Sunbelt Rentals Holdings, Inc.

1. Organization and Description of Business

Sunbelt Rentals Holdings, Inc. (including subsidiaries, the “Company” or “Sunbelt”) (NYSE: SUNB; LSE: SUNB) was formed as a Delaware corporation in February 2025. Sunbelt is an international equipment rental company with national networks in the United States (“U.S.”), Canada and the United Kingdom (“U.K.”). The Company rents a broad range of construction, industrial, general and specialty equipment across a wide variety of applications to a wide customer base.

In the current period, these condensed consolidated financial statements reflect the effects of the new corporate structure with Sunbelt Rentals Holdings, Inc. as the ultimate parent company. For periods prior to February 27, 2026 (the “Effective Date”), these condensed consolidated financial statements reflect the historical results, assets, liabilities and cash flows of Ashtead Group Limited and its subsidiaries as the accounting predecessor. “Sunbelt,” “we,” “us” and “our” for periods prior to the Effective Date refer to Ashtead Group plc and its consolidated subsidiaries, and references for periods on or after the Effective Date refer to Sunbelt Rentals Holdings, Inc. and its consolidated subsidiaries.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) with respect to interim financial information. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the fiscal year ended April 30, 2026, included in the Annual Report on Form 10-K filed by the Company with the SEC on June 23, 2026.

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary for the fair statement of the Company's condensed consolidated financial statements for the interim periods presented. The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include, but are not limited to, allowance for credit losses, useful lives, salvage values and impairment of rental equipment, income taxes, business combinations, and goodwill impairment. Actual results could materially differ from those estimates.

Recently Issued Accounting Pronouncements

Adopted

Credit Losses. In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments – Credit Losses: Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”), which provides optional guidance relating to the estimation of expected credit losses on current accounts receivable and current contract assets. This guidance permits entities to elect a practical expedient under which conditions as of the balance sheet date are assumed to remain unchanged for the remaining life of the asset. We have elected this practical expedient in applying the guidance. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. We have adopted this guidance, which did not have a material impact on our financial statements.

Not Yet Adopted

Expense Disaggregation Disclosure. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic

220-40),” which improves the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative, and research and development. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The amendments in this ASU can be applied prospectively or retrospectively and early adoption is permitted. This standard is not expected to have an impact on any amounts recognized in our financial statements, but will result in more detailed disclosures addressing the categorization of expenses.

Internal Use Software. In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development. This ASU is effective for fiscal years beginning after December 15, 2027 and early adoption is permitted. The amendments in this ASU can be applied prospectively, retrospectively, or with a modified transition approach. The Company is evaluating the effect of adopting this new accounting guidance.

Accounting for Government Grants. In December 2025, the FASB issued Accounting Standards Update No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”) to establish authoritative guidance in U.S. GAAP for the recognition, measurement, presentation and disclosure of government grants received by for-profit entities. The guidance is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period. ASU 2025-10 should be applied utilizing a retrospective approach, or a modified transition approach. The Company is evaluating the effect of adopting this new accounting guidance.

3. Revenue Recognition

Sunbelt is principally engaged in the business of renting equipment. Ancillary to Sunbelt’s principal equipment rental business, Sunbelt also sells used rental equipment, new equipment and merchandise and consumables and offers certain services to support its customers. Sunbelt’s rental transactions are accounted for under ASC Topic 842, Leases (“Topic 842”), while the sale of rental and new equipment, merchandise and consumables, along with certain services provided to customers, are recognized under ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). Sales and other tax amounts collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue.

Nature of goods and services

In the following table, revenue is summarized by type and by the applicable accounting standard.

Revenues by reportable segment are presented in Note 5 of the condensed consolidated financial statements, using the revenue captions reflected in our condensed consolidated statements of income.

Lease revenues (Topic 842):

Equipment rentals revenue

The Company offers a broad portfolio of equipment for rent. Equipment rentals revenue includes revenue generated from renting equipment to customers and is recognized on a straight-line basis over the length of the rental contract. These lease contracts are operating leases under Topic 842. As the rental contracts can extend across reporting periods, the Company records unbilled rental revenues and deferred revenues at the end of reporting periods to ensure rental revenues earned is appropriately stated for the periods presented. Receivables from unbilled rental revenue is included in “Prepaid expenses and other assets” was $182 million and $144 million as of July 31, 2026 and April 30, 2026, respectively. Deferred revenue is included in “Accrued expenses and other liabilities” in the condensed consolidated balance sheet and was $141 million and $99 million as of July 31, 2026 and April 30, 2026, respectively.

Also included in equipment rentals revenue is re-rent revenue, in which the Company will rent specific pieces of equipment from vendors and then re-rent that equipment to its customers. Provisions for discounts, rebates to customers and other adjustments are provided for in the period the related revenue is recorded.

Other

Other equipment rentals revenue is primarily comprised of fees for the Company’s loss damage waiver and environmental charges. Fees paid for the loss damage waiver allow customers to limit the risk of financial loss in the event the Company’s equipment is damaged or lost. Fees for the loss damage waiver and environmental recovery fees are recognized on a straight-line basis over the length of the rental contract.

Revenues from contracts with customers (Topic 606)

Delivery and pick-up

Rental delivery and collection revenue is recognized when the services are performed at the time of delivery or collection, respectively, and the performance obligation is therefore fulfilled.

Other rental revenue

Other equipment rentals revenues primarily include the consumption of fuel by our customers, erection and dismantling services provided and other ancillary services provided in connection with the rental equipment. The Company recognizes revenue as the services are provided.

Sales of rental equipment, new equipment, merchandise and consumables

Sales revenue is recognized when control of the asset transfers to the customer, which is typically when the asset is picked up by, or delivered to, the customer and when significant risks and rewards of ownership have passed to the customer. The Company routinely sells its used rental equipment in order to manage repair and maintenance costs, as well as the composition, age and size of its fleet. The Company disposes of used equipment through a variety of channels including retail sales to customers and other third parties, sales to wholesalers, brokered sales and auctions. Sales of rental equipment in connection with trade-in arrangements with certain manufacturers from whom the Company purchases new equipment is accounted for at the lower of transaction value or fair value based on independent appraisals. If the trade-in price of a unit of equipment exceeds the fair market value of that unit, the excess is accounted for as a reduction of the cost of the related purchase of new rental equipment.

The Company also sells new equipment, parts and supplies. The types of new equipment that the Company sells vary by location and include a variety of tools and supplies, small equipment, safety supplies and consumables. Also included in sales of new equipment, merchandise and consumables are other revenues earned from equipment management and similar services for rental customers. The Company recognizes the other revenue as the services are provided.

Contract Assets and Liabilities

The Company does not have material contract assets or contract liabilities associated with customer contracts. The Company's contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. The Company did not recognize material revenue during the three months ended July 31, 2026 or 2025 that was included in the contract liability balance as of the beginning of each period.

Performance Obligations

Most of the Company's revenue recognized under Topic 606 is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, the Company does not generally recognize a significant amount of revenue from performance obligations satisfied in previous periods, and the amounts of such revenue recognized during the three months ended July 31, 2026 and 2025 was not material. The Company also does not expect to recognize material revenue in the future related to performance obligations that were unsatisfied as of July 31, 2026.

Payment terms

The Topic 606 revenues do not include material amounts of variable consideration. The credit periods offered to customers vary according to the credit risk profiles of, and the invoicing conventions established in, the Company’s markets. The contractual terms on invoices issued to customers vary between North America and the U.K., in that invoices issued in the U.K. are generally payable within 30-60 days whereas invoices issued in North America are generally payable within 30 days. The contracts do not include a significant financing component.

Contract estimates and judgments

The revenues accounted for under Topic 606 do not require significant estimates or judgments, primarily for the following reasons:

•The transaction price is generally fixed and stated on the Company’s contracts;

•As noted above, the Company’s contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation;

•The revenues do not include material amounts of variable consideration; and

•Most of the Company’s revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, the Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer.

The revenues accounted for under Topic 842 also do not require significant estimates or judgments.

Allowance for Credit Losses

As shown above, most of the Company's equipment rentals revenue is accounted for under Topic 842. The customers that are responsible for the remaining equipment rentals revenue that is accounted for under Topic 606 are generally the same customers that rent the Company's equipment. Concentration of credit risk with respect to the Company's accounts receivable is limited because a large number of geographically diverse customers makes up its customer base.

The Company manages credit risk associated with its accounts receivable at the customer level through credit approvals, credit limits and other monitoring procedures. The Company maintains allowances for credit losses that reflect the Company's estimate of the amount of receivables that the Company will be unable to collect based on its historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability.

The roll-forward of the allowance for credit losses is shown below.

4. Acquisitions

The Company undertakes bolt-on acquisitions to complement its organic growth strategy.

2026 Acquisitions

During the three months ended July 31, 2026, the Company completedtwo acquisitions, consisting oftwo North America - Specialty acquisitions, both of which were individually immaterial. The aggregate cash consideration for the acquisitions was $669 million. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as we complete our analysis of the fair values at the date of the acquisition during the measurement period, not to exceed one year as permitted under Topic 805.

(1)Accounts receivable had an estimated fair value of $33 million and a gross contractual value of $35 million. The difference represents the Company's best estimate of the contractual cash flows that will not be collected.

The above table is inclusive of measurement period adjustments made during the three months ended July 31, 2026 for prior period acquisitions which resulted in a $2 million increase to net assets acquired and a $2 million increase in goodwill.

The following table reflects the fair values and weighted average useful lives of the acquired intangible assets identified based on the purchase accounting assessments:

The goodwill recognized in connection with the acquisitions completed during the three months ended July 31, 2026 was allocated entirely to the North America - Specialty segment. The goodwill arising can be attributed to the key management personnel and workforce of the acquired businesses, to the benefits through advancing the clusters and leveraging cross-selling opportunities, and to the synergies and other benefits Sunbelt expects to derive from the acquisitions. The synergies and other benefits include eliminating duplicate costs, improving utilization of the acquired rental fleet, and using Sunbelt’s financial strength to invest in the acquired business and drive improved returns through a semi-fixed cost base and the application of Sunbelt’s proprietary software to optimize revenue opportunities. The goodwill expected to be deductible for income tax purposes is $319 million.

Due to the post‑acquisition integration of the acquired businesses, including the transfer of rental equipment between locations, investment in rental fleet, consolidation of certain operations, and shared servicing of customers across locations, the Company determined it is impracticable to separately quantify the acquirees’ revenue and earnings since their respective acquisition dates.

The revenue and net income of these acquisitions from May 1, 2026 to their date of acquisition was not material.

2025 Acquisitions

During the three months ended July 31, 2025, the Company completedtwo acquisitions, consisting ofone North America - General Tool acquisition andone North America - Specialty acquisition, each of which was individually immaterial. The aggregate cash consideration for the acquisitions was $29 million. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. The purchase price was preliminarily allocated based on information available at the acquisition date and adjusted during the measurement period, not to exceed one year as permitted under Topic 805, as we completed our analysis of the fair values. No material measurement-period adjustments were recorded upon finalization of the purchase price allocations, during the three months ended July 31, 2025.

(1)Accounts receivable had an estimated fair value of $1 million and a gross contractual value of $1 million.

The above table is inclusive of measurement period adjustments made during the three months ended July 31, 2025 for prior period acquisitions which resulted in a $6 million increase to net assets acquired and a $6 million decrease in goodwill.

The following table reflects the fair values and useful lives of the acquired intangible assets identified based on the purchase accounting assessments:

The goodwill arising can be attributed to the key management personnel and workforce of the acquired businesses, to the benefits through advancing the clusters and leveraging cross-selling opportunities, and to the synergies and other benefits Sunbelt expects to derive from the acquisitions. The synergies and other benefits include elimination of duplicate costs, improving utilization of the acquired rental fleet, using Sunbelt’s financial strength to invest in the acquired business and drive improved returns through a semi-fixed cost base and the application of Sunbelt’s proprietary software to optimize revenue opportunities. The goodwill expected to be deductible for income tax purposes is $17 million.

Due to the post‑acquisition integration of the acquired businesses, including the transfer of rental equipment between locations, investment in rental fleet, consolidation of certain operations, and shared servicing of customers across locations, the Company determined it is impracticable to separately quantify the acquirees’ revenue and earnings since their respective acquisition dates.

The revenue and net income of these acquisitions from May 1, 2025 to their date of acquisition was not material.

5. Segment Information

Sunbelt operates with the following three reportable and operating segments: North America – General Tool, North America – Specialty and U.K., which are consistent with how Sunbelt’s chief operating decision maker ("CODM") assesses performance and allocates resources. The operating segments are determined primarily based on the nature of the products and services and the management structure of the Company. The Company’s CODM has been identified as its chief executive officer.

North America – General Tool

The North America – General Tool segment includes the rental of general construction and industrial equipment, such as mobile elevating platforms, forklifts, earth moving equipment and general tool and light equipment. The segment operates predominantly across the U.S. and Canada.

North America – Specialty

The North America – Specialty segment focuses on products with comparatively low rental penetration including Power & HVAC, Scaffold, Pump, Film & TV and Climate Control. The Specialty products and services are often a natural add-on to the General Tool products and services. The segment operates across the U.S. and Canada.

United Kingdom

The U.K. segment operates predominantly in the U.K. and rents a broad range of construction, industrial, general and specialty equipment.

The Company manages debt, its lease portfolio and taxation centrally, rather than by operating segments. Accordingly, segmental costs are stated excluding the impact of Topic 842 lease accounting in relation to Sunbelt’s property leases. Furthermore, segment results are stated before interest and taxation which are reported as central cost items. This is consistent with the way the CODM reviews the business.

Segment performance and resource allocation are evaluated by the CODM using adjusted segment operating profit. The CODM is the primary individual in control of resource allocation. The most significant allocation determinations made by the CODM using the adjusted segment operating profit relates to purchases of rental equipment, and these determinations are generally made as part of the annual budgeting process, with regular financial and operational performance reviews occurring throughout the year that can result in allocation changes (for example, if a specific segment outperforms its plan, that could result in a reallocation of resources between segments or an increase in the total allocated resources).

There are no material sales between the reportable segments. Capital expenditure represents additions to rental equipment, property and equipment, and includes additions through the acquisition of businesses. Segment assets exclude corporate assets, such as cash and cash equivalents, corporate facilities, goodwill, other intangible assets, and tax assets.

The following table sets forth financial information by segment for the three months ended July 31, 2026 and 2025 and as of July 31, 2026 and April 30, 2026:

(1)Staff costs are comprised of salaries, related benefits and retirement costs.

(2)Other segment items are comprised of spares, vehicle, facility and other miscellaneous costs.

(3)Central costs comprise of corporate costs incurred to run the business as a whole including costs associated with Sunbelt’s support functions, technology expenditure and the accounting adjustment to reflect ASC 842 lease accounting in relation to Sunbelt’s property leases, as well as other items not allocated to segments, including other expense (income), net. This also includes non-recurring costs related to the operational restructure of the United Kingdom segment and the Redomiciliation.

6. Income Taxes

Sunbelt recorded income tax expense, based upon the estimated annual effective tax rate as adjusted for discrete items, if any, of $153 million on pre-tax book income of $591 million, and $135 million on pre-tax book income of $508 million for the three months ended July 31, 2026 and 2025, respectively. This led to an effective tax rate of 26% and 27% for the three months ended July 31, 2026 and 2025, respectively.

7. Inventory

Inventory consists of the following:

8. Rental Equipment, net

Rental equipment consists of the following:

Amounts due but unpaid for purchases of rental equipment was $607 million and $387 million as of July 31, 2026 and April 30, 2026, respectively. These balances are included in “Accounts payable” and “Accrued expenses and other liabilities” in the consolidated balance sheet. Amounts receivable but unpaid for sales of rental equipment was $127 million and $122 million as of July 31, 2026 and April 30, 2026, respectively. These balances are included in “Accounts receivable, net of allowance for credit losses.”

9. Debt

Debt, net of unamortized original issue premiums and unamortized debt issuance costs, consists of the following:

(1) Short-term portion includes outstanding amounts under 1.500% senior notes, due August 2026, which were repaid subsequent to the balance sheet date.

First priority senior secured credit facility

As of July 31, 2026, $4,750 million was committed by the senior lenders under the asset-based senior secured revolving credit facility (“ABL Facility”) until November 2029. The amount utilized was $1,217 million (including letters of credit totaling $4 million). The ABL Facility is secured by a first priority security interest in substantially all of the assets of the Company and its material U.S., U.K., and Canadian subsidiaries, subject to customary exceptions. Pricing for the $4,750 million revolving credit facility is based on average availability according to a grid, varying from the applicable interest rate plus 125 basis points to 137.5 basis points. The applicable interest rate is based on Secured Overnight Financing Rate (“SOFR”) for U.S. dollar loans, Canadian Overnight Repo Rate Average (“CORRA”) for Canadian dollar loans and Sterling Overnight Interbank Average (“SONIA”) for sterling loans. The borrowing rate was the applicable interest rate plus 125 basis points and the weighted average interest rate was 4.692% and 4.718% as of July 31, 2026 and April 30, 2026, respectively.

The only financial performance covenant under the ABL Facility is a fixed charge ratio (comprising last 12-month (“LTM”) earnings before interest, taxes, depreciation and amortization (“EBITDA”) before exceptional items less LTM net capital expenditure paid in cash over the sum of scheduled debt repayments plus cash interest, cash tax payments and dividends paid in the last 12 months) which must be equal to or greater than 1.0 times.

This covenant does not, however, apply when excess availability (the difference between the borrowing base and facility utilization, taking into account borrowing base amounts in excess of the revolving commitments, subject to certain limitations) exceeds $475 million. Excess availability under the ABL Facility for covenant purposes was $3,750 million and $3,540 million as of July 31, 2026 and April 30, 2026, respectively, meaning that the covenant was not measured for the periods presented and is unlikely to be measured in the forthcoming quarters.

Senior Notes

Senior notes are guaranteed by the Company and substantially all of the Company's material direct and indirect subsidiaries, other than Ashtead Capital, Inc. ("Ashtead Capital"), the issuer for senior notes issued prior to April 30, 2026. The principal terms of the Company's senior notes, including guarantees, ranking, covenants and redemption features, are unchanged from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2026 and are incorporated herein by reference.

During the period, the Company issued two new series of senior notes, as a result of which, as of July 31, 2026, the Company hadeleven series of senior notes outstanding. The new notes issued during the period are described below.

$450 million 4.950% senior notes due 2030. On July 14, 2026, the Company issued $450 million principal amount of 4.950% Senior Notes which are due August 12, 2030. Interest on the notes is payable on February 12 and August 12 of each year, beginning on February 12, 2027. The Company may redeem the notes, in whole or in part, at any time prior to the maturity date at a redemption price of 100% plus accrued and unpaid interest, if any, to, but not including, the date of redemption. Sunbelt Rentals Holdings, Inc. may also redeem the notes at a redemption price of 100% of the principal amount thereof outstanding, plus accrued and unpaid interest, if any, to the date of redemption.

$750 million 5.650% senior notes due 2036. On July 14, 2026, the Company issued $750 million principal amount of 5.650% Senior Notes which are due August 12, 2036. Interest on the notes is payable on February 12 and August 12 of each year, beginning on February 12, 2027. The Company may redeem the notes, in whole or in part, at any time prior to the maturity date at a redemption price of 100% plus accrued and unpaid interest, if any, to, but not including, the date of redemption. Sunbelt Rentals Holdings, Inc. may also redeem the notes at a redemption price of 100% of the principal amount thereof outstanding, plus accrued and unpaid interest, if any, to the date of redemption.

10. Fair Value Measurements

The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these financial instruments. The fair values of the first priority senior secured credit facility and finance leases approximated their book values as of July 31, 2026 and April 30, 2026. The estimated fair values of the other financial instruments were as follows:

The senior notes are carried at amortized cost and the contingent consideration and equity investments are carried at fair value in the condensed consolidated balance sheets.

Contingent consideration relates to recent acquisitions and is based on the post-acquisition performance of the acquired businesses. The consideration is expected to be paid out over the nextsix years and is reassessed at each reporting date. Contingent consideration is a Level 3 financial liability. Future anticipated payments in respect of contingent consideration are initially recorded at fair value which is the present value of the expected cash outflows of the obligations. The obligations are dependent upon the future financial performance of the businesses acquired. The fair value is estimated based on internal financial projections prepared in relation to the acquisition with the contingent consideration discounted to present value using a discount rate in line with the Company’s cost of debt. There have been no changes in the fair value of contingent consideration during the three months ended July 31, 2026.

Equity investments without a readily observable fair value of $32 million as of July 31, 2026 and April 30, 2026 are included in “Other long-term assets” in the consolidated balance sheets. The investments are assessed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable, and measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, and as such classified within Level 3 of the fair value hierarchy. During the three months ended July 31, 2026 and year ended April 30, 2026, no impairment losses were recognized. There was no activity related to the fair value of investments during the three months ended July 31, 2026.

11. Commitments and Contingencies

The Company is subject to a number of claims and proceedings that generally arise in the ordinary conduct of the business. These matters include, but are not limited to, general liability claims (including personal injury, product liability, and property and automobile claims), indemnification and guarantee obligations, employee injuries and employment-related claims, self-insurance obligations and contract and real estate matters. The Company believes that any liabilities ultimately resulting from these ordinary course claims and proceedings will not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, results of operations or cash flows.

We have certain deductible limits under our workers’ compensation and liability insurance policies for which reserves are established based on the discounted estimated costs of known and anticipated claims. We have entered into standby letter of credit agreements relating to workers’ compensation, auto, and general liability self-insurance. As of July 31, 2026, we had contingent liabilities under these outstanding letters of credit of approximately $104 million, including an amount of $4 million issued under the Company's ABL Facility as disclosed in Note 9.

12. Stockholders' Equity

The following table presents a summary of the Company’s share activity:

Common Stock

Effective February 27, 2026, Ashtead completed a reorganization pursuant to a U.K. court-sanctioned scheme of arrangement, which resulted in the establishment of Sunbelt Rentals Holdings, Inc. as the new U.S. holding company.

Ashtead’s common stock, with a par value of £0.10 ($0.18) per share, ceased trading on the London Stock Exchange and was subsequently cancelled. Common stock with a par value of $0.01 per share was issued to the former Ashtead shareholders by Sunbelt Rentals Holdings, Inc. in exchange for the Ashtead cancelled stock.

The total number of shares of capital stock which the Company has authority to issue is 2,500,000,000 shares of common stock and 25,000,000 shares of preferred stock, par value $0.01 per share. No preferred stock has been issued as of July 31, 2026.

Treasury Stock

On February 26, 2026, the Company cancelled all Ashtead Group plc ordinary shares held in treasury in connection with its U.S. Listing and the Scheme.

On March 2, 2026, the Company commenced a new share repurchase program of shares of Sunbelt Rentals Holdings, Inc. common stock up to $1.5 billion, which was previously announced on December 9, 2025. As of July 31, 2026, the Company had made $315 million repurchases and these shares are reflected as treasury stock.

Employee Share Ownership Trust (“ESOT”)

The ESOT was previously established in connection with the Company’s long-term incentive plans. During fiscal 2026, the Company commenced the termination of the ESOT with all outstanding shares sold.

13. Stock-Based Compensation

Equity-classified awards

A summary of the transactions within Sunbelt’s equity-classified long-term incentive awards is as follows:

Stock-based compensation expense

Stock-based compensation expense was $26 million and $23 million for the three months ended July 31, 2026 and 2025, respectively. Sunbelt’s stock-based compensation expense is included in selling, general and administrative expense in Sunbelt’s condensed consolidated statements of income.

14. Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share:

15. Subsequent Events

Subsequent to the balance sheet date, the Company has completed the acquisition ofthree businesses in North America. The total purchase price for these acquisitions was $56 million. The initial accounting for these acquisitions is incomplete due to the proximity to the period end.

In addition, on August 12, 2026, the Company repaid its $550 million 1.500% senior notes in accordance with their scheduled maturity.

On September 9, 2026, the Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock, payable on October 2, 2026, to stockholders of record as of September 18, 2026.