RYDER SYSTEM INC

Previous wording

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included under Item 1, as well as our audited consolidated financial statements and notes thereto and related MD&A included in the 2025 Annual Report on Form 10-K. All percentages have been calculated using unrounded amounts. Certain prior period amounts have been reclassified to conform with the current period presentation.

Current wording

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included under Item 1, as well as our audited consolidated financial statements and notes thereto and related MD&A included in the 2025 Annual Report on Form 10-K. All percentages have been calculated using unrounded amounts.

Previous wording

Selected Operating Performance Items For The Second Quarter 2026

Current wording

Selected Operating Performance Items for the Third Quarter 2026

Previous wording

•Diluted EPS from continuing operations of $3.40, up 8% from prior year

Current wording

•Diluted EPS from continuing operations of $4.16, up 25% from prior year

Previous wording

•Comparable EPS (a non-GAAP measure) from continuing operations of $3.73, up 12% from prior year, reflects share repurchases and higher earnings in Fleet Management Solutions (FMS)

Current wording

•Comparable EPS (a non-GAAP measure) from continuing operations of $4.33, up 21% from prior year, reflects higher earnings in Fleet Management Solutions (FMS) and share repurchases

Previous wording

•Total revenue of $3.3 billion, up 5% from prior year, due to higher revenue in Supply Chain Solutions (SCS) and FMS

Current wording

•Total revenue of $3.4 billion, up 8% from prior year, due to higher revenue in all business segments

Previous wording

•Operating revenue (a non-GAAP measure) of $2.7 billion, up 3% from prior year, primarily reflecting contractual revenue growth in SCS

Current wording

•Operating revenue (a non-GAAP measure) of $2.8 billion, up 6% from prior year, reflecting contractual revenue growth in Supply Chain Solutions (SCS) and FMS

Previous wording

During the three and six months ended June 30, 2026, the strength and resiliency of our transformed business model enabled the business to deliver solid results in the current environment. FMS had earnings growth driven by strong performance in our contractual business as well as better used vehicle sales results. In addition, SCS and DTS delivered solid earnings reflecting consistent execution of our strategic initiatives.

Current wording

During the three and nine months ended September 30, 2026, the strength and resiliency of our transformed business model enabled the business to deliver continued earnings growth. During the third quarter, all business segments delivered earnings in line with long term targets reflecting execution of strategic operating initiatives and improving performance in used vehicle sales and rental. In addition, operating revenue growth rates continued to improve, with FMS and SCS generating strong contractual growth.

Previous wording

We continue to benefit from favorable long-term secular trends in logistics and transportation solutions and have experienced strong contractual sales activity across all three of our business segments. We also experienced improving trends in used vehicle sales as market conditions continued to strengthen, and rental utilization returned to normalized levels driven by our planned asset management actions. In addition, we remain on track to achieve $70 million in expected earnings benefits from strategic initiatives this year, and are well positioned for growth from a cycle upturn.

Current wording

We continue to benefit from favorable long-term secular trends in logistics and transportation solutions and have experienced strong contractual sales activity across all three of our business segments, with activity accelerating in FMS and DTS due to increasing demand for capacity from quality carriers. We also experienced improving trends in used vehicle sales driven by stronger than expected pricing and retail sales volumes, and our rental business has benefited from the execution of our asset management practices. In addition, we remain on track to deliver over $70 million in expected earnings benefits from strategic initiatives this year, and are well positioned for continued growth.

Previous wording

Favorable secular trends and the value our solutions bring to our customers remain strong and provide long-term revenue and earnings growth opportunities for all of our business segments. While we are experiencing positive momentum in our businesses, inflationary cost pressures, regulatory changes, geopolitical events, labor interruptions, changes in tariff, trade or tax policies and the continued higher interest rate environment may negatively impact demand for our business, financial results and significant judgments and estimates.

Current wording

Favorable secular trends and the value our solutions bring to our customers remain strong and provide long-term revenue and earnings growth opportunities for all of our business segments. While we are experiencing positive momentum in our businesses, inflationary cost pressures including higher fuel costs, regulatory changes, geopolitical events, labor interruptions, changes in tariff, trade or tax policies and the continued higher interest rate environment may negatively impact demand for our business, financial results and significant judgments and estimates.

Previous wording

Total revenue increased 5% in the second quarter of 2026, and 2% in the six months ended June 30, 2026, reflecting higher operating revenue and fuel revenue due to higher prices passed through to customers. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 3% in the second quarter of 2026, and 2% for the six months ended June 30, 2026, reflecting contractual revenue growth in SCS and FMS, partially offset by lower DTS fleet count.

Current wording

Total revenue increased 8% in the third quarter of 2026, and 4% in the nine months ended September 30, 2026, reflecting higher operating revenue and fuel revenue due to higher prices passed through to customers. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 6% in the third quarter of 2026, and 3% for the nine months ended September 30, 2026, reflecting contractual revenue growth in SCS and FMS, partially offset by lower DTS fleet count.

Previous wording

EBT and comparable EBTdecreased in the six months ended June 30, 2026. The decrease in EBT is primarily due to lower SCS results and a non-cash intangible asset impairment charge, partially offset by improved FMS performance. The decrease in EBT also includes an $8 million non-cash charge for the partial settlement of our Canadian pension plan’s projected benefit obligation.

Current wording

EBT and comparable EBT increased in the third quarter primarily due to improved FMS performance. EBT and comparable EBT increased in the nine months ended September 30, 2026, primarily due to improved FMS performance, partially offset by lower SCS results, a non-cash intangible asset impairment charge and a non-cash charge for the partial settlement of our Canadian pension plan’s projected benefit obligation.

Previous wording

Services revenue represents all the revenues associated with our SCS and DTS business segments, including subcontracted transportation and fuel, as well as SelectCare and fleet support services associated with our FMS business segment. Services revenue increased 5% in the second quarter and increased 2% in the six months ended June 30, 2026, primarily driven by new business in SCS.

Current wording

Services revenue represents all the revenues associated with our SCS and DTS business segments, including subcontracted transportation and fuel, as well as SelectCare and fleet support services associated with our FMS business segment. Services revenue increased 8% in the third quarter, primarily driven by new business and higher volumes and 4% in the nine months ended September 30, 2026, primarily driven by new business in SCS.

Previous wording

Cost of services represents the direct costs related to services revenue and is primarily comprised of salaries and employee-related costs, subcontracted transportation (purchased transportation from third parties), fuel, lease expense, insurance and maintenance costs. Cost of services increased slightly more than revenue for the three and six months ended June 30, 2026, primarily due to costs incurred to ramp up new business in SCS.

Current wording

Cost of services represents the direct costs related to services revenue and is primarily comprised of salaries and employee-related costs, subcontracted transportation (purchased transportation from third parties), fuel, lease expense, insurance and maintenance costs. Cost of services increased slightly more than revenue for the three and nine months ended September 30, 2026, primarily due to costs incurred to ramp up new business in SCS.

Previous wording

Services gross margin increased slightly in the second quarter and remained consistent for the six months ended June 30, 2026. Service gross margin percentage slightly decreased in the second quarter and remained consistent for the six months ended June 30, 2026.

Current wording

Services gross margin increased 7% in the third quarter primarily due to higher pricing and volume, and 2% for the nine months ended September 30, 2026, primarily due to higher pricing. Service gross margin percentage remained consistent in the third quarter and for the nine months ended September 30, 2026.

Previous wording

Lease & related maintenance and rental revenue represent revenue from our ChoiceLease and commercial rental product offerings within our FMS business segment. Revenue increased 1% in the second quarter and for the six months ended June 30, 2026, reflecting contractual revenue growth, partially offset by lower rental demand.

Current wording

Lease & related maintenance and rental revenue represent revenue from our ChoiceLease and commercial rental product offerings within our FMS business segment. Revenue increased 4% in the third quarter reflecting contractual revenue growth, and increased 2% for the nine months ended September 30, 2026, reflecting contractual revenue growth, partially offset by lower rental demand.

Previous wording

Cost of lease & related maintenance and rental represents the direct costs related to Lease & related maintenance and rental revenue and is comprised of depreciation of revenue earning equipment, maintenance costs (primarily repair parts and labor), and other costs such as licenses, insurance and operating taxes. Cost of lease & related maintenance and rental excludes interest costs from vehicle financing, which are reported within "Interest expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental increased 2% in the second quarter and six months ended June 30, 2026, primarily reflecting revenue growth and higher maintenance and insurance costs.

Current wording

Cost of lease & related maintenance and rental represents the direct costs related to Lease & related maintenance and rental revenue and is comprised of depreciation of revenue earning equipment, maintenance costs (primarily repair parts and labor), and other costs such as licenses, insurance and operating taxes. Cost of lease & related maintenance and rental excludes interest costs from vehicle financing, which are reported within "Interest expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental increased 6% in the third quarter and 3% for the nine months ended September 30, 2026, primarily reflecting revenue growth and higher maintenance and insurance costs.

Previous wording

Lease & related maintenance and rental gross margin decreased 2% in the second quarter and the six months ended June 30, 2026, due to higher maintenance and insurance costs. Lease & related maintenance and rental gross margin percentage slightly decreased in the second quarter primarily due to higher maintenance costs and remained consistent for the six months ended June 30, 2026.

Current wording

Lease & related maintenance and rental gross margin remained relatively consistent in the third quarter and decreased 2% for the nine months ended September 30, 2026 and Lease & related maintenance and rental gross margin percentage slightly decreased in the third quarter and for the nine months ended September 30, 2026, due to higher maintenance and insurance costs.

Previous wording

Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue increased 45% in the second quarter and increased 24% in the six months ended June 30, 2026, primarily reflecting higher fuel prices passed through to customers.

Current wording

Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue increased 44% in the third quarter and increased 31% in the nine months ended September 30, 2026, primarily reflecting higher fuel prices passed through to customers.

Previous wording

Cost of fuel services includes the direct costs associated with providing our customers with fuel. These costs include fuel, salaries and employee-related costs of fuel island attendants and depreciation of our fueling facilities and equipment. Cost of fuel services increased 48% in the second quarter and increased 23% in the six months ended June 30, 2026, primarily due to higher fuel prices.

Current wording

Cost of fuel services includes the direct costs associated with providing our customers with fuel. These costs include fuel, salaries and employee-related costs of fuel island attendants and depreciation of our fueling facilities and equipment. Cost of fuel services increased 47% in the third quarter and increased 31% in the nine months ended September 30, 2026, primarily due to higher fuel prices.

Previous wording

Fuel services gross margin and fuel services gross margin as a percentage of revenue decreased in the second quarter and increased for the six months ended June 30, 2026. Fuel is largely a pass-through to customers for which we realize minimal changes in margin during periods of steady market fuel prices. However, fuel services margin is impacted by sudden increases or decreases in market fuel prices during a short period of time, as customer pricing for fuel is established based on current market fuel costs. Fuel services gross margin and fuel services gross margin as a percentage of revenue in the second quarter of 2026 were positively impacted by these price change dynamics but were impacted more favorably in the prior year. Fuel services gross margin and fuel services gross margin as a percentage of revenue for the six months ended June 30, 2026 were positively impacted by these price change dynamics.

Current wording

Fuel is largely a pass-through to customers for which we realize minimal changes in margin during periods of steady market fuel prices. However, fuel services margin is impacted by sudden increases or decreases in market fuel prices during a short period of time, as customer pricing for fuel is established based on current market fuel costs.

Previous wording

SG&A expenses increased 3% in the second quarter of 2026 and for the six months ended June 30, 2026, primarily reflecting a non-cash impairment charge related to an intangible asset and higher compensation-related expenses. SG&A expenses as a percentage of total revenue remained consistent at 12% for the second quarter and for the six months ended June 30, 2026.

Current wording

SG&A expenses and SG&A expenses as a percentage of total revenue decreased 1% in the third quarter of 2026. SG&A expenses increased 2% for the nine months ended September 30, 2026, primarily reflecting a non-cash impairment charge related to an intangible asset and higher compensation-related expenses. SG&A expenses as a percentage of total revenue remained consistent for the nine months ended September 30, 2026.

Previous wording

"Non-operating pension costs, net" include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. The second quarter of 2026 and the six months ended June 30, 2026, includes an $8 million non-cash charge for the partial settlement of our Canadian pension plan’s projected benefit obligation. Refer to Note 13, Employee Benefit Plans," for further discussion.

Current wording

Non-operating pension costs, net include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. The nine months ended September 30, 2026, includes an $8 million non-cash charge for the partial settlement of our Canadian pension plan’s projected benefit obligation. Refer to Note 13, “Employee Benefit Plans," for further discussion.

Previous wording

Used vehicle sales, net includes gains or losses from sales of used vehicles, selling costs associated with used vehicles and write-downs of vehicles held for sale to fair market value (referred to as "valuation adjustments"). Net gains on used vehicle sales increased in the second quarter and six months ended June 30, 2026, primarily due to higher pricing and an improved retail sales mix. In the prior year, we drove higher sales through the wholesale channel in order to manage aged inventory levels.

Current wording

Used vehicle sales, net includes gains or losses from sales of used vehicles, selling costs associated with used vehicles and write-downs of vehicles held for sale to fair market value (referred to as "valuation adjustments"). Net gains on used vehicle sales increased in the third quarter and nine months ended September 30, 2026, primarily due to higher pricing and an improved retail sales volume mix. In the prior year, we drove higher sales through the wholesale channel in order to manage aged inventory levels.

Previous wording

Average proceeds per unit increased in the second quarter and for the six months ended June 30, 2026. The following table presents the average used vehicle pricing changes compared to the prior year:

Current wording

Average proceeds per unit increased in the third quarter and for the nine months ended September 30, 2026. The following table presents the average used vehicle pricing changes compared to the prior year:

Previous wording

Interest expense decreased 4% in the second quarter and for the six months ended June 30, 2026, respectively, primarily reflecting a reduced average debt balance and lower effective interest rate.

Current wording

Interest expense decreased 6% in the third quarter and decreased 5% for the nine months ended September 30, 2026, primarily reflecting a reduced average debt balance.

Previous wording

Miscellaneous income, net consists of investment income on securities used to fund certain benefit plans, interest income, gains on sales of operating property, foreign currency transaction remeasurement and other non-operating items. Miscellaneous income, net increased to $22 million in the second quarter of 2026, and increased to $21 million for the six months ended June 30, 2026, primarily due to better market performance of investments classified as trading securities used to fund certain benefit plans.

Current wording

Miscellaneous income and other, net consists of investment income on securities used to fund certain benefit plans, interest income, gains on sales of operating property, foreign currency transaction remeasurement and other non-operating items. Miscellaneous income and other, net decreased to $3 million in the third quarter of 2026, and increased to $23 million for the nine months ended September 30, 2026, primarily due to the market performance of investments classified as trading securities used to fund certain benefit plans.

Previous wording

In the second quarter of 2026, our effective tax rate on continuing operations and comparable effective tax rate on continuing operations was 28.2% and 27.7%, respectively, compared to 28.3% and 28.0%, respectively, in the prior year. For the six months ended June 30, 2026, our effective tax rate on continuing operations and comparable effective tax rate on continuing operations was 25.4% and 25.1% respectively, compared to 27.7% and 27.0%, respectively, in the prior year. The decrease in tax rates for both periods was primarily due to higher excess tax benefits on stock-based compensation.

Current wording

In the third quarter of 2026, our effective tax rate on continuing operations and comparable effective tax rate on continuing operations was 28.1% and 27.7%, respectively, compared to 27.1% and 25.6%, respectively, in the prior year. For the nine months ended September 30, 2026, our effective tax rate on continuing operations and comparable effective tax rate on continuing operations was 26.6% and 26.2% respectively, compared to 27.5% and 26.5%, respectively, in the prior year. The increase in the effective tax rates in the third quarter of 2026, reflects a prior year discrete stock-based compensation tax benefit. The decrease in effective tax rates for the nine months ended September 30, 2026, is primarily due to higher discrete tax benefits from stock-based compensation activity recognized during 2026.

Previous wording

Our FMS segment leases revenue earning equipment, and provides rental vehicles, fuel, maintenance and other ancillary services to the SCS and DTS segments. Inter-segment EBT allocated to SCS and DTS includes earnings related to equipment used in providing services to SCS and DTS customers. EBT related to inter-segment equipment and services billed to SCS and

Current wording

Our FMS segment leases revenue earning equipment, and provides rental vehicles, fuel, maintenance and other ancillary services to the SCS and DTS segments. Inter-segment EBT allocated to SCS and DTS includes earnings related to equipment used in providing services to SCS and DTS customers. EBT related to inter-segment equipment and services billed to SCS and DTS customers (Equipment Contribution) are included in both FMS and the segment that served the customer and then eliminated upon consolidation (presented as "Eliminations").

Previous wording

(1)For the three months ended June 30, 2026 and 2025, rental revenue from lease customers in place of a lease vehicle represented 28% of commercial rental revenue for both periods. For the six months ended June 30, 2026 and 2025, rental revenue from lease customers in place of a lease vehicle represented 29% of commercial rental revenue for both periods.

Current wording

(1)For the three months ended September 30, 2026 and 2025, rental revenue from lease customers in place of a lease vehicle represented 29% and 28% of commercial rental revenue, respectively. For the nine months ended September 30, 2026 and 2025, rental revenue from lease customers in place of a lease vehicle represented 29% of commercial rental revenue.

Previous wording

FMS total revenue increased 6% in the second quarter of 2026 and increased 4% for the six months ended June 30, 2026, due to higher fuel prices passed through to customers and higher operating revenue. FMS operating revenue increased 1% in the second quarter and for the six months ended June 30, 2026, primarily reflecting contractual revenue growth, partially offset by lower commercial rental demand.

Current wording

FMS total revenue increased 10% in the third quarter of 2026 and increased 6% for the nine months ended September 30, 2026, due to higher fuel prices passed through to customers and higher operating revenue. FMS operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 5% in the third quarter primarily reflecting contractual revenue growth, and 2% for the nine months ended September 30, 2026, primarily reflecting contractual revenue growth, partially offset by lower commercial rental demand.

Previous wording

FMS EBT increased 20% in the second quarter and 14% for the six months ended June 30, 2026, due to strategic initiatives benefiting ChoiceLease performance and higher used vehicle sales results reflecting improving market conditions and elevated wholesale activity in the prior year. Used truck and tractor pricing increased 6% and 3%, respectively in the second quarter of 2026 and increased 2% and 5%, respectively, in the six months ended June 30, 2026. Sequentially, pricing was stable as used truck and tractor retail pricing increased 7% and 3%, respectively, on a lower retail sales mix. Rental power fleet utilization was

Current wording

FMS EBT increased 21% in the third quarter and 17% for the nine months ended September 30, 2026, due to strategic initiatives benefiting ChoiceLease performance, higher used vehicle sales results reflecting improving market conditions and elevated used vehicle wholesale activity in the prior year. Used truck and tractor pricing increased 5% and 19%, respectively in the third quarter of 2026 and increased 3% and 10%, respectively, in the nine months ended September 30, 2026. Sequentially from the second quarter of 2026, used truck and tractor pricing increased 6% and 15%, respectively. Rental power fleet utilization was 77% in the third quarter of 2026, compared with 70% in the prior year, on a 12% smaller average fleet. Rental power fleet utilization was 73% for the nine months ended September 30, 2026, compared with 69% in the prior year, on a 13% smaller average fleet.

Previous wording

SCS total revenue increased 8% in the second quarter of 2026 and 5% for the six months ended June 30, 2026, primarily reflecting increased operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). SCS operating revenue increased 7% in the second quarter of 2026 and 5% for the six months ended June 30, 2026, driven by new business, partially offset by lost business in automotive.

Current wording

SCS total revenue increased 9% in the third quarter of 2026 and 6% for the nine months ended September 30, 2026, primarily reflecting increased operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). SCS operating revenue increased 9% in the third quarter of 2026 and 6% for the nine months ended September 30, 2026, driven by new business and higher volumes and pricing, partially offset by lost business in automotive.

Previous wording

SCS EBT decreased 7% in the second quarter of 2026, and decreased 12% for the six months ended June 30, 2026, primarily due to lower automotive results and, to a lesser extent, productivity of new business ramping up, partially offset by the optimization of the omnichannel retail network.

Current wording

SCS EBT increased 7% in the third quarter of 2026, primarily due to the optimization of the omnichannel retail network and higher operating revenue, partially offset by productivity of new business ramping up and lower automotive results. SCS EBT decreased 6% for the nine months ended September 30, 2026, primarily due to lower automotive results and, to a lesser extent, productivity of new business ramping up, partially offset by the optimization of the omnichannel retail network.

Previous wording

DTS total revenue decreased 1% in the second quarter of 2026 and 5% for the six months ended June 30, 2026, due to lower operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) and subcontracted transportation costs passed through to customers, partially offset by higher fuel revenue in the second quarter of 2026. DTS operating revenue decreased 3% in the second quarter of 2026 and 4% in the six months ended June 30, 2026, reflecting lower fleet count, partially offset by higher pricing.

Current wording

DTS total revenue increased 6% in the third quarter of 2026, due to higher fuel revenue and subcontracted transportation costs passed through to customers, partially offset by lower operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). DTS total revenue decreased 1% for the nine months ended September 30, 2026, due to lower operating revenue and subcontracted transportation costs passed through to customers, partially offset by higher fuel revenue. DTS operating revenue decreased 1% in the third quarter of 2026, and 3% in the nine months ended September 30, 2026, reflecting lower fleet count, partially offset by higher pricing.

Previous wording

DTS EBT decreased 4% in the second quarter of 2026, and 8% for the six months ended June 30, 2026, primarily reflecting lower operating revenue and adverse development of prior year insurance claims, partially offset by benefits from strategic initiatives.

Current wording

DTS EBT decreased 5% in the third quarter of 2026, and 7% for the nine months ended September 30, 2026, primarily due to lower operating revenue and a prior year workers’ compensation insurance benefit, partially offset by cost savings from strategic initiatives. The nine months ended September 30, 2026, also reflects adverse development of prior year insurance claims.

Previous wording

Unallocated CSS costs decreased 10% in the second quarter of 2026, and 2% for the six months ended June 30, 2026, primarily due to lower compensation-related expense.

Current wording

Unallocated CSS costs decreased 6% in the third quarter of 2026, and 3% for the nine months ended September 30, 2026, primarily due to lower compensation-related expense.

Previous wording

Net cash provided by operating activities from continuing operations was $1.3 billion for the six months ended June 30, 2026, compared to $1.4 billion in the prior year, primarily reflecting an increase of accounts receivable in conjunction with revenue growth and the timing of vendor payments. Net cash used in investing activities from continuing operations decreased to $588 million for the six months ended June 30, 2026, compared with $943 million in 2025, primarily reflecting lower capital expenditures. Net cash used in financing activities from continuing operations was $650 million for the six months ended June 30, 2026, compared with $444 million in 2025, primarily reflecting higher net debt repayments and share repurchases.

Current wording

Net cash provided by operating activities from continuing operations was $2.0 billion for the nine months ended September 30, 2026, compared to $1.8 billion in the prior year, primarily reflecting lower working capital needs. Net cash used in investing activities from continuing operations decreased to $1.0 billion for the nine months ended September 30, 2026, compared with $1.4 billion in 2025, primarily reflecting lower capital expenditures. Net cash used in financing activities from continuing operations was $977 million for the nine months ended September 30, 2026, compared with $469 million in 2025, primarily reflecting higher net debt repayments.

Previous wording

Free cash flow (a non-GAAP measure) increased to $684 million for the six months ended June 30, 2026, compared to $461 million in 2025, primarily reflecting reduced cash capital expenditures.

Current wording

Free cash flow (a non-GAAP measure) increased to $992 million for the nine months ended September 30, 2026, compared to $496 million in 2025, primarily reflecting reduced cash capital expenditures and higher cash provided by operating activities.

Previous wording

Gross capital expenditures decreased to $812 million for the six months ended June 30, 2026, compared to $1.2 billion in 2025, primarily reflecting the timing of ChoiceLease fleet replacement and reduced investments in the rental fleet.

Current wording

Gross capital expenditures decreased to $1.4 billion for the nine months ended September 30, 2026, compared to $1.6 billion in 2025, primarily reflecting the timing of ChoiceLease fleet replacements.

Previous wording

Cash and cash equivalents totaled $219 million as of June 30, 2026, of which $171 million was held outside the U.S. and is available to fund the operations and growth of our non-U.S. subsidiaries. We believe that cash generated from operations, together with our access to the commercial paper and public debt markets, will be sufficient to meet our operating, investing and financing needs, including debt maturities and other short-term obligations, over the next twelve months. Our global revolving credit facility, in conjunction with operating cash flow, provides financial flexibility to refinance upcoming debt maturities. Consistent with our historical funding practices, we intend to refinance certain debt obligations as they mature through a combination of commercial paper and medium-term debt issuances, depending on market conditions and funding requirements. However, volatility or disruption in the commercial paper or public debt markets could impair our ability to access these markets or obtain financing on commercially acceptable terms. If access to these markets become unavailable, we believe our committed revolving credit facility and other available funding sources would provide sufficient liquidity to meet our obligations as they become due.

Current wording

Cash and cash equivalents totaled $198 million as of September 30, 2026, of which $148 million was held outside the U.S. and is available to fund the operations and growth of our non-U.S. subsidiaries. We believe that cash generated from operations, together with our access to the commercial paper and public debt markets, will be sufficient to meet our operating, investing and financing needs, including debt maturities and other short-term obligations, over the next twelve months. Our global revolving credit facility, in conjunction with operating cash flow, provides financial flexibility to refinance upcoming debt maturities. Consistent with our historical funding practices, we intend to refinance certain debt obligations as they mature through a combination of commercial paper and medium-term debt issuances, depending on market conditions and funding requirements. However, volatility or disruption in the commercial paper or public debt markets could impair our ability to access these markets or obtain financing on commercially acceptable terms. If access to these markets becomes unavailable, we believe our committed revolving credit facility and other available funding sources would provide sufficient liquidity to meet our obligations as they become due.