Financial Analysis

Commitments and Contingencies We are subject to a number of claims and proceedings that generally arise in the ordinary conduct of our 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. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals included in our consolidated balance sheets for matters where we have established them, we currently believe 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 our consolidated financial position, results of operations or cash flows. Indemnification The Company indemnifies its officers and directors pursuant to indemnification agreements and may in addition indemnify these individuals as permitted by Delaware law. Employee Benefit Plans We currently sponsor two defined contribution 401(k) retirement plans, which are subject to the provisions of the Employee Retirement Income Security Act of 1974. We also sponsor a deferred profit sharing plan and a registered retirement savings plan for the benefit of the full-time employees of our Canadian subsidiaries, and also make contribu …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Debt, net of unamortized original issue discounts and premiums, and unamortized debt issuance costs, consists of the following: December 31, 2025 2024 Accounts receivable securitization facility expiring 2026 (1) $ 1,459 $ 1,085 $4.5 billion ABL facility expiring 2030 (1) (2) 1,645 2,253 Term loan facility expiring 2031 (1) 975 984 5 1 / 2 percent Senior Notes due 2027 (2) 499 3 7 / 8 percent Senior Secured Notes due 2027 748 747 4 7 / 8 percent Senior Notes due 2028 (3) 1,669 1,667 6 percent Senior Secured Notes due 2029 1,492 1,490 5 1 / 4 percent Senior Notes due 2030 747 746 4 percent Senior Notes due 2030 746 745 3 7 / 8 percent Senior Notes due 2031 1,094 1,092 3 3 / 4 percent Senior Notes due 2032 746 745 5 3 / 8 percent Senior Notes due 2033 (2) 1,486 6 1 / 8 percent Senior Notes due 2034 1,091 1,090 Finance leases 331 263 Total debt 14,229 13,406 Less short-term portion (4) (1,577) (1,178) Total long-term debt $ 12,652 $ 12,228 (1) The table below presents financial information associated with our variable rate indebtedness as of and for the year ended December 31, 2025. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements As of December 31, 2025 and 2024, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2Observable inputs other than quoted prices in active markets for identical assets or liabilities include: a) quoted prices for similar assets or liabilities in active markets; b) quoted prices for identical or similar assets or liabilities in inactive markets; c) inputs other than quoted prices that are observable for the asset or liability; d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short-term maturity of these f …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Intangible Assets The following table presents the changes in the carrying amount of goodwill for each of the three years in the period ended December 31, 2025: General rentals Specialty Total Balance at January 1, 2023 (1) $ 4,980 $ 1,046 $ 6,026 Goodwill related to acquisitions (2) (3) (209) 111 (98) Foreign currency translation and other adjustments 4 8 12 Balance at December 31, 2023 (1) 4,775 1,165 5,940 Goodwill related to acquisitions (2) (3) 124 881 1,005 Foreign currency translation and other adjustments (16) (29) (45) Balance at December 31, 2024 (1) 4,883 2,017 6,900 Goodwill related to acquisitions (2) 14 155 169 Foreign currency translation and other adjustments 10 40 50 Balance at December 31, 2025 (1) $ 4,907 $ 2,212 $ 7,119 _________________ (1) The total carrying amount of goodwill for all periods in the table above is reflected net of $1.557 billion of accumulated impairment charges, which were primarily recorded in our general rentals segment. (2) Includes goodwill adjustments for the effect on goodwill of changes to net assets acquired during the measurement period, which were not significant to our previously reported operating results or financial condition. Decreases in goodwill related to acquisitions above primarily reflect such measurement period adjustments. (3) The December 2022 acquisition of Ahern Rentals was assigned to our general rentals segment. The decrease in goodwill related to acquisitions for the general rentals segmen …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes Income before provision for income taxes for each of the three years in the period ended December 31, 2025 was as follows: Year ended December 31, 2025 2024 2023 U.S. $ 3,135 $ 3,156 $ 2,926 Foreign 203 232 285 Total $ 3,338 $ 3,388 $ 3,211 The components of the provision (benefit) for income taxes for each of the three years in the period ended December 31, 2025 were as follows: Year ended December 31, 2025 2024 2023 Current U.S. federal $ 267 $ 628 $ 561 U.S. state and local 106 140 125 Foreign 66 64 66 Total current 439 832 752 Deferred U.S. federal 363 (8) 5 U.S. state and local 39 (10) 17 Foreign 3 (1) 13 Total deferred 405 (19) 35 Total (current and deferred) U.S. federal 630 620 566 U.S. state and local 145 130 142 Foreign 69 63 79 Total $ 844 $ 813 $ 787 A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate of 21 percent to the income before provision for income taxes for each of the three years in the period ended December 31, 2025 is as follows: Year ended December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent Computed tax at statutory tax rate $ 701 21.0 % $ 712 21.0 % $ 674 21.0 % State and local income taxes, net of federal tax benefit (1) (2) 124 3.7 % 93 2.7 % 116 3.6 % Foreign tax effects 27 0.8 % 14 0.4 % 19 0.6 % Effect of cross-border tax laws 3 0.1 % (3) (0.1) % (3) (0.1) % Tax credits (18) (0.5) % (4) (0.1) % (3) (0.1) % Changes in valuation all …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases As discussed in note 3 to the consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such revenue represented 77 percent of our total revenues for the year ended December 31, 2025). See note 3 for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842). We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases. Operating leases result in the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement da …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

New Accounting Pronouncements Disaggregation of Income Statement Expenses. In November 2024, the FASB issued ASU 2024-03, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, may be applied prospectively or retrospectively, and allows for early adoption. 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. Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued 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 apply a practical expedient when estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively. We are currently assess …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Restructuring Charges Restructuring charges primarily include severance costs associated with headcount reductions, as well as branch closure charges. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of $384. In the fourth quarter of 2025, we initiated a restructuring program (the 2026 Cost Savings Restructuring Program) associated with the consolidation of certain common functions and certain other cost reduction measures. We did not recognize material costs associated with this program in 2025. We expect to complete this program in 2026, and expect to recognize between $30 and $60 of total costs, primarily comprised of severance and branch closure costs, under the program. As of December 31, 2025, the total liability associated with our restructuring programs was $13 (such amount relates only to our closed restructuring programs, as we have not yet recognized any liabilities associated with the 2026 Cost Savings Restructuring Program). …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Revenue Recognition Revenue Recognition Accounting Standards We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard. Year Ended December 31, 2025 2024 2023 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 11,048 $ $ 11,048 $ 10,559 $ $ 10,559 $ 9,948 $ $ 9,948 Re-rent revenue 275 275 258 258 233 233 Ancillary and other rental revenues: Delivery and pick-up 1,153 1,153 1,069 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Information Our reportable segments are (i) general rentals and (ii) specialty. Our determination of the operating segments is primarily based on geography, but also includes consideration of the offered products and services. As noted below, we evaluate segment performance primarily based on segment equipment rentals gross profit. As discussed further in note 2 to our consolidated financial statements (Evaluation of Goodwill Impairment), we test for goodwill impairment at the reporting unit (the region, which is one level below the operating segment (division)) level. For general rentals, the divisions discussed below, which are our operating segments, are aggregated into the reportable segment. The specialty segment is a single division that is both an operating segment and a reportable segment. We believe that the divisions that are aggregated into our reportable segments have similar economic characteristics, as each division is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our divisions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit. The general rentals segment includes the rental of (i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, ea …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Cash Equivalents We consider all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. Allowance for Credit Losses We maintain allowances for credit losses. These allowances reflect our estimate of the amount of our receivables that we will be unable to collect based on historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectibility. Our estimate could require change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowances. Trade receivables that have contractual maturities of one year or less are written-off when they are determined to be uncollectible based on the criteria necessary to qualify as a deduction for federal tax purposes. Write-offs of such receivables require management approval based on specified dollar thresholds. See note 3 to our consolidated financial statements for further detail. Inventory Inventory consists of new equipment, contractor supplies, tools, parts, fuel and related supply items. Inventory is stated at the lower of cost or market. Cost is determined, depending on the type of inventory, using either a specific identification or weighted-average method. Rental Equipment Rental equipment, which includes service and delivery vehicles, is record …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Debt Debt, net of unamortized original issue discounts or premiums, and unamortized debt issuance costs, consists of the following: June 30, 2026 December 31, 2025 Accounts receivable securitization facility expiring 2027 (1) (2) $ 1,414 $ 1,459 $4.5 billion ABL facility expiring 2030 (1) 1,666 1,645 Term loan facility expiring 2031 (1) 971 975 3 7 / 8 percent Senior Secured Notes due 2027 748 748 4 7 / 8 percent Senior Notes due 2028 (3) 1,670 1,669 6 percent Senior Secured Notes due 2029 1,493 1,492 5 1 / 4 percent Senior Notes due 2030 747 747 4 percent Senior Notes due 2030 746 746 3 7 / 8 percent Senior Notes due 2031 1,094 1,094 3 3 / 4 percent Senior Notes due 2032 746 746 5 3 / 8 percent Senior Notes due 2033 1,487 1,486 6 1 / 8 percent Senior Notes due 2034 1,092 1,091 Finance leases 356 331 Total debt 14,230 14,229 Less short-term portion (4) (1,541) (1,577) Total long-term debt $ 12,689 $ 12,652 ___________________ (1) The table below presents financial information associated with our variable rate indebtedness as of and for the six months ended June 30, 2026. We have borrowed the full available amount under the term loan facility. The principal obligation under the term loan facility is required to be repaid in quarterly installments in an aggregate amount equal to 1.0 percent per annum, with the balance due at the maturity of the facility. The average amount of debt outstanding under the term loan facility decreases slightly each quarter due to the requirement to …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements As of June 30, 2026 and December 31, 2025, the amounts of our assets and liabilities that were accounted for at fair value were immaterial. Fair value measurements are categorized in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: Level 1- Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2- Observable inputs other than quoted prices in active markets for identical assets or liabilities include: a) quoted prices for similar assets or liabilities in active markets; b) quoted prices for identical or similar assets or liabilities in inactive markets; c) inputs other than quoted prices that are observable for the asset or liability; d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3- Inputs to the valuation methodology are unobservable (i.e., supported by little or no market activity) and significant to the fair value measure. Fair Value of Financial Instruments The carrying amounts reported in our condensed consolidated balance sheets for accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value due to the immediate to short …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Legal and Regulatory Matters We are subject to a number of claims and proceedings that generally arise in the ordinary conduct of our 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. Based on advice of counsel and available information, including current status or stage of proceeding, and taking into account accruals included in our consolidated balance sheets for matters where we have established them, we currently believe 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 our consolidated financial position, results of operations or cash flows.

LegalMattersAndContingenciesTextBlock

New Accounting Pronouncements Disaggregation of Income Statement Expenses. In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, may be applied prospectively or retrospectively, and allows for early adoption. 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. Accounting Guidance Adopted in 2026 Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued 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 apply a practical expedient when estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual repor …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Restructuring Charges Restructuring charges primarily include severance costs associated with headcount reductions, as well as branch closure charges. We incur severance costs and branch closure charges in the ordinary course of our business. We only include such costs that are part of a restructuring program as restructuring charges. Since the first such program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of $435. Closed Restructuring Programs Our closed restructuring programs were generally initiated either in recognition of a challenging economic environment or following the completion of certain significant acquisitions. As of June 30, 2026, the total liability associated with the closed restructuring programs was $12. 2026 Cost Savings Restructuring Program In the fourth quarter of 2025, we initiated a restructuring program (the 2026 Cost Savings Restructuring Program) associated with the consolidation of certain common functions and certain other cost reduction measures. We first incurred costs associated with this program in 2026 and expect to recognize between $55 and $65 of total costs (inclusive of the $50 recognized through June 30, 2026 as reflected in the table below), primarily comprised of severance and branch closure costs, under the program, which is expected to be completed in 2026. The table below provides certain information concerning restructuring activity under the 2026 Cost Savings …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Revenue Recognition Revenue Recognition Accounting Standards We recognize revenue in accordance with two different accounting standards: 1) Topic 606 (which addresses revenue from contracts with customers) and 2) Topic 842 (which addresses lease revenue). Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. As reflected below, most of our revenue is accounted for under Topic 842. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Nature of goods and services In the following table, revenue is summarized by type and by the applicable accounting standard. Three Months Ended June 30, 2026 2025 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Owned equipment rentals $ 2,991 $ $ 2,991 $ 2,745 $ $ 2,745 Re-rent revenue 88 88 60 60 Ancillary and other rental revenues: Delivery and pick-up 341 341 294 294 Other 337 92 429 266 50 316 Total ancillary and other rental re …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Information Our reportable segments are (i) general rentals and (ii) specialty. Our determination of the operating segments is primarily based on geography, but also includes consideration of the offered products and services. For general rentals, the divisions discussed below, which are our operating segments, are aggregated into the reportable segment. The specialty segment is a single division that is both an operating segment and a reportable segment. We believe that the divisions that are aggregated into our reportable segments have similar economic characteristics, as each division is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our divisions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit. The general rentals segment includes the rental of (i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, (ii) aerial work platforms, such as boom lifts and scissor lifts and (iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of four geographic divisionsCentral, Northeast, Southeast and Westand operates …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing