable securitization facility, we would likely not have sufficient liquidity for our business needs and would be forced to adopt an alternative strategy. Even if we adopt an alternative strategy, the strategy may not be successful and we may not have sufficient liquidity to service our debt and fund our operations. Future debt arrangements we enter into may contain similar financial covenant provisions.

Current wording

We rely on our ABL facility and accounts receivable securitization facility to provide liquidity for our business, including to fund capital expenditures, acquisitions, operating expenses and other liquidity needs. The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio. Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility forfive consecutive business days. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of December 31, 2025, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding. The accounts receivable securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL facility, to the extent the ratio is applicable under the ABL facility. If we are unable to satisfy the financial covenant under the ABL facility or the financial tests under the accounts receivable securitization facility or comply with any of the other relevant covenants under the applicable agreement, the lenders could elect to terminate the ABL facility and/or the accounts receivable securitization facility and require us to repay outstanding borrowings. In such event, unless we are able to refinance the indebtedness coming due and replace the ABL facility and/or the accounts receivable securitization facility, we would likely not have sufficient liquidity for our business needs and would be forced to adopt an alternative strategy. Even if we adopt an alternative strategy, the strategy may not be successful and we may not have sufficient liquidity to service our debt and fund our operations. Future debt arrangements we enter into may contain similar financial covenant provisions.

Previous wording

These restrictions may cause us to suspend or cease the payment of dividends. These restrictions may also make more difficult or discourage a takeover of us, whether favored or opposed by our management and/or our Board of Directors.

Current wording

These restrictions may cause us to suspend or cease share repurchases or the payment of dividends. These restrictions may also make more difficult or discourage a takeover of us, whether favored or opposed by our management and/or our board of directors (“Board of Directors”).

Previous wording

The amount of borrowings permitted at any time under our ABL facility and the accounts receivable securitization facility is limited to a periodic borrowing base valuation of the collateral thereunder. As a result, our access to credit under our ABL facility and the accounts receivable securitization facility is potentially subject to significant fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, and, in the case of the ABL facility, certain discretionary rights of the agent in respect of the calculation of such borrowing base value. The inability to borrow under our ABL facility and/or the accounts receivable securitization facility, or limitations on the amounts we can borrow under our ABL facility and/or the accounts receivable securitization facility, may adversely affect our liquidity, results of operations and financial position.

Current wording

In addition to cash we generate from our business, our principal existing sources of funds to support operations and make capital expenditures on equipment and other items are borrowings available under the ABL facility and the accounts receivable securitization facility. The amount of borrowings permitted at any time under the ABL facility and the accounts receivable securitization facility is limited to a periodic borrowing base valuation of the collateral thereunder. Borrowings under the ABL facility are principally supported by pledges of rental equipment, and borrowings under the accounts receivable securitization are principally supported by our accounts receivable. As a result, our access to credit under the ABL facility and the accounts receivable securitization facility is potentially subject to significant fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, and, in the case of the ABL facility, certain discretionary rights of the agent in respect of the calculation of such borrowing base value. If our access to such financing was unavailable or reduced, our liquidity, results of operations and financial position may be adversely affected, which could cause material harm to our business. In addition, if certain of our lenders experience difficulties that render them unable to fund future draws on the facilities, we may not be able to access all or a portion of these funds, which could have similar adverse consequences.

Previous wording

We have historically achieved a significant portion of our growth through acquisitions and we will continue to consider potential acquisitions on a selective basis. From time to time we have also approached, or have been approached by, other public companies or large privately-held companies to explore consolidation opportunities. The pending acquisition of H&E that is discussed in note 19 to the consolidated financial statements, which is expected to close in the first quarter of 2025, is an example of our strategy of growth through acquisitions. There can be no assurance that we will be able to identify suitable acquisition opportunities in the future or that we will be able to consummate any such transactions on terms and conditions acceptable to us.

Current wording

We have historically achieved a significant portion of our growth through acquisitions and we will continue to consider potential acquisitions on a selective basis. From time to time we have also approached, or have been approached by, other public companies or large privately-held companies to explore consolidation opportunities. There can be no assurance that we will be able to identify suitable acquisition opportunities in the future or that we will be able to consummate any such transactions on terms and conditions acceptable to us.

Previous wording

Our failure to address these risks or other problems encountered in connection with any past or future acquisitions, including the pending acquisition of H&E, could cause us to fail to realize the anticipated benefits of the acquisitions over the timeframe we expect, or at all, cause us to incur unanticipated liabilities or harm our existing operations or our business generally. In addition, if we are unable to successfully integrate our acquisitions with our existing business, we may not obtain the advantages that the acquisitions were intended to create, which may materially and adversely affect our business, results of operations, financial condition, cash flows, our ability to introduce new services and products and the market price of our stock.

Current wording

Our failure to address these risks or other problems encountered in connection with any past or future acquisitions could cause us to fail to realize the anticipated benefits of the acquisitions over the timeframe we expect, or at all, cause us to incur unanticipated liabilities or harm our existing operations or our business generally. In addition, if we are unable to successfully integrate our acquisitions with our existing business, we may not obtain the advantages that the acquisitions were intended to create, which may materially and adversely affect our business, results of operations, financial condition, cash flows, our ability to introduce new services and products and the market price of our stock.

Previous wording

We would expect to pay for any future acquisitions using cash, capital stock, net proceeds from the issuance of notes, borrowings under our credit facilities and/or assumption of indebtedness. For example, financing for our pending acquisition of H&E may include the issuance of debt securities and/or term loan borrowings, in addition to borrowings under our existing ABL facility. To the extent that our existing sources of cash are not sufficient, we would expect to need additional debt or equity financing, which involves its own risks, such as the dilutive effect on shares held by our stockholders if we financed acquisitions by issuing convertible debt or equity securities, or the risks associated with debt incurrence.

Current wording

We would expect to pay for any future acquisitions using cash, capital stock, net proceeds from the issuance of notes, borrowings under our credit facilities and/or assumption of indebtedness. To the extent that our existing sources of cash are not sufficient, we would expect to need additional debt or equity financing, which involves its own risks, such as the dilutive effect on shares held by our stockholders if we financed acquisitions by issuing convertible debt or equity securities, or the risks associated with debt incurrence.

Previous wording

At December 31, 2024, we had $6.9 billion of goodwill on our consolidated balance sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations. We assess potential impairment of our goodwill at least annually. Impairment may result from significant changes in the manner of use of the acquired assets, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results. For a discussion of our goodwill impairment testing, see “Critical Accounting Policies-Evaluation of Goodwill Impairment” in Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Current wording

At December 31, 2025, we had $7.1 billion of goodwill on our consolidated balance sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations. We assess potential impairment of our goodwill at least annually. Impairment may result from significant changes in the manner of use of the acquired assets, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results. For a discussion of our goodwill impairment testing, see “Critical Accounting Policies-Evaluation of Goodwill Impairment” in Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

•expectations regarding our share repurchase program;

Current wording

•expectations regarding our share repurchase programs and the amount of share repurchases thereunder;

Previous wording

We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term stockholder value. Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.

Current wording

Share repurchases could increase the volatility of the price of our common stock and could diminish our cash reserves.

Previous wording

Although the Board of Directors has authorized the share repurchase program, the share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. The timing and amount of repurchases, if any, will depend upon several factors, including market and legislative conditions, the trading price of the Company’s common stock and the nature of other investment opportunities. For example, the Inflation Reduction Act imposes a one percent tax on stock repurchases, subject to certain adjustments, by publicly traded U.S. companies, including us, and may impact our decision to engage in share repurchases. Also, our ability to repurchase shares of stock may be limited by restrictive covenants in our debt agreements. The repurchase program may be limited, suspended or discontinued at any time without prior notice. In addition, repurchases of our common stock pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth, to continue to pay a dividend and to pursue possible future strategic opportunities and acquisitions. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of stock. Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness.

Current wording

Repurchases of our common stock pursuant to our share repurchase programs could affect our stock price and increase its volatility. The existence of share repurchase programs could cause our stock price to be higher than it would be in the absence of such programs and could potentially reduce the market liquidity for our stock. Additionally, our share repurchase programs could diminish our cash reserves, which may impact our ability to finance future growth, to continue to pay a dividend and to pursue possible future strategic opportunities and acquisitions. Although our share repurchase programs are intended to enhance long-term stockholder value, there is no assurance that they will do so and short-term stock price fluctuations could reduce the effectiveness of the programs.

Previous wording

Disruptions in our or our third-party vendors’ information technology systems could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives or support our online ordering system.

Current wording

Disruptions in our information technology systems, or those of our third-party vendors, could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives or support our online ordering system.

Previous wording

We rely on the continuous and uninterrupted performance of our and our third-party vendors’ information technology systems to be able to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and support our online ordering system. These systems may be subject to interruptions due to technological errors, bugs, defects or vulnerabilities, system capacity constraints, human errors, computer or communications failures, power loss, disruptions during upgrades or replacements of software or hardware or integrations of acquired businesses systems, adverse acts of nature and other unexpected events. Disruptions to our customers’ information technology systems could also adversely impact us. Any disruptions in these systems or the failure of these systems to operate as expected have in the past adversely affected, and could in the future adversely affect, our ability to access and use certain applications and could, depending on the nature and magnitude of the problem, adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and service online orders. Although such disruptions and failures have not been material to date, we cannot guarantee that they will not be material in the future.

Current wording

We rely on the continuous and uninterrupted performance of our information technology systems, and those of our third-party vendors, to be able to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and support our online ordering system. These systems may be subject to interruptions due to technological errors, bugs, defects or vulnerabilities, system capacity constraints, human errors, computer or communications failures, power loss, disruptions during upgrades or replacements of software or hardware or integrations of acquired businesses systems, adverse acts of nature and other unexpected events. Disruptions to our customers’ information technology systems could also adversely impact us. Any disruptions in these systems or the failure of these systems to operate as expected have in the past adversely affected, and could in the future adversely affect, our ability to access and use certain applications and could, depending on the nature and magnitude of the problem, adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and service online orders. Although such disruptions and failures have not been material to date, we cannot guarantee that they will not be material in the future.

Previous wording

We depend on the security of our and our third-party vendors’ information technology systems to support numerous business processes and activities, including our online ordering system. There are numerous cybersecurity risks to these systems, including individual and group criminal hackers, industrial espionage, man-in-the-middle and denial of service attacks, viruses, malicious software (malware), employee error or malfeasance and phishing attacks. We also face cybersecurity risks due to our reliance on internet technology and hybrid work arrangements, which could strain our technology resources or create additional opportunities for cybercriminals to exploit vulnerabilities. Cyber threats are constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting and successfully defending against them. Successful breaches could, among other things, disrupt our operations, jeopardize the security of information stored in or transmitted by the sites, networks and systems, which include cloud-based networks and data center storage, or result in the unauthorized disclosure, theft and misuse of company, customer, and employee sensitive and confidential information. If this were to occur, we could be in violation of applicable privacy, data security and other laws, subjected to regulatory enforcement actions and private litigation, and our reputation and financial performance may be adversely affected.

Current wording

We depend on the security of our information technology systems, and those of our third-party vendors, to support numerous business processes and activities, including our online ordering system. There are numerous cybersecurity risks applicable to these systems, including individual and group criminal hackers, industrial espionage, man-in-the-middle and denial of service attacks, viruses, malicious software (malware), employee error or malfeasance and phishing attacks. We also face cybersecurity risks due to our reliance on internet technology and hybrid work arrangements, which could strain our technology resources or create additional opportunities for cybercriminals to exploit vulnerabilities. Cyber threats are constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting and successfully defending against them. Successful breaches could, among other things, disrupt our operations, jeopardize the security of information stored in or transmitted by the sites, networks and systems, which include cloud-based networks and data center storage, or result in the unauthorized access, disclosure, theft and misuse of company, customer, and employee sensitive and confidential information. If this were to occur, we could be in violation of applicable privacy, data security and other laws, subjected to regulatory enforcement actions and private litigation, and our reputation and financial performance may be adversely affected.

Previous wording

Although we employ security measures to protect our data and systems, and, to our knowledge, so do our third-party vendors, these measures have in the past not detected or prevented, and may in the future not detect or prevent, all attempts to infiltrate our systems. We have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks, which have led, and could in the future lead to, disruptions in our online ordering or other systems, or the unauthorized release of confidential or otherwise protected information or corruption of data. We continuously develop and enhance our controls, processes and practices to protect our systems, computers, software, data and networks from attack, damage, vulnerabilities or unauthorized access. This continued development and enhancement requires us to expend significant resources. However, we may not anticipate or combat all types of future attacks until after they have been launched, and there is no guarantee that the measures we take will be adequate to safeguard against all threats. If any of these breaches of security occur or are anticipated in the future, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. Our response to attacks, and our investments in our technology and our controls, processes and practices, may not be sufficient to shield us from significant losses or liability. Further, given the increasing sophistication of bad actors and complexity of the techniques used to obtain unauthorized access or disable systems, a breach or attack could potentially persist for an extended period of time before being detected. As a result, we may not be able to anticipate the attack or respond adequately or timely, and the extent of a particular incident, and the steps that we may need to take to investigate the incident, may not be immediately clear. It could take a significant amount of time before an investigation can be completed and full, reliable information about the incident becomes known. During an investigation, it is possible we may not necessarily know the extent of the harm or how to remediate it, which could further adversely impact us, and new regulations could result in us being required to disclose information about a material cybersecurity incident before it has been mitigated or resolved, or even fully investigated. Certain of our software applications are also hosted by third parties who provide outsourced administrative functions, which may increase the risk of a cybersecurity incident. Any compromise or breach of our systems could result in adverse publicity, harm our reputation, lead to claims against us and affect our relationships with our customers and employees, any of which could have a material adverse effect on our business. Although we maintain insurance cove…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Although we employ security measures designed to protect our data and systems, and, to our knowledge, so do our third-party vendors, these measures have in the past not detected or prevented, and may in the future not detect or prevent, all attempts to infiltrate our systems. We have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks, which have led, and could in the future lead to, disruptions in our online ordering or other systems, or the unauthorized release of confidential or otherwise protected information or corruption of data. We continuously develop and enhance our controls, processes and practices that are designed to protect our systems, computers, software, data and networks from attack, damage, vulnerabilities or unauthorized access. This continued development and enhancement requires us to expend significant resources. However, we may not anticipate or combat all types of future attacks until after they have been launched, and there is no guarantee that the measures we take will be adequate to safeguard against all threats. If any of these breaches of security occur or are anticipated in the future, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. Our response to attacks, and our investments in our technology and our controls, processes and practices, may not be sufficient to shield us from significant losses or liability. Further, given the increasing sophistication of bad actors and complexity of the techniques used to obtain unauthorized access or disable systems, a breach or attack could potentially persist for an extended period of time before being detected. As a result, we may not be able to anticipate the attack or respond adequately or timely, and the extent of a particular incident, and the steps that we may need to take to investigate the incident, may not be immediately clear. It could take a significant amount of time before an investigation can be completed and full, reliable information about the incident becomes known. During an investigation, it is possible we may not necessarily know the extent of the harm or how to remediate it, which could further adversely impact us, and applicable regulations could result in us being required to disclose information about a material cybersecurity incident before it has been mitigated or resolved, or even fully investigated. Certain of our software applications are also hosted by third parties who provide outsourced administrative functions, which may increase the risk of a cybersecurity incident. Any compromise or breach of our systems could result in adverse publicity, harm our reputation, lead to claims against us and affect our relationships with our customers and employees, any of which could have a material adverse effect on our business an…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As severe weather events and other natural occurrences become increasingly common, our or our customers’ operations may be disrupted, which could result in increased operational costs or reduced demand for our products and services, and the increased incidence of severe weather and other natural occurrences may also reduce the availability or increase the cost of insurance for such events. In addition, severe weather events and other natural occurrences may impact the global economy, including as a result of disruptions to supply chains. While we have invested in the administration of programs and physical loss prevention improvements to mitigate the risk of natural disasters causing disruption to our ability to serve our customers and communities in times of need, extended periods of disruptions could have an adverse effect on our results of operations. We anticipate that these risks will increase over time.

Current wording

As severe weather events and other natural occurrences become increasingly common, our or our customers’ operations may be disrupted, which could result in increased operational costs or reduced demand for our products and services, and the increased incidence of severe weather and other natural occurrences may also reduce the availability or increase the cost of insurance for such events. In addition, severe weather events and other natural occurrences may impact the global economy, including as a result of disruptions to supply chains. While we have invested in the administration of programs and physical loss prevention improvements to mitigate the risk of natural disasters causing disruption to our ability to serve our customers and communities in times of need, extended periods of disruptions could have an adverse effect on our results of operations.

Previous wording

Our specialty reportable segment has accounted for an increasing portion of our business and revenues in recent years. Specialty segment revenues constituted 29.3 percent of our revenues for the year ended December 31, 2024, as compared to 7.3 percent of our revenues for the year ended December 31, 2013. In connection with the expansion of the specialty segment, we have expanded the scope of services we provide to customers; for example, we advise customers on the compatibility of our equipment with various applications, collaborate and consult with customers on certain aspects of civil construction projects, design and erect scaffolding, and design electrical pump systems. To the extent we engage in those and other similar activities, we have faced, and will continue to face, increased legal, reputational and operational risks. These new or expanded business activities also expose us to new or different types of risks, including risks related to spills, unauthorized use of equipment, system failure, ineffectiveness of the solutions and products we provide, and hazardous material issues and interference. We have been, and may in the future be, subject to various claims in connection with these activities and services, and the associated risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time, particularly as we engage in new business activities where we do not have historical experience. Although we have insurance to protect ourselves against claims in connection with these activities, we cannot guarantee that any insurance coverage will be sufficient or that we will continue to be able to obtain such coverage at reasonable rates or at all. See also “We are exposed to a variety of claims relating to our business, and our insurance may not fully cover them.”

Current wording

Our specialty reportable segment has accounted for an increasing portion of our business and revenues in recent years. Specialty segment revenues constituted 31.7 percent of our revenues for the year ended December 31, 2025, as compared to 7.3 percent of our revenues for the year ended December 31, 2013. In connection with the expansion of the specialty segment, we have expanded the scope of services we provide to customers; for example, we advise customers on the compatibility of our equipment with various applications, collaborate and consult with customers on certain aspects of civil construction projects, design and erect scaffolding, and design electrical pump systems. To the extent we engage in those and other similar activities, we have faced, and will continue to face, increased legal, reputational and operational risks. These new or expanded business activities also expose us to new or different types of risks, including risks related to spills, unauthorized use of equipment, system failure, ineffectiveness of the solutions and products we provide, and hazardous material issues and interference. We have been, and may in the future be, subject to various claims in connection with these activities and services, and the associated risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time, particularly as we engage in new business activities where we do not have historical experience. Although we have insurance to protect ourselves against claims in connection with these activities, we cannot guarantee that any insurance coverage will be sufficient or that we will continue to be able to obtain such coverage at reasonable rates or at all. See also “We are exposed to a variety of claims relating to our business, and our insurance may not fully cover them.”

Previous wording

Our 1,433 branch locations in the United States are located in 49 states, and Puerto Rico, which exposes us to a host of different state and local regulations, in addition to federal law and regulatory and contractual requirements we face as a government contractor. These laws and requirements address multiple aspects of our operations, such as employee safety, consumer rights, privacy, employee benefits and more. In addition, there are often different and potentially conflicting requirements in different jurisdictions. Changes in these requirements, or any material failure by our branches to comply with them, can increase our costs, affect our reputation, limit our business, drain management time and attention and otherwise impact our operations in adverse ways.

Current wording

Our 1,494 branch locations in the United States are located in 49 states, and Puerto Rico, which exposes us to a host of different state and local regulations, in addition to federal law and regulatory and contractual requirements we face as a government contractor. These laws and requirements address multiple aspects of our operations, such as employee safety, consumer rights, privacy, employee benefits and more. In addition, there are often different and potentially conflicting requirements in different jurisdictions. Changes in these requirements, or any material failure by our branches to comply with them, can increase our costs, affect our reputation, limit our business, drain management time and attention and otherwise impact our operations in adverse ways.

Previous wording

We currently have approximately 1,800 employees who are represented by unions and covered by collective bargaining agreements and approximately 26,100 employees who are not represented by unions. Various unions occasionally seek to organize certain of our nonunion employees. Union organizing efforts or collective bargaining negotiations could potentially lead to work stoppages and/or slowdowns or strikes by certain of our employees, which could adversely affect our ability to serve our customers. Further, settlement of actual or threatened labor disputes or an increase in the number of our employees covered by collective bargaining agreements can have unknown effects on our labor costs, productivity and flexibility.

Current wording

We currently have approximately 1,800 employees who are represented by unions and covered by collective bargaining agreements and approximately 26,700 employees who are not represented by unions. Various unions occasionally seek to organize certain of our nonunion employees. Union organizing efforts or collective bargaining negotiations could potentially lead to work stoppages and/or slowdowns or strikes by certain of our employees, which could adversely affect our ability to serve our customers. Further, settlement of actual or threatened labor disputes or an increase in the number of our employees covered by collective bargaining agreements can have unknown effects on our labor costs, productivity and flexibility.