What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-01-28 compared with 2025-01-29 · 120 added, 123 removed, 504 unchanged (33% of the section changed)

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Our operations are impacted by global economic conditions, including inflation, tariffs, interest rate fluctuations and supply chain constraints, and we take actions to modify our plans to address such economic conditions.

In 2022, for example, we intentionally held back on sales of rental equipment to ensure we had sufficient rental capacity for our customers.

To date, the impact from supply chain disruptions has been limited, but we may experience more severe supply chain disruptions in the future.

Interest rates on our debt instruments have increased in recent years.

For example, in March 2024, United Rentals (North America), Inc.

(“URNA”) issued $1.1 billion aggregate principal amount of senior unsecured notes at a 6 1 / 8 percent interest rate, while URNA's issuance in August 2021 of $750 aggregate principal amount of senior unsecured notes was at a 3 ¾ percent interest rate.

Additionally, the weighted average interest rates on our variable debt instruments were 6.3 percent in 2024 and 1.4 percent in 2021.

Although interest rates declined in 2025 (the weighted average interest rates on our variable debt instruments were 5.4 percent in 2025 and 6.3 percent in 2024), interest rates on our debt instruments have increased in recent years.

For example, in December 2025, United Rentals (North America), Inc.

(“URNA”) issued $1.5 billion principal amount of senior unsecured notes at a 5 3 / 8 percent interest rate, while URNA's issuance in August 2021 of $750 principal amount of senior unsecured notes was at a 3 ¾ percent interest rate.

Additionally, the weighted average interest rate on our variable debt instruments was 1.4 percent in 2021, as compared to 5.4 percent in 2025.

We have experienced and are continuing to experience inflationary pressures.

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• The continued expansion and cross-selling of adjacent specialty and services products, which enables us to provide a “one-stop” shop for our customers .

We believe that the expansion of our specialty business, as exhibited by our acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) in March 2024, which is discussed in note 4 to the consolidated financial statements, as well as our tools and onsite services offerings, further positions United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings;

We believe that the expansion of our specialty business, as exhibited by our acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”) in March 2024 and other recent, smaller acquisitions in Australia, as well as our tools and onsite services offerings, further positions United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings;

• The pursuit of strategic acquisitions to continue to expand our core equipment rental business, as exhibited by our acquisition of assets of Ahern Rentals, Inc.

(“Ahern Rentals”) in December 2022, as well as the pending acquisition of H&E Equipment Services, Inc.

d/b/a H&E Rentals (“H&E”) that is discussed below, which is expected to close in the first quarter of 2025.

(“Ahern Rentals”) in December 2022, as well as other smaller, more recent acquisitions.

Strategic acquisitions allow us to invest our capital to expand our business, further driving our ability to accomplish our strategic goals.

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For the full year 2025:

• Equipment rentals increased 8.0 percent year-over-year, including the impact of the Yak acquisition that is discussed in note 4 to the consolidated financial statements;

• Equipment rentals increased 6.0 percent year-over-year, including the impact of the Yak acquisition;

• Average OEC increased 3.9 percent year-over-year;

• Fleet productivity increased 4.1 percent including the impact of the Yak acquisition, and increased 2.7 percent excluding the impact of the Yak acquisition;

• Fleet productivity increased 2.2 percent including the impact of the Yak acquisition, and increased 2.0 percent on a pro forma basis including the pre-acquisition results of Yak for 2024;

• 69 percent of equipment rental revenue was derived from key accounts.

Key accounts are each managed by a single point of contact to enhance customer service.

Pending Acquisition of H&E

On January 13, 2025, we entered into an Agreement and Plan of Merger (the “H&E Merger Agreement”) that provides for our acquisition of H&E.

Pursuant to the H&E Merger Agreement, we expect to acquire H&E for $92 per share in cash, reflecting a total enterprise value of approximately $4.8 billion, including approximately $1.4 billion of net debt.

H&E provides its customers with a comprehensive mix of high-quality general rental fleet including aerial work platforms, earthmoving equipment, material handling equipment, and other general and specialty lines of equipment.

With approximately $2.9 billion of rental fleet at original cost as of September 30, 2024, H&E serves a diverse mix of customers across both construction and industrial markets through its network of approximately 160 branches in over 30 U.S.

For the 12 months ending September 30, 2024, H&E had revenues of $1.518 billion.

The transaction is subject to customary closing conditions, including a minimum tender of at least one share more than 50 percent of then-outstanding H&E common shares and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

We commenced a tender offer on January 28, 2025 to acquire all of the outstanding shares of H&E common stock for $92 per share in cash.

Following completion of the tender offer, we intend to acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer.

The transaction is expected to close in the first quarter of 2025.

Financial Overview

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In 2025, we took the following actions to improve our financial flexibility and liquidity, and to position us to invest the necessary capital in our business (see note 11 to the consolidated financial statements for further discussion of our debt instruments):

• Issued $1.1 billion aggregate principal amount of 6 1 / 8 percent Senior Notes due 2034.

The issued debt, together with drawings on our ABL facility, was used to fund the Yak acquisition that is discussed in note 4 to the consolidated financial statements;

• Amended our term loan facility, primarily to extend the maturity date to February 2031 and to increase the facility size to $1.0 billion;

• Amended our accounts receivable securitization facility, primarily to extend the maturity date and to increase the facility size from $1.3 billion to $1.5 billion.

The facility expires in June 2025 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility.

• Amended our ABL facility, primarily to increase the facility size from $4.25 billion to $4.50 billion and to extend the maturity date to July 2030;

• Amended our term loan facility, which bears interest based on the Secured Overnight Financing Rate (“SOFR”) plus a spread, primarily to reduce the spread;

• Redeemed all $500 principal amount of our 5 1 / 2 percent Senior Notes due 2027;

• Issued $1.5 billion principal amount of 5 3 / 8 percent Senior Notes due 2033.

The issued debt was used to fund the redemption of the 5 1 / 2 percent Senior Notes due 2027 noted above and to reduce drawings on our ABL facility.

As of December 31, 2025, we had available liquidity of $3.322 billion, comprised of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.

In October 2022, our Board of Directors authorized a $1.25 billion share repurchase program, which was completed in the first quarter of 2024.

In January 2024, our Board of Directors authorized a $1.5 billion share repurchase program, and repurchases under this program began in March 2024, following the completion of the $1.25 billion program.

We repurchased $1.25 billion under this program in 2024.

We have paused repurchases under the program due to our pending acquisition of H&E.

As discussed above, on January 13, 2025, we entered into a definitive merger agreement to acquire H&E, which is expected to close in the first quarter of 2025.

We currently intend to complete the share repurchase program;

however, we will re-evaluate the timing over which we expect to do so as we integrate H&E and assess other potential uses of capital.

In April 2025, our Board of Directors authorized a $1.5 billion share repurchase program.

Subsequent to the enactment of the new federal tax legislation discussed below (see note 13 to the consolidated financial statements) in July 2025, and with consideration of the expected cash flow benefit associated with the legislation, our Board of Directors approved an increase in the size of the share repurchase program, from $1.5 billion to $2.0 billion.

We repurchased $1.65 billion under this program in 2025, and intend to complete the program in the first quarter of 2026.

Including the repurchases made under a prior program that was completed in the first quarter of 2025, total share repurchases were $1.90 billion in 2025.

On January 28, 2026, our Board of Directors authorized a new $5.0 billion share repurchase program.

The program is expected to commence after completion of the current program, and does not have an established expiration date.

We intend to repurchase $1.15 billion under the program in 2026.

A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock.

The repurchases above (as well as the total program sizes) do not include the excise tax, which totaled $13 in 2024.

The repurchases above (as well as the program sizes) do not include the excise tax, which totaled $18 in 2025 (the total excise tax amount relates to both the current program and the prior program that was completed in the first quarter of 2025).

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023.

We did not pay any dividends prior to 2023, and in 2024 and 2023, we paid dividends totaling $434 ($6.52 per share) and $406 ($5.92 per share), respectively.

We paid dividends totaling $464 ($7.16 per share), $434 ($6.52 per share) and

$406 ($5.92 per share) in 2025, 2024 and 2023, respectively.

On January 28, 2026, our Board of Directors declared a quarterly dividend of $1.97 per share, payable on February 25, 2026 to stockholders of record as of February 11, 2026.

Merger Termination Benefit.

In January 2025, we announced that we had signed a merger agreement to acquire H&E Equipment Services, Inc.

d/b/a H&E Rentals (“H&E”).

In February 2025, following the termination of that merger agreement, we received a break-up fee of $64.

Our results for the year ended December 31, 2025 include a net $39 merger termination benefit, which reflects this break-up fee, net of related transaction costs.

The net merger termination benefit is comprised of $12 of professional fees recorded in selling, general and administrative ("SG&A") expenses, $13 of bridge financing fees recorded in interest expense, net, and the break-up fee of $64 recorded in other income, net.

For the year ended December 31, 2025, the impact of the merger termination was a $29 after-tax benefit, or $0.45 per diluted share, for net income and a $52 benefit for adjusted EBITDA (as defined below).

Net income and diluted earnings per share for each of the three years in the period ended December 31, 2025 are presented below.

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Diluted earnings per share $ 38.61 $ 38.69 $ 35.28

Net income and diluted earnings per share for the year ended December 31, 2025 include the impact of the H&E merger termination benefit discussed above.

The impact of the merger termination for the year ended December 31, 2025 was a net after-tax benefit of $29, or $0.45 per diluted share.

The merger termination did not impact the results for any other year above.

Net income and diluted earnings per share for each of the three years in the period ended December 31, 2025 include the after-tax impacts of the items below.

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Asset impairment charge (5) (4) (0.06) (3) (0.05) — —

Loss on repurchase/redemption/amendment of debt (6) (1) (0.01) — — (13) (0.18)

Debt related losses (1) (0.02) (1) (0.01) — —

(1) This reflects the amortization of the intangible assets acquired in the major acquisitions that significantly impact our operations (the “major acquisitions,” each of which had annual revenues of over $200 prior to acquisition).

(2) This reflects the impact of extending the useful lives of equipment acquired in certain major acquisitions, net of the impact of additional depreciation associated with the fair value mark-up of such equipment.

The increase in 2023 primarily reflects the impact of the Ahern Rentals acquisition.

(3) This reflects additional costs recorded in cost of rental equipment sales associated with the fair value mark-up of rental equipment acquired in certain major acquisitions that was subsequently sold.

The year-over-year increase in 2023 and decrease in 2024 primarily reflect the impact of the Ahern Rentals acquisition.

The year-over-year decreases in 2025 and 2024 primarily reflect the impact of the Ahern Rentals acquisition.

(4) This primarily reflects severance and branch closure charges associated with our restructuring programs.

For additional information on the restructuring charges, which generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, see “Results of Operations-Other costs/(income)-restructuring charges” below.

The amounts above primarily reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.

As of December 31, 2024, there were no open restructuring programs.

The restructuring charges generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition.

The amounts above primarily reflect charges associated with the restructuring program initiated following the December 2022 acquisition of Ahern Rentals.

See note 5 to the consolidated financial statements for additional detail on our restructuring programs.

(5) This reflects write-offs of leasehold improvements and other fixed assets.

(6) This primarily reflects the difference between the net carrying amount and the total purchase price of the redeemed notes.

EBITDA GAAP Reconciliations .

EBITDA represents the sum of net income, provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization.

Adjusted EBITDA represents EBITDA plus the sum of the restructuring charge, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet.

Adjusted EBITDA represents EBITDA plus the sum of the restructuring charge, stock compensation expense, net, and the impact of the fair value mark-up of

acquired fleet.

See below for further detail on each adjusting item.

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However, EBITDA and adjusted EBITDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income or cash flow from operating activities as indicators of operating performance or liquidity.

Adjusted EBITDA for the year ended December 31, 2025 includes the impact of the H&E merger termination benefit discussed above.

The impact of the merger termination for the year ended December 31, 2025 was a net after-tax benefit of $29 for net income and a $52 benefit for adjusted EBITDA.

The merger termination did not impact the results for any other year in the table below.

The table below provides a reconciliation between net income and EBITDA and adjusted EBITDA:

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Stock compensation expense, net (2) (134) (112) (94)

Loss on repurchase/redemption/amendment of debt (4) (1) — (17)

Debt related losses (4) (15) (1) —

Changes in assets and liabilities 129 121 107

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(1) This primarily reflects severance and branch closure charges associated with our restructuring programs.

The amounts above primarily reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.

As of December 31, 2024, there were no open restructuring programs.

The restructuring charges generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition.

The amounts above primarily reflect charges associated with the restructuring program initiated following the December 2022 acquisition of Ahern Rentals.

See note 5 to the consolidated financial statements for additional detail on our restructuring programs.

(2) Represents non-cash, share-based payments associated with the granting of equity instruments.

The year-over-year increase in 2023 and decrease in 2024 primarily reflect the impact of the Ahern Rentals acquisition.

(4) This primarily reflects the difference between the net carrying amount and the total purchase price of the redeemed notes.

For the year ended December 31, 2024, year-over-year, net income increased $151, or 6.2 percent, and net income margin decreased 10 basis points to 16.8 percent (because net income margin did not change significantly year-over-year, further explanation of the change is not included herein).

For the year ended December 31, 2024, year-over-year, adjusted EBITDA increased $303, or 4.4 percent, and adjusted EBITDA margin decreased 110 basis points to 46.7 percent.

The year-over-year decrease in the adjusted EBITDA margin primarily reflects a 50 basis point decrease in equipment rentals gross margin (excluding depreciation and stock compensation expense) and a 600 basis point decrease in gross margin from sales of rental equipment (excluding the adjustment reflected in the table above for the impact of the fair value mark-up of acquired fleet).

The decreased gross margin from equipment rentals (excluding depreciation and stock compensation expense) primarily reflects the (i) impact of a higher proportion of 2024 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, (ii) inflation and (iii) normal cost variability.

The decreased gross margin from sales of rental equipment (excluding the adjustment for the impact of the fair value mark-up of acquired fleet) primarily reflects the continued normalization of the used equipment market, including pricing.

The year-over-year decreases in 2025 and 2024 primarily reflect the impact of the Ahern Rentals acquisition.

(4) The amount for the year ended December 31, 2025 primarily reflects bridge financing fees associated with the terminated H&E acquisition discussed above.

For the year ended December 31, 2025, net income decreased $81, or 3.1 percent, to $2.494 billion, which included the $29 after-tax H&E merger termination benefit discussed above.

Net income margin decreased 130 basis points to 15.5 percent, primarily driven by decreased gross margin from equipment rentals, particularly for the specialty segment, as discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”), partially offset by the impact of the H&E break-up fee discussed above.

For the year ended December 31, 2025, adjusted EBITDA increased $168, or 2.3 percent, to $7.328 billion, which included the $52 merger termination benefit discussed above.

Adjusted EBITDA margin decreased 120 basis points to 45.5 percent, primarily reflecting 1) decreased gross margin from equipment rentals (excluding depreciation and stock compensation expense) and 2) decreased gross margin from sales of rental equipment (excluding the adjustment for the impact of the fair value mark-up of acquired fleet), which primarily reflected the normalization of the used equipment market, including pricing, partially offset by 3) the impact of the H&E break-up fee discussed above.

The decreased gross margin from equipment rentals is discussed below (see “Results of Operations-Segment Equipment Rentals Gross Profit”).

While the gross margin discussion below includes the impact of depreciation, the other non-depreciation items discussed below, including inflation, normal cost variability, and a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals, for the specialty segment, were the primary drivers of the decrease in gross margin from equipment rentals on the adjusted EBITDA basis (excluding depreciation and stock compensation expense).

Revenues for each of the three years in the period ended December 31, 2025 were as follows:

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Total change in equipment rentals 6.0% 8.0%

*Pro forma equipment rentals variance components (4):

Year-over-year change in average OEC 10.4%

Assumed year-over-year inflation impact (1) (1.5)%

Fleet productivity (2) 2.8%

Contribution from ancillary and re-rent revenue (3) (0.4)%

Total change in equipment rentals 11.3%

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(3) Reflects the combined impact of changes in the other types of equipment rentals revenue (see note 3 for further detail), excluding owned equipment rental revenue.

(4) We completed the acquisition of Ahern Rentals in December 2022.

The pro forma information includes the standalone, pre-acquisition results of Ahern Rentals.

Pro forma information is not reflected above for 2024 versus 2023 because Ahern Rentals was fully included in our results for both years.

Equipment rentals include our revenues from renting equipment, as well as revenue related to the fees we charge customers:

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Equipment rentals increased 6.0 percent, primarily due to a 2.2 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.9 percent increase in average OEC.

Fleet productivity increased 2.7 percent excluding the impact of the Yak acquisition.

Fleet productivity increased 2.0 percent on a pro forma basis including the pre-acquisition results of Yak for 2024.

Sales of rental equipment did not change significantly year-over-year.

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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.

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.

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In connection with our goodwill impairment test that was conducted as of October 1, 2025, we bypassed the optional qualitative assessment for each reporting unit and quantitatively compared the fair values of our reporting units with their carrying amounts.

Our goodwill impairment testing as of this date indicated that all of our reporting units, including our Matting Solutions reporting unit, which was created following the March 2024 acquisition of Yak that is discussed in note 4 to the consolidated financial statements and which includes the assets acquired in the Yak acquisition, and our Mobile Storage reporting unit, which is discussed below associated with the goodwill impairment test that was conducted as of October 1, 2023, had estimated fair values which exceeded their respective carrying amounts by at least 60 percent.

Our goodwill impairment testing as of this date indicated that all of our reporting units had estimated fair values which exceeded their respective carrying amounts by at least 32 percent.

In connection with our goodwill impairment test that was conducted as of October 1, 2024, we bypassed the optional qualitative assessment for each reporting unit and quantitatively compared the fair values of our reporting units with their carrying amounts.

Our goodwill impairment testing as of this date indicated that all of our reporting units, excluding our Mobile Storage reporting unit, had estimated fair values which exceeded their respective carrying amounts by at least 54 percent.

completed the acquisition of General Finance in May 2021, and all of the assets in the Mobile Storage reporting unit were acquired in the General Finance acquisition.

The estimated fair value of our Mobile Storage reporting unit exceeded its carrying amount by eight percent.

As all of the assets in the Mobile Storage reporting unit were recorded at fair value as of the May 2021 acquisition date, we expected the percentage by which the fair value for this reporting unit exceeded the carrying value to be significantly less than the equivalent percentages determined for our other reporting units.

Our goodwill impairment testing as of this date indicated that all of our reporting units had estimated fair values which exceeded their respective carrying amounts by at least 60 percent.

Impairment of Long-lived Assets (Excluding Goodwill).

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We also specifically review the financial performance of our rental equipment.

Such review includes an estimate of the future rental revenues from our rental assets based on current and expected utilization levels, the age of the assets and their remaining useful lives.

Such review includes an estimate of

the future rental revenues from our rental assets based on current and expected utilization levels, the age of the assets and their remaining useful lives.

Additionally, we estimate when the assets are expected to be removed or retired from our rental fleet as well as the expected proceeds to be realized upon disposition.

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In 2021, we remitted the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs.

The taxes recorded associated with the remitted cash were immaterial.

We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested.

In the fourth quarter of 2025, in connection with a restructuring of our international holdings, we identified $324 of distributable foreign earnings that we have determined should no longer be considered indefinitely reinvested.

We expect to remit the cash that is no longer considered indefinitely reinvested in 2026, and, in the fourth quarter of 2025, we recorded immaterial taxes associated with the planned repatriation.

We continue to expect that our undistributed foreign earnings, excluding the distributable foreign earnings described above, will be indefinitely reinvested.

If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S.

state income taxes.

At December 31, 2025, unremitted earnings of foreign subsidiaries were $1.621 billion.

Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.

Results of Operations

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The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities.

The general rentals segment’s customers include construction and industrial companies, manufacturers,

utilities, municipalities, homeowners and government entities.

The general rentals segment’s customers include construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities.

This segment operates throughout the United States and Canada.

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As discussed in note 4 to our consolidated financial statements, our general rentals reporting segment reflects the aggregation of four geographic divisions—Central, Northeast, Southeast and West.

Historically, there have occasionally been variances in the levels of equipment rentals gross margins achieved by these divisions, though such variances have generally been small (close to or less than 10 percent, measured versus the equipment rentals gross margins of the aggregated general rentals' divisions).

Historically, there have occasionally been variances in the levels of equipment rentals gross margins achieved by these divisions, though such variances have generally

been small (close to or less than 10 percent, measured versus the equipment rentals gross margins of the aggregated general rentals' divisions).

For the five year period ended December 31, 2025, there was no general rentals' division with an equipment rentals gross margin that differed materially from the equipment rentals gross margin of the aggregated general rentals' divisions.

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2025 equipment rentals of $13.8 billion increased 6.0 percent year-over-year, primarily due to a 2.2 percent increase in fleet productivity, which includes the impact of the Yak acquisition, and a 3.9 percent increase in average OEC.

Fleet productivity increased 2.7 percent excluding the impact of the Yak acquisition.

Fleet productivity increased 2.0 percent on a pro forma basis including the pre-acquisition results of Yak for 2024.

On a segment basis, equipment rentals represented 83 percent and 91 percent of total revenues for general rentals and specialty, respectively.

General rentals equipment rentals increased 2.5 percent as compared to 2024.

Specialty rentals increased 25.2 percent as compared to 2023, primarily due to the impact of the Yak acquisition and increased average OEC.

Specialty equipment rentals increased 16.9 percent year-over-year excluding the revenue from the acquired Yak locations.

Specialty rentals increased

13.6 percent, including the impact of the Yak acquisition, as compared to 2024, primarily due to increased average OEC.

Specialty equipment rentals increased 12.2 percent year-over-year including the pre-acquisition results of Yak for 2024.

Sales of rental equipment .

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For the three years in the period ended December 31, 2025, sales of new equipment represented approximately 2 percent of our total revenues.

2024 sales of new equipment of $282 increased 29.4 percent from 2023, primarily due to the impact of the Yak acquisition and supply chain normalization.

2025 sales of new equipment of $348 increased 23.4 percent from 2024, primarily due to supply chain normalization.

Contractor supplies sales .

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2025 service and other revenues did not change significantly from 2024.

Fourth Quarter Items .

There were no unusual or infrequently occurring items recognized in the fourth quarter of 2024 or 2023 that had a material impact on our financial statements.

Segment Equipment Rentals Gross Profit

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For the three years in the period ended December 31, 2025, general rentals accounted for 69 percent of total equipment rentals and 63 percent of total equipment rentals gross profit.

For the year ended December 31, 2024, general rentals’ equipment rentals gross profit increased by $13, and equipment rentals gross margin decreased by 50 basis points, from 2023, primarily due to the impact of inflation and normal cost variability, including increases in insurance and certain other costs.

For the year ended December 31, 2025, general rentals’ equipment rentals gross profit decreased by $7, and equipment rentals gross margin decreased by 90 basis points, from 2024, primarily due to the impact of inflation and normal cost variability, particularly in delivery and labor and benefits costs.

For the year ended December 31, 2025, equipment rentals gross profit increased by $57, and equipment rentals gross margin decreased by 450 basis points from 2024.

Gross margin decreased primarily due to increased depreciation expense, which largely reflected the impact of the Yak acquisition.

Gross margin decreased primarily due to 1) increased depreciation expense, including the impact of the Yak acquisition and growth in the acquired Yak locations, 2) inflation and normal cost variability, particularly in delivery costs, and 3) the impact of a higher proportion of 2025 revenue from ancillary revenues, which generate lower margins than owned equipment rentals.

The increase in delivery costs also related in part to repositioning fleet to efficiently support strong demand.

Gross Margin .

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2025 gross margin of 38.2 percent decreased 190 basis points from 2024.

Equipment rentals gross margin for 2024 was flat year-over-year.

Gross margin from sales of rental equipment decreased 320 basis points from 2023, which primarily reflected the continued normalization of the used equipment market, including pricing.

Equipment rentals gross margin decreased 190 basis points from 2024, primarily due to reduced margins in the specialty segment, as discussed above.

Additionally, as discussed above, equipment rentals gross margin for the general rentals segment decreased primarily due to inflation and normal cost variability, particularly in delivery and labor and benefits costs.

Gross margin from sales of rental equipment decreased 180 basis points from 2024, which primarily reflected the normalization of the used equipment market, including pricing.

The gross margin fluctuations from sales of new equipment, contractor supplies sales and service and other revenues generally reflect normal variability, and such revenue types did not account for a significant portion of total gross profit (gross profit for these revenue types represented 4 percent of total gross profit for the year ended December 31, 2025).

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SG&A expense primarily includes sales force compensation, information technology costs, third party professional fees, management salaries, bad debt expense and clerical and administrative overhead.

SG&A expense as a percentage of revenue for the year ended December 31, 2024 was flat year-over-year.

SG&A expense as a percentage of revenue for the year ended December 31, 2025 did not change significantly year-over-year.

The restructuring charges primarily reflect severance and branch closure charges associated with our restructuring programs.

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The designated restructuring programs generally involve the closure of a large number of branches over a short period of time, often in periods following a major acquisition, and result in significant costs that we would not normally incur absent a major acquisition or other triggering event that results in the initiation of a restructuring program.

The year-over-year decrease in restructuring charges for the year ended December 31, 2024 primarily reflects 2023 charges associated with the restructuring program initiated following the December 2022 acquisition of Ahern Rentals.

The amounts above primarily reflect charges associated with the restructuring program initiated following the December 2022 acquisition of Ahern Rentals.

Since the first such program was initiated in 2008, we have completed seven restructuring programs and have incurred total restructuring charges of $384.

We currently have no open restructuring programs, and the total liability associated with our restructuring programs was $17 as of December 31, 2024.

See note 5 to the consolidated financial statements for additional detail on our restructuring programs.

Non-rental depreciation and amortization includes (i) the amortization of other intangible assets and (ii) depreciation expense associated with equipment that is not offered for rent (such as computers and office equipment) and amortization expense associated with leasehold improvements.

Our other intangible assets consist of customer relationships, non-compete agreements and trade names and associated trademarks.

Interest expense, net for the year ended December 31, 2024 increased by 8.8 percent year-over-year primarily due to increased average debt, including the debt issued to partially fund the Yak acquisition discussed above.

Interest expense, net for the year ended December 31, 2025 did not change significantly year-over-year, as the impact of decreased variable debt interest rates was offset by increased average debt.

The weighted average interest rates on our variable debt instruments were 5.4 percent and 6.3 percent for the years December 31, 2025 and 2024, respectively.

Interest expense, net

for the year December 31, 2025 includes the bridge financing fees associated with the terminated H&E acquisition discussed above.

Other income, net primarily includes (i) currency gains and losses, (ii) finance charges, (iii) gains and losses on sales of non-rental equipment and (iv) other miscellaneous items.

Other income, net for the year ended December 31, 2025 includes $64 of income associated with the receipt of the break-up fee associated with the terminated H&E acquisition discussed above.

A detailed reconciliation of the effective tax rates to the U.S.

federal statutory income tax rate is included in note 13 to our consolidated financial statements.

Fourth Quarter Items .

In the fourth quarter of 2025, we issued $1.5 billion principal amount of 5 3 / 8 percent Senior Notes due 2033.

The net proceeds of the issuance were used to redeem all $500 principal amount of our 5 1 / 2 percent Senior Notes due 2027 and to reduce drawings on our ABL facility.

There were no unusual or infrequently occurring items recognized in the fourth quarter of 2024 that had a material impact on our financial statements.

Balance sheet.

Prepaid expenses and other assets increased by $100, or 74.1 percent, from December 31, 2023 to December 31, 2024, primarily due to an increase in income taxes receivable which reflected required tax payments exceeding the estimated tax accruals (see note 6 to the consolidated financial statements for further detail).

Operating lease right-of-use assets increased by $238, or 21.7 percent, and operating lease liabilities increased by $194, or 21.7 percent, from December 31, 2023 to December 31, 2024, and both increases primarily reflected increased amounts of real estate and equipment leased under operating leases.

Accounts payable decreased by $157, or 17.3 percent, from December 31, 2023 to December 31, 2024, primarily reflecting normal variability in business activity and the timing of payments.

See the consolidated statements of cash flows for further information on changes in cash and cash equivalents, the consolidated statements of stockholders’ equity for further information on changes in stockholders’ equity, note 8 for further detail on property and equipment, net, note 9 for further detail on goodwill, note 10 for further detail on accrued expenses and other liabilities, and note 12 for further detail on short-term and long-term debt.

Prepaid expenses and other assets increased by $164, or 69.8 percent, from December 31, 2024 to December 31, 2025, primarily due to an increase in income taxes receivable, which reflected required tax payments exceeding the estimated tax accruals.

Liquidity and Capital Resources.

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See “Financial Overview” above for a summary of the 2025 capital structure actions taken to improve our financial flexibility and liquidity.

In October 2022, our Board of Directors authorized a $1.25 billion share repurchase program, which was completed in the first quarter of 2024.

We repurchased $1.25 billion under this program in 2024.

We have paused repurchases under the program due to our pending acquisition of H&E.

As discussed in note 19 to the consolidated financial statements, on January 13, 2025, we entered into a definitive merger agreement to acquire H&E, which is expected to close in the first quarter of 2025.

We currently intend to complete the share repurchase program;

however, we will re-evaluate the timing over which we expect to do so as we integrate H&E and assess other potential uses of capital.

In April 2025, our Board of Directors authorized a $1.5 billion share repurchase program, and repurchases under the program began in April 2025.

We repurchased $1.65 billion under this program in 2025, and intend to complete the program in the first quarter of 2026.

On January 28, 2026, our Board of Directors authorized a new $5.0 billion share repurchase program.

We plan to begin repurchases under the new program following the planned completion of the existing $2.0 billion share repurchase program in the first quarter of 2026.

This program does not have an established expiration date, and we intend to repurchase $1.15 billion under the program in 2026.

A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock.

The repurchases above (as well as the total program sizes) do not include the excise tax, which totaled $13 in 2024.

Since 2012, we have repurchased a total of $7.478 billion (inclusive of immaterial excise taxes, which were first imposed in 2023) of Holdings' common stock under our share repurchase programs (comprised of eight programs that have ended and the current program).

The repurchases above (as well as the program sizes) do not include the excise tax, which totaled $18 in 2025 (the total excise tax amount relates to both the current program and a prior program that was completed in the first quarter of 2025).

Since 2012, we have repurchased a total of $9.396 billion (inclusive of excise taxes, which were first imposed in 2023) of Holdings' common stock under our share repurchase programs (comprised of nine programs that have ended and the current program).

Our Board of Directors also approved our first-ever quarterly dividend program in January 2023, and the first dividend under the program was paid in February 2023.

We did not pay any dividends prior to 2023, and during 2024 and 2023, we paid dividends totaling $434 ($6.52 per share) and $406 ($5.92 per share), respectively.

We paid dividends totaling $464 ($7.16 per share), $434 ($6.52 per share) and $406 ($5.92 per share) in 2025, 2024 and 2023, respectively.

On January 28, 2026, our Board of Directors declared a quarterly dividend of $1.97 per share, payable on February 25, 2026 to stockholders of record as of February 11, 2026.

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(1) The outstanding and maximum amounts of debt under the ABL facility exceeded the average outstanding amount primarily due to the use of borrowings under the facility to fund seasonal expenditures and acquisition activity.

(1) As discussed above, in the fourth quarter of 2025, we issued $1.5 billion principal amount of 5 3 / 8 percent Senior Notes due 2033, and used part of the net proceeds to reduce drawings on the ABL facility, which contributed to the outstanding amount above being less than the average and maximum amounts.

Additionally, the maximum amount reflects the use of borrowings under the facility to fund seasonal expenditures.

(2) As discussed in note 11 to the consolidated financial statements, the accounts receivable securitization facility expires on June 24, 2026 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility.

(3) The maximum amount of debt under the accounts receivable securitization facility exceeded the average outstanding amount primarily due to normal usage of increased availability under the facility.

Borrowings under the accounts receivable securitization facility are permitted only to the extent that the face amount of the receivables in the collateral pool, net of applicable reserves and other deductions, exceeds the outstanding loans.

The maximum amount of debt above reflects normal usage of the available borrowings based on the amount of the receivables in the collateral pool (see note 12 to the consolidated financial statements for further detail).

In May 2024, the accounts receivable securitization facility was amended, primarily to extend the maturity date and to increase the facility size from $1.3 billion to $1.5 billion, which also contributed to the difference in the average and maximum amounts outstanding.

We expect that our principal short-term (over the next 12 months) and long-term needs for cash relating to our operations will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory items offered for sale, (iii) payments due under operating leases, (iv) debt service, (v) debt repayment or redemption, (vi) share repurchases, (vii) dividends and (viii) acquisitions.

We plan to fund such cash requirements from our existing sources of cash.

We may also seek additional financing through the securitization of some of our real estate, the use of additional operating leases or other financing sources as market conditions permit, and the financing for our pending acquisition of H&E may include the issuance of debt securities and/or term loan borrowings.

We may also seek additional financing through the securitization of some of our real estate, the use of additional operating leases or other financing sources as market conditions permit.

The table below presents information on payments coming due under the most significant categories of our needs for cash (excluding operating cash flows pertaining to normal business operations, such as human capital costs, which are not accurately estimable) as of December 31, 2025:

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The only financial covenant that currently exists under the ABL facility is the fixed charge coverage ratio.

Subject to certain limited exceptions specified in the ABL facility, the fixed charge coverage ratio covenant under the ABL facility will only apply in the future if specified availability under the ABL facility falls below 10 percent of the maximum revolver amount under the ABL facility.

When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility.

As of December 31, 2025, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable.

Under our accounts receivable securitization facility, we are required, among other things, to maintain certain

financial tests relating to:

Under our accounts receivable securitization facility, we are required, among other things, to maintain certain financial tests relating to:

(i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding.

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Sources and Uses of Cash .

During 2025, we (i) generated cash from operating activities of $5.190 billion, (ii) generated cash from the sale of rental and non-rental equipment of $1.469 billion and (iii) received cash from debt proceeds, net of payments, of $653.

We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $4.528 billion, (ii) purchase other companies for $357, (iii) purchase shares of our common stock for $1.969 billion and (iv) pay dividends of $464.

During 2024, we (i) generated cash from operating activities of $4.546 billion, (ii) generated cash from the sale of rental and non-rental equipment of $1.588 billion and (iii) received cash from debt proceeds, net of payments, of $1.748 billion.

We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $4.127 billion, (ii) purchase other companies for $1.655 billion, (iii) purchase shares of our common stock for $1.571 billion and (iv) pay dividends of $434.

During 2023, we (i) generated cash from operating activities of $4.704 billion and (ii) generated cash from the sale of rental and non-rental equipment of $1.634 billion.

We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $4.070 billion, (ii) purchase other companies for $574, (iii) purchase shares of our common stock for $1.070 billion and (iv) pay dividends of $406.

Free Cash Flow GAAP Reconciliation

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Free cash flow $ 2,181 $ 2,058 $ 2,306

Free cash flow for the year ended December 31, 2024 was $2.058 billion, a decrease of $248 as compared to $2.306 billion for the year ended December 31, 2023.

Free cash flow decreased primarily due to lower cash provided by operating activities, which largely reflected the impact of higher cash tax payments and other working capital activities, partially offset by increased net income.

Free cash flow for the year ended December 31, 2025 was $2.181 billion, an increase of $123, or 6.0 percent, as compared to $2.058 billion for the year ended December 31, 2024.

Relationship between Holdings and URNA .

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Information Regarding Guarantors of URNA Indebtedness

URNA is 100 percent owned by Holdings and has certain outstanding indebtedness that is guaranteed by both Holdings and, with the exception of its U.S.

special purpose vehicle which holds receivable assets relating to the Company’s accounts receivable securitization facility (the “SPV”) and a foreign subsidiary holding company acquired in connection with the General Finance acquisition, all of URNA’s U.S.

subsidiaries (the “guarantor subsidiaries”).

Other than the guarantee by our Canadian

subsidiary of URNA's indebtedness under the ABL facility, none of URNA’s indebtedness is guaranteed by URNA's foreign subsidiaries, the SPV, or the foreign subsidiary holding company acquired in connection with the General Finance acquisition (together, the “non-guarantor subsidiaries”).

URNA is 100 percent-owned by Holdings and has certain series of its senior notes that are guaranteed by both Holdings and certain U.S.

subsidiaries of URNA, including United Rentals Highway Technologies Gulf, LLC, United Rentals (Delaware), Inc.

and United Rentals Realty, LLC (together, the “guarantor subsidiaries”).

Other than the guarantee by our Canadian subsidiary of URNA's indebtedness under the ABL facility, none of URNA’s indebtedness is guaranteed by URNA's foreign subsidiaries, the U.S.

special purpose vehicle which holds receivable assets relating to the Company’s accounts receivable securitization facility (the “SPV”), certain immaterial subsidiaries or the foreign subsidiary holding company acquired in connection with the General Finance acquisition (together, the “non-guarantor subsidiaries”).

The receivable assets owned by the SPV have been sold or contributed by URNA to the SPV and are not available to satisfy the obligations of URNA or Holdings’ other subsidiaries.

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The guarantees of Holdings and the guarantor subsidiaries are made on a joint and several basis.

The guarantees of the guarantor subsidiaries are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met, designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants or the notes being rated investment grade by both Standard & Poor’s Ratings Services and Moody’s Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA.

The guarantees of the guarantor subsidiaries are not full and unconditional because a guarantor subsidiary can be automatically released and relieved of its obligations under certain circumstances, including sale of the guarantor subsidiary, the sale of all or substantially all of the guarantor subsidiary's assets, the requirements for legal defeasance or covenant defeasance under the applicable indenture being met, designating the guarantor subsidiary as an unrestricted subsidiary for purposes of the applicable covenants or the notes being rated investment grade by certain rating agencies as specified in the applicable indenture.

Like the Holdings guarantees, the guarantees of the guarantor subsidiaries are subject to subordination provisions (to the same extent that the obligations of the issuer under the relevant notes are subordinated to other debt of the issuer) and to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws.

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The guarantees of URNA’s indebtedness are effectively junior to any indebtedness of our subsidiaries that are not guarantors, including our foreign subsidiaries.

As of December 31, 2024, the indebtedness of our non-guarantors was comprised of (i) $1.085 billion of outstanding borrowings by the SPV in connection with the Company’s accounts receivable securitization facility, (ii) $104 of outstanding borrowings under the ABL facility by non-guarantor subsidiaries and (iii) $11 of finance leases of our non-guarantor subsidiaries.

As of December 31, 2025, the indebtedness of our non-guarantors was comprised of (i) $1.459 billion of outstanding borrowings by the SPV in connection with the Company’s accounts receivable securitization facility, (ii) $136 of

outstanding borrowings under the ABL facility by non-guarantor subsidiaries and (iii) $13 of finance leases of our non-guarantor subsidiaries.

Covenants in the agreements governing our ABL facility, term loan facility and certain other debt instruments impose limitations on our ability to make share repurchases and dividend payments, subject to important exceptions that would allow us to make such repurchases or payments under certain conditions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis