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What changed in United Rentals's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of United Rentals's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+347 added−350 removedSource: 10-K (2025-01-29) vs 10-K (2024-01-24)

Top changes in United Rentals's 2024 10-K

347 paragraphs added · 350 removed · 281 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+10 added−13 removed42 unchanged
Biggest changeThe data below should be read in conjunction with, and is qualified by reference to, our Management’s Discussion and Analysis and our consolidated financial statements and notes thereto contained elsewhere in this report. 1 Table of Contents 2023 2022 PERFORMANCE MEASURES Total revenues (in millions) $14,332 $11,642 Equipment rental revenue percent of total revenues 84% 87% Equipment rental revenue variance components: Year-over-year change in average original equipment cost (“OEC”) 21.9% 13.6% Assumed year-over-year inflation impact (1) (1.5)% (1.5)% Fleet productivity (2) (0.7)% 9.4% Contribution from ancillary and re-rent revenue (3) (0.4)% 1.8% Total equipment rental revenue variance 19.3% 23.3% 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 equipment rental revenue variance 11.3% Key account percent of equipment rental revenue 67% 68% National account percent of equipment rental revenue 43% 42% FLEET Fleet OEC (in billions) $20.66 $19.61 Equipment classes 4,800 4,600 Equipment units 995,000 1,020,000 Fleet age in months 52.4 53.5 Equipment rental revenue percent by fleet type: General construction and industrial equipment 42% 42% Aerial work platforms 25% 24% General tools and light equipment 8% 8% Power and HVAC (heating, ventilating and air conditioning) equipment 10% 10% Trench safety equipment 5% 6% Fluid solutions equipment 7% 7% Mobile storage equipment and modular office space 3% 3% LOCATIONS/PERSONNEL Rental locations 1,584 1,521 Approximate range of branches per district 5-14 4-13 Approximate range of districts per region 6-11 6-11 Range of regions per division 3-6 2-6 Hourly employees 18,900 17,500 Salaried employees 7,400 7,100 Total employees 26,300 24,600 INDUSTRY Estimated North American market share (5) 15% 15% Estimated North American equipment rental industry revenue growth (5) 12% 14% CUSTOMERS/SUPPLIERS Largest customer percent of total revenues 1% 1% Top 10 customers percent of total revenues 4% 4% Largest supplier percent of capital expenditures 15% 10% Top 10 supplier percent of capital expenditures 48% 45% 2 Table of Contents (1) Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
Biggest changeThe data below should be read in conjunction with, and is qualified by reference to, our Management’s Discussion and Analysis and our consolidated financial statements and notes thereto contained elsewhere in this report. 1 Table of Contents 2024 2023 PERFORMANCE MEASURES Total revenues (in millions) $15,345 $14,332 Equipment rental revenue percent of total revenues 85% 84% Equipment rental revenue variance components: Year-over-year change in average original equipment cost (“OEC”) 3.5% 21.9% Assumed year-over-year inflation impact (1) (1.5)% (1.5)% Fleet productivity (2) 4.1% (0.7)% Contribution from ancillary and re-rent revenue (3) 1.9% (0.4)% Total equipment rental revenue variance 8.0% 19.3% 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 equipment rental revenue variance 11.3% Key account percent of equipment rental revenue 68% 67% National account percent of equipment rental revenue 44% 43% FLEET Fleet OEC (in billions) $21.43 $20.66 Equipment units 1,120,000 995,000 Fleet age in months 51.3 52.4 Equipment rental revenue percent by fleet type: General construction and industrial equipment 40% 42% Aerial work platforms 23% 25% General tools and light equipment 9% 8% Power and HVAC (heating, ventilating and air conditioning) equipment 11% 10% Trench safety equipment 5% 5% Fluid solutions equipment 7% 7% Mobile storage equipment and modular office space 3% 3% Surface protection mats (5) 2% —% LOCATIONS/PERSONNEL Rental locations 1,686 1,584 Approximate range of branches per district 4-13 5-14 Approximate range of districts per region 5-10 6-11 Range of regions per division 2-7 3-6 Hourly employees 19,900 18,900 Salaried employees 8,000 7,400 Total employees 27,900 26,300 INDUSTRY Estimated North American market share (6) 15% 15% Estimated North American equipment rental industry revenue growth (6) 8% 12% CUSTOMERS/SUPPLIERS Largest customer percent of total revenues 1% 1% Top 10 customers percent of total revenues 5% 4% Largest supplier percent of capital expenditures 12% 15% Top 10 supplier percent of capital expenditures 51% 48% 2 Table of Contents (1) Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
Sales of Rental Equipment . We routinely sell used rental equipment and invest in new equipment in order to manage repair and maintenance costs, as well as the composition and size of our fleet. We also sell used equipment in response to customer demand for the equipment.
We routinely sell used rental equipment and invest in new equipment in order to manage repair and maintenance costs, as well as the composition and size of our fleet. We also sell used equipment in response to customer demand for the equipment.
In 2023, based on our classification of the vertical market segments in which our equipment was used: • Industrial and other non-construction rentals represented approximately 49 percent of our rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers and infrastructure entities; • Commercial construction rentals represented approximately 46 percent of our rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment and other commercial purposes; and • Residential rentals represented approximately five percent of our rental revenue, primarily reflecting rentals of equipment for the construction and renovation of homes.
In 2024, based on our classification of the vertical market segments in which our equipment was used: • Industrial and other non-construction rentals represented approximately 49 percent of our rental revenue, primarily reflecting rentals to manufacturers, energy companies, chemical companies, paper mills, railroads, shipbuilders, utilities, retailers and infrastructure entities; • Commercial construction rentals represented approximately 46 percent of our rental revenue, primarily reflecting rentals related to the construction and remodeling of facilities for office space, lodging, healthcare, entertainment and other commercial purposes; and • Residential rentals represented approximately five percent of our rental revenue, primarily reflecting rentals of equipment for the construction and renovation of homes.
We offer a wide array of training solutions (instructor led in-person, virtual, digital, hands-on, e-learning and experience maps) for further development of our employees to help them achieve their career goals. In addition, as we did in 2023, we aim to regularly develop new training programs, launch pilot programs and expand leadership opportunities for our employees.
We offer a wide array of training solutions (instructor led in-person, virtual, digital, hands-on, e-learning and experience maps) for further development of our employees to help them achieve their career goals. In addition, as we did in 2024, we aim to regularly develop new training programs, launch pilot programs and expand leadership opportunities for our employees.
We have a fully functional back-up facility designed to enable business continuity for our core rental and financial systems in the event that our main computer facility becomes inoperative. This back-up facility also allows us to perform system upgrades and maintenance without interfering with the normal ongoing operation of our information technology systems. Strong Brand Recognition .
We have a back-up facility designed to enable business continuity for our core rental and financial systems in the event that our main computer facility becomes inoperative. This back-up facility also allows us to perform system upgrades and maintenance without interfering with the normal ongoing operation of our information technology systems. Strong Brand Recognition .
We utilize a mixture of indicators to assess the safety performance of our operations, including total recordable injury rate (TRIR), preventable motor vehicle incidents per million miles, corrective actions and near miss frequency and have disclosed a goal to further reduce our TRIR.
We utilize a mixture of indicators to assess the safety performance of our operations, including total recordable injury rate (TRIR), preventable motor vehicle incidents per million miles, corrective actions and near miss frequency and have disclosed an aspirational goal to further reduce our TRIR.
The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a limited presence in Europe, Australia and New Zealand. Products and Services Our principal products and services are described below. Equipment Rental .
The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a smaller presence in Europe, Australia and New Zealand. Products and Services Our principal products and services are described below. Equipment Rental .
Leveraging information technology to achieve greater efficiencies and improve customer service is a critical element of our strategy. Each branch is equipped with one or more workstations that are electronically linked to our other locations and to our data center. Rental transactions can be entered at these workstations, or through various mobile applications, to be processed on a real-time basis.
Leveraging information technology to achieve greater efficiencies and improve customer service is a critical element of our strategy. Each branch is equipped with one or more computers that are electronically linked to our other locations and to our data center. Rental transactions can be entered at these computers, or through various web/mobile applications, to be processed on a real-time basis.
The specialty segment rents products (and provides setup and other services on such rented equipment) including (i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, (ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, (iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and (iv) mobile storage equipment and modular office space.
The specialty segment rents products (and provides setup and other services on such rented equipment) including (i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, (ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, (iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, (iv) mobile storage equipment and modular office space and (v) surface protection mats.
Our customers can check equipment availability and pricing, and reserve equipment online, 24 hours a day, seven days a week, by accessing our equipment catalog and used equipment listing, which can be found at www.unitedrentals.com.
Our customers can check equipment availability and pricing, and reserve equipment online, 24 hours a day, seven days a week, by accessing our equipment catalog and used equipment listing, which can be found at www.unitedrentals.com. Total Control ® .
Suppliers Our strategic approach with respect to our suppliers is to maintain the minimum number of suppliers per category of equipment that can satisfy our anticipated volume and business requirements. This approach is designed to ensure that the terms 8 Table of Contents we negotiate are competitive and that there is sufficient product available to meet anticipated customer demand.
Suppliers Our strategic approach with respect to our suppliers is to maintain the minimum number of suppliers per category of equipment that can satisfy our anticipated volume and business requirements. This approach is designed to ensure that the terms we negotiate are competitive and that there is sufficient product available to meet anticipated customer demand.
Our competitors primarily include small, independent businesses with one or two rental locations; regional competitors that operate in one or more states; public companies or divisions of public companies that operate nationally or internationally; and equipment vendors and dealers who both sell and rent equipment directly to customers.
Our competitors primarily include small, independent businesses with one or two rental locations; regional competitors that operate in one or more states; public companies or divisions of public companies that operate nationally or internationally; and equipment vendors and dealers who both sell and rent equipment 8 Table of Contents directly to customers.
We also have a limited presence in Europe, Australia and New Zealand. See Item 2—Properties for further geographical detail on our rental network.
We also have a smaller presence in Europe, Australia and New Zealand. See Item 2—Properties for further geographical detail on our rental network.
For additional financial information regarding our geographic diversity, see note 5 to our consolidated financial statements. Strong and Motivated Branch Management . Each of our full-service branches has a manager who is supervised by a district manager.
For additional financial information regarding our geographic diversity, see note 5 to our consolidated financial statements. 6 Table of Contents Strong and Motivated Branch Management . Each of our full-service branches has a manager who is supervised by a district manager.
Item 1. Business United Rentals is the largest equipment rental company in the world, operates throughout the United States and Canada, and has a limited presence in Europe, Australia and New Zealand. The table below presents key information about our business as of and for the years ended December 31, 2023 and 2022.
Item 1. Business United Rentals is the largest equipment rental company in the world, operates throughout the United States and Canada, and has a smaller presence in Europe, Australia and New Zealand. The table below presents key information about our business as of and for the years ended December 31, 2024 and 2023.
Our customer base varies by branch and is determined by several factors, including the equipment mix and marketing focus of the particular branch as well as the business composition of the local economy, including construction opportunities with different customers.
Our customer base varies by branch and is determined by several factors, including the equipment mix and marketing focus of 7 Table of Contents the particular branch as well as the business composition of the local economy, including construction opportunities with different customers.
See "Industry Overview and Economic Outlook" above for a discussion of our end-markets. Environmental and Safety Regulations Our operations are subject to numerous laws governing environmental protection and occupational health and safety matters. These laws regulate issues such as wastewater, storm water, solid and hazardous wastes and materials, and air quality.
See “Industry Overview and Economic Outlook” above for a discussion of our end-markets. Environmental and Safety Regulations Our operations are subject to numerous laws governing environmental protection and occupational health and safety matters. These laws regulate issues such as wastewater, storm water, solid and hazardous wastes and materials, and air quality.
We utilize a proprietary software application, Total Control ® , which provides our key customers with a single in-house software application that enables them to monitor and manage all their equipment needs. Total Control ® is a unique customer offering 4 Table of Contents that enables us to develop strong, long-term relationships with our larger customers.
We utilize a proprietary software application, Total Control ® , which provides our key customers with a single in-house software application that enables them to monitor and manage all their equipment needs. Total Control ® is a unique customer offering that enables us to develop strong, long-term relationships with our larger customers.
We have a dedicated team responsible for reducing waste in our operational processes, with the objectives of: condensing the cycle time associated with preparing equipment for rent; optimizing our resources for delivery and pickup of equipment; improving the effectiveness and efficiency of our repair and maintenance operations; and implementing customer service best practices; • 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 have a dedicated team responsible for reducing waste in our operational processes, with the objectives of: condensing the cycle time associated with preparing equipment for rent; optimizing our resources for 4 Table of Contents delivery and pickup of equipment; improving the effectiveness and efficiency of our repair and maintenance operations; and implementing customer service best practices; • The continued expansion and cross-selling of adjacent specialty and services products, which enables us to provide a “one-stop” shop for our customers .
In 2023, our employees enhanced their skills through approximately 825,000 hours of training, including safety training, sales and leadership training and equipment-related training from our suppliers. Our performance process encourages employee check-ins throughout the year to discuss performance and career goals, as well as development opportunities at all levels across the Company.
In 2024, our employees enhanced their skills through approximately 1.2 million hours of training, including safety training, sales and leadership training and equipment-related training from our suppliers. Our performance process encourages employee check-ins throughout the year to discuss performance and career goals, as well as development opportunities at all levels across the Company.
To support these objectives, the Company’s human resources programs are designed to: keep people safe and healthy; enhance the Company’s culture through efforts aimed at making the workplace more inclusive; acquire and retain diverse talent; reward and support employees through competitive pay and benefit programs; develop talent to prepare them for critical roles and leadership positions; and facilitate internal talent mobility to create a high-performing workforce.
To support these objectives, the Company’s human resources programs are designed to: keep people safe and healthy; enhance the Company’s culture through efforts aimed at making the workplace more inclusive; acquire and retain high-performing talent; ensure employees are supported and engaged so they can provide outstanding customer service; reward and support employees through competitive pay and benefit programs; develop talent to prepare them for critical roles and leadership positions; and facilitate internal talent mobility to create a high-performing workforce.
See “Locations/Personnel” in the table above for information on employee counts. The Company focuses on the following in managing its human capital: • Health and safety: We have a safety program that focuses on implementing management systems, policies and training programs and performing assessments to see that workers are trained properly and that injuries and incidents are prevented.
See “Locations/Personnel” in the table above for information on employee counts. The Company focuses on the following in managing its human capital: • Health and safety: We have a safety program that focuses on implementing management systems, policies and training programs and performing assessments designed to promote proper training of workers and prevention of injuries and incidents.
We incur ongoing expenses associated with the performance of appropriate investigation and remediation activities at certain locations. Employees Approximately 7,400 of our employees are salaried and approximately 18,900 are hourly. Collective bargaining agreements relating to approximately 153 separate locations cover approximately 1,800 of our employees.
We incur ongoing expenses associated with the performance of appropriate investigation and remediation activities at certain locations. Employees Approximately 8,000 of our employees are salaried and approximately 19,900 are hourly. Collective bargaining agreements relating to approximately 164 separate locations cover approximately 1,800 of our employees.
In 2023, employees voluntarily donated approximately $1.6 million to the fund, and employees received 469 grants totaling approximately $1.9 million. • Training and development: The Company is committed to the continual development of its employees.
In 2024, employees voluntarily donated approximately $1.6 million to the fund, and employees received 845 grants totaling approximately $2.2 million. • Training and development: The Company is committed to the continual development of its employees.
Strategy For the past several years, as we continued to manage the impact of global economic conditions and COVID-19, we executed a strategy focused on improving the profitability of our core equipment rental business through revenue growth, margin expansion and operational efficiencies. In particular, we have focused on customer segmentation, customer service differentiation, rate management, fleet management and operational efficiency.
Strategy For the past several years, we have executed a strategy focused on improving the profitability of our core equipment rental business through revenue growth, margin expansion and operational efficiencies. In particular, we have focused on customer segmentation, customer service differentiation, rate management, fleet management and operational efficiency.
Additionally, we have conducted four company-wide stock grant programs for employees since 2014 – the most recent grant took place in 2022 and was in honor of our 25 th anniversary. • Employee experience and retention: To evaluate our employee experience and retention efforts, we monitor a number of employee measures, such as employee retention, internal promotions and referrals.
Additionally, we have conducted five company-wide stock grant programs for employees since 2014 – the most recent grant took place in 2024. 3 Table of Contents • Employee experience and retention: To evaluate our employee experience and retention efforts, we monitor a number of employee measures, such as employee retention, internal promotions and referrals.
Our North American network operates in 49 U.S. states and every Canadian province, and serves customers that range from Fortune 500 companies to small businesses and homeowners.
See Item 2—Properties for further geographical detail on our branch network. Our North American network operates in 49 U.S. states and every Canadian province, and serves customers that range from Fortune 500 companies to small businesses and homeowners.
National accounts are a subset of key accounts, which are our accounts that are managed by a single point of contact. Establishing a single point of contact for our key accounts helps us provide customer service management that is more consistent and satisfactory. Operating Efficiencies . We benefit from the following operating efficiencies: • Equipment Sharing Among Branches .
National accounts are a subset of key accounts, which are our accounts that are managed by a single point of contact. Establishing a single point of contact for our key accounts helps us provide customer service management that is more consistent and satisfactory. 5 Table of Contents Operating Efficiencies .
We sell a variety of contractor supplies including construction consumables, tools, small equipment and safety supplies. Service and Other Revenues . We offer repair and maintenance services and sell parts for equipment that is owned by our customers. Customers Our customer base is highly diversified and ranges from Fortune 500 companies to small businesses and homeowners.
We offer repair and maintenance services and sell parts for equipment that is owned by our customers. Customers Our customer base is highly diversified and ranges from Fortune 500 companies to small businesses and homeowners.
Consistent with the life-cycle approach we use to manage our fleet, the rate at which we replace used equipment with new equipment depends on a number of factors, including changing general economic conditions, growth opportunities, the market for used equipment, the age of our fleet and the need to adjust fleet composition to meet customer demand. 7 Table of Contents We utilize many channels to sell used equipment: through our national and export sales forces, which can access many resale markets across our network; at auction; through brokers; and directly to manufacturers.
Consistent with the life-cycle approach we use to manage our fleet, the rate at which we replace used equipment with new equipment depends on a number of factors, including changing general economic conditions, growth opportunities, the market for used equipment, the age of our fleet and the need to adjust fleet composition to meet customer demand.
We believe that the expansion of our specialty business, as exhibited by our acquisition of General Finance Corporation (“General Finance”) in May 2021, as well as our tools and onsite services offerings, will further position United Rentals as a single source provider of total jobsite solutions through our extensive product and service resources and technology offerings; and • The pursuit of strategic acquisitions to continue to expand our core equipment rental business, as exhibited by our recently completed acquisition of assets of Ahern Rentals, which is discussed in note 4 to the consolidated financial statements.
We believe that the expansion of our specialty business, as exhibited by our acquisition of 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; and • The pursuit of strategic acquisitions to continue to expand our core equipment rental business, as exhibited by our acquisition of assets of 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 in note 19 to the consolidated financial statements, which is expected to close in the first quarter of 2025.
We have a Customer Care Center ("CCC") in Charlotte, North Carolina that handles all telephone calls to our customer service telephone line, 1-800-UR-RENTS.
Additionally, fleet sharing allows us to be more disciplined with our capital spend. • Customer Care Center . We have a Customer Care Center (“CCC”) in Charlotte, North Carolina that handles all telephone calls to our customer service telephone line, 1-800-UR-RENTS.
We offer for rent approximately 4,800 classes of rental equipment on an hourly, daily, weekly or monthly basis. The types of equipment that we offer include general construction and industrial equipment; aerial work platforms; trench safety equipment; power and HVAC equipment; fluid solutions equipment; mobile storage equipment and modular office space; and general tools and light equipment.
The types of equipment that we offer include general construction and industrial equipment; aerial work platforms; trench safety equipment; power and HVAC equipment; fluid solutions equipment; mobile storage equipment and modular office space; surface protection mats; and general tools and light equipment. Sales of Rental Equipment .
Each branch within a region can access equipment located elsewhere in the region. This fleet sharing increases equipment utilization because equipment that is idle at one branch can be marketed and rented through other branches. Additionally, fleet sharing allows us to be more disciplined with our capital spend. • Customer Care Center .
We benefit from the following operating efficiencies: • Equipment Sharing Among Branches . Each branch within a region can access equipment located elsewhere in the region. This fleet sharing increases equipment utilization because equipment that is idle at one branch can be marketed and rented through other branches.
We believe our ability to serve such customers should allow us to improve our performance and enhance our market leadership position. 5 Table of Contents We manage our rental fleet, which is the largest and most comprehensive in the industry, utilizing a life-cycle approach that focuses on satisfying customer demand and optimizing utilization levels.
We manage our rental fleet, which is the largest and most comprehensive in the industry, utilizing a life-cycle approach that focuses on satisfying customer demand and optimizing utilization levels.
The North American equipment rental industry is highly fragmented and competitive. As the largest equipment rental company in the industry, we estimate that we have an approximate 15 percent market share in North America based on 2023 total equipment rental industry revenues as measured by the ARA.
As the largest equipment rental company in the industry, we estimate that we have an approximate 15 percent market share, which includes the standalone, pre-acquisition revenue of Yak, in North America based on 2024 total equipment rental industry revenues (excluding party and event rentals) as measured by the ARA.
Our results placed us in the top 10 percent of the Peakon Benchmark for Commercial and Professional Services Companies for the Engagement and Health & Wellbeing categories and in the top 25 percent of the Diversity & Inclusion category; there is no benchmark reference for our Safety category.
Our employee Net Promoter Score places us in the top five percent of the Peakon Benchmark for Commercial and Professional Services Companies for the Engagement category, in the top 10 percent for the Health & Wellbeing category and in the top 25 percent for the Belonging category.
Competitive Advantages We believe that we benefit from the following competitive advantages: Large and Diverse Rental Fleet . Our large and diverse fleet allows us to serve large customers that require substantial quantities and/or wide varieties of equipment.
Our large and diverse fleet allows us to serve large customers that require substantial quantities and/or wide varieties of equipment. We believe our ability to serve such customers should allow us to improve our performance and enhance our market leadership position.
We also sell used equipment through our website, which includes an online database of used equipment available for sale. Sales of New Equipment . We sell equipment such as aerial lifts, reach forklifts, telehandlers, compressors and generators from many leading equipment manufacturers. The type of new equipment that we sell varies by location. Contractor Supplies Sales .
We sell equipment such as aerial lifts, reach forklifts, telehandlers, compressors and generators from many leading equipment manufacturers. The type of new equipment that we sell varies by location. Contractor Supplies Sales . We sell a variety of contractor supplies including construction consumables, tools, small equipment and safety supplies. Service and Other Revenues .
Estimated market share is calculated by dividing our total 2023 North American rental revenue by ARA’s forecasted 2023 industry revenue.
Estimated market share is calculated by dividing our total 2024 North American rental revenue, including the standalone, pre-acquisition revenue of Yak, by ARA’s forecasted 2024 industry revenue (excluding party and event rentals).
Based on industry estimates from the ARA, 2023 North American equipment rental industry revenue grew an estimated 12 percent year-over-year. In 2023, our full year rental revenue increased by 19.3 percent year-over-year, which included the impact of the Ahern Rentals acquisition that was completed in December 2022 and is discussed in note 4 to the consolidated financial statements.
In 2024, our full year rental revenue increased by 8.0 percent year-over-year, which included the impact of the Yak acquisition that was completed in March 2024 and is discussed in note 4 to the consolidated financial statements.
In 2022, we switched survey administration to Peakon (a Workday company). Our 2023 employee experience survey showed strong results with average responses ranging from 8.4 to 9.2 out of 10 in each of our four survey categories: Engagement (8.5), Diversity & Inclusion (8.6), Health & Wellbeing (8.4) and Safety Commitment (9.2).
Our 2024 employee experience survey showed strong results with average responses ranging from 8.3 to 9.1 out of 10 in each of our four survey categories: Engagement (8.4), Belonging (8.3), Health & Wellbeing (8.4) and Safety Commitment (9.1). Our 2024 results were consistent with our strong 2023 results, with scores in all four categories flat or within 0.1 year-over-year.
For example, voluntary employee turnover, which represents voluntary terminations during the year divided by average headcount during the year, was 12.4 percent, 13.1 percent and 13.5 percent for 2023, 2022 and 2021, respectively. We also conduct an annual employee experience survey, which provides valuable information on drivers of engagement and areas where we can improve.
For example, voluntary employee turnover, which represents voluntary terminations during the year divided by average headcount during the year, was 11.9 percent, 12.4 percent and 13.1 percent for 2024, 2023 and 2022, respectively.
As the largest equipment rental company in the world, we have strong brand recognition, which helps us attract new customers and build customer loyalty. 6 Table of Contents Geographic and Customer Diversity .
As the largest equipment rental company in the world, we have strong brand recognition, which helps us attract new customers and build customer loyalty. Geographic and Customer Diversity . We primarily operate in the United States and Canada, and have a smaller presence in Europe, Australia and New Zealand, and our global branch network includes 1,686 rental locations.
As a result of this change, relative to our prior disclosures, our market share as of December 31, 2022 decreased and the size of the 2022 growth in North American equipment rental industry revenue increased. Human Capital The Company’s key human capital management objectives are to attract, retain and develop talent to deliver on the Company’s strategy.
Estimated North American market share as of December 31, 2024 includes the standalone, pre-acquisition revenue of Yak. Human Capital The Company’s key human capital management objectives are to attract, retain and develop talent to deliver on the Company’s strategy.
Our estimated North American market share of approximately 15 percent as of December 31, 2023 did not change materially from our market share as of December 31, 2022, which included the pre-acquisition revenue of Ahern Rentals as the acquisition was completed in 2022.
Our estimated North American market share of approximately 15 percent as of December 31, 2024, which includes the standalone, pre-acquisition revenue of Yak, did not change materially from our market share as of December 31, 2023. Competitive Advantages We believe that we benefit from the following competitive advantages: Large and Diverse Rental Fleet .
The Ahern Rentals acquisition is discussed further in note 4 to the consolidated financial statements. (5) As discussed below (see "Industry Overview and Economic Outlook"), North American equipment rental industry revenue is based on industry estimates from the American Rental Association ("ARA"). As discussed above, we completed the acquisition of Ahern Rentals in December 2022.
(6) As discussed below (see “Industry Overview and Economic Outlook”), North American market share and equipment rental industry revenue are based on industry estimates (excluding party and event rentals) from the American Rental Association (“ARA”). As discussed above, in March 2024, we completed the acquisition of Yak.
The program includes a biometric screening at work or off-site, a health assessment, a paid day off to be used for a wellness exam or day of service, tobacco cessation support, and participation incentives. Additionally, employees and family members can participate in virtual health challenges to encourage daily activity.
The program also includes (i) a paid day off to be used for a wellness exam or day of service, which was used by 91 percent of eligible employees in 2024, (ii) tobacco cessation support and (iii) participation incentives.
To that end, the Company has made the fair inclusion of veterans a priority, through its veterans ERG and external partnerships. • Compensation programs and employee benefits: Our compensation and benefits programs provide a package designed to attract, retain and motivate employees.
As part of its inclusion efforts, the Company is committed to supporting its military veterans and has made the fair inclusion of veterans a priority, through its veterans ERG and external partnerships.
(4) We completed the acquisition of Ahern Rentals, Inc. ("Ahern Rentals") in December 2022. The pro forma information includes the standalone, pre-acquisition results of Ahern Rentals. The pro forma components are not reflected above for 2022 versus 2021 because of the December 2022 acquisition date (Ahern Rentals did not materially impact the comparison of 2022 and 2021 equipment rentals).
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.
Beginning in 2021 and continuing through 2023, we have experienced broad-based strength of demand across our end-markets. See "Industry Overview and Economic Outlook" below for further discussion of our end-markets. (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.
Mix includes the impact of changes in customer, fleet, geographic and segment mix. (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, Inc. (“Ahern Rentals”) in December 2022.
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Mix includes the impact of changes in customer, fleet, geographic and segment mix. The positive fleet productivity for 2022 reflected strong demand across our end-markets. The novel coronavirus (“COVID-19”), which resulted in rental volume declines in response to shelter-in-place orders and other market restrictions, had the most pronounced on our business in 2020.
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(5) As discussed in note 4 to the consolidated financial statements, in March 2024, we completed the acquisition of Yak Access, LLC, Yak Mat, LLC and New South Access & Environmental Solutions, LLC (collectively, “Yak”), which was a leading provider of surface protection mats. Prior to the Yak acquisition, we did not rent material amounts of such equipment.
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Estimated North American market share as of December 31, 2022 includes the standalone, pre-acquisition revenue of Ahern Rentals. Subsequent to our prior disclosure of 2022 industry information, the ARA increased its estimate of the size of the North American equipment rental industry.
Added
Through the program, eligible employees can reduce medical plan costs if they complete a health assessment and participate in a biometric screening at work or off-site, and, in 2024, 56 percent of eligible employees did so.
Removed
Approximately 63 percent of eligible employees participated in the program in 2023. • Workplace inclusivity and diversity: We believe that an inclusive and diverse team is key to the success of our culture, and we view diversity holistically through a framework that recognizes the importance of diversity in enabling our commercial strategy and continued business success.
Added
Additionally, employees and family members can participate in virtual health challenges to encourage daily activity. • Compensation programs and employee benefits: Our compensation and benefits programs provide a package designed to attract, retain and motivate employees.
Removed
Our commitment to diversity, equity and inclusion (“DEI”) is demonstrated through many efforts including employee-led employee resource groups (“ERGs”); aspirational company-wide DEI goals; and inclusive volunteering opportunities. Our seven ERGs aim to represent and support the diverse communities that make up our workforce by facilitating: networking and connecting with peers; education and awareness efforts; and leadership and skill development.
Added
We also conduct an annual employee experience survey, with Peakon (a Workday company) serving as administrator, which provides information on drivers of engagement and areas where we can improve.
Removed
The Company has 3 Table of Contents disclosed an aspirational goal to increase the percentage of racially or gender diverse employees in sales and management roles, reflecting our commitment to increase diverse representation in our talent pipeline.
Added
There is no external benchmark reference for our Safety Commitment category. • Employee inclusion and engagement: Our commitment to inclusion is demonstrated through many efforts such as employee-led employee resource groups (“ERGs”).
Removed
There has been positive progress in this aspirational goal, as reflected in an over five percentage point increase in diverse employees in sales and management roles from 29.5 percent in 2020 to 34.7 percent in 2023.
Added
Our many ERGs are open to all employees and aim to foster a diverse and inclusive workplace by facilitating: networking and connecting with peers; education and awareness efforts; and professional development.
Removed
As part of its diversity efforts, the Company is committed to supporting our military veterans and believes that diversity in experience is an asset to the business.
Added
Based on industry estimates (excluding party and event rentals) from the ARA, 2024 North American equipment rental industry revenue grew an estimated 8 percent year-over-year.
Removed
Our 2023 results were consistent with our strong 2022 results, with scores in three categories flat year-over-year and our Diversity & Inclusion score decreasing slightly from 8.7 to 8.6.
Added
We offer a fleet of rental equipment with total OEC of $21.4 billion for rent on an hourly, daily, weekly or monthly basis.
Removed
The impact of the Ahern Rentals acquisition on our equipment rentals revenue is primarily reflected in the year-over-year increase in average OEC of 21.9 percent for the year ended December 31, 2023.
Added
We utilize many channels to sell used equipment: through our national and export sales forces, which can access many resale markets across our network; at auction; through brokers; and directly to manufacturers. We also sell used equipment through our website, which includes an online database of used equipment available for sale. Sales of New Equipment .
Removed
On a pro forma basis including the pre-acquisition results of Ahern Rentals, year-over-year, equipment rentals revenue increased 11.3 percent, primarily reflecting an increase in average OEC of 10.4 percent.
Added
Competition We primarily operate in the United States and Canada, and have a smaller presence in Europe, Australia and New Zealand. The North American equipment rental industry is highly fragmented and competitive. As discussed in note 4 to the consolidated financial statements, in March 2024, we completed the acquisition of Yak.
Removed
We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand, and our global branch network includes 1,584 rental locations. See Item 2—Properties for further geographical detail on our branch network.
Removed
Our customers can also use our UR Control ® application to actively manage their rental process and access real-time reports on their business activity with us. Total Control ® .
Removed
For a discussion of the risks associated with potential supply chain disruptions, see Item 1A- Risk Factors (“Operational Risks- Disruptions in our supply chain could result in adverse effects on our results of operations and financial performance "). Competition We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

81 edited+33 added−17 removed103 unchanged
Biggest changeUnder the program, we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $1.25 billion, excluding fees, commissions and other ancillary expenses. We have completed $1.0 billion of repurchases under the program as of December 31, 2023, and expect to complete the program in the first quarter of 2024.
Biggest changeShare repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves. In January 2024, our Board of Directors authorized a share repurchase program, under which we are authorized to repurchase shares of common stock for an aggregate purchase price not to exceed $1.5 billion, excluding fees, commissions and other ancillary expenses.
These include (i) the need to convert currencies, which could result in a gain or loss depending on fluctuations in exchange rates and (ii) the need to comply with foreign laws and regulations, as well as U.S. laws and regulations, applicable to our operations in foreign jurisdictions.
These include the need to (i) convert currencies, which could result in a gain or loss depending on fluctuations in exchange rates and (ii) comply with foreign laws and regulations, as well as U.S. laws and regulations, applicable to our operations in foreign jurisdictions.
However, such insurance may not fully cover these claims for a number of reasons, including: • our insurance policies, reflecting a program structure that we believe reflects market conditions for companies of our size, are often subject to significant deductibles or self-insured retentions; • our director and officer liability insurance policy has no deductible for individual non-indemnifiable loss, but is subject to a deductible for company reimbursement coverage; • we do not currently maintain Company-wide stand-alone first party coverage for environmental liability (other than legally required and third party site pollution coverage), since we believe the cost for such coverage is high relative to the benefit it provides; and • certain types of claims, such as claims for punitive damages or for damages arising from intentional misconduct, which are often alleged in third party lawsuits, might not be covered by our insurance.
However, such insurance and self-insurance may not fully cover these claims for a number of reasons, including: • our insurance policies, reflecting a program structure that we believe reflects market conditions for companies of our size, are often subject to significant deductibles or self-insured retentions; • our director and officer liability insurance policy has no deductible for individual non-indemnifiable loss, but is subject to a deductible for company reimbursement coverage; • we do not currently maintain Company-wide stand-alone first party coverage for environmental liability (other than legally required and third-party site pollution coverage), since we believe the cost for such coverage is high relative to the benefit it provides; and • certain types of claims, such as claims for punitive damages or for damages arising from intentional misconduct, which are often alleged in third-party lawsuits, might not be covered by our insurance.
Acquisitions entail certain risks, including: • unrecorded liabilities of acquired companies and unidentified issues with acquired companies or acquired assets that we fail to discover during our due diligence investigations or that are not subject to indemnification or reimbursement by the seller; • greater than expected expenses, such as the need to obtain additional debt or equity financing for any transaction; • unfavorable accounting treatment and unexpected increases in taxes; • adverse effects on our ability to maintain relationships with customers, employees and suppliers; • inherent risk associated with entering a geographic area or line of business in which we have no or limited experience; • difficulty in assimilating the operations and personnel of an acquired company, or acquired assets, within our existing operations, including the consolidation of corporate and administrative functions; • difficulty in integrating marketing, information technology and other systems; • difficulty in conforming standards, controls, procedures and policies, business cultures and compensation structures; • difficulty in identifying and eliminating redundant and underperforming operations and assets; • loss of key employees of the acquired company; • operating inefficiencies that have a negative impact on profitability; • impairment of goodwill or other acquisition-related intangible assets; • failure to achieve anticipated synergies or receiving an inadequate return of capital; and • strains on management and other personnel time and resources to evaluate, negotiate and integrate acquisitions.
Acquisitions, including the pending acquisition of H&E, entail certain risks, including: • unrecorded liabilities of acquired companies and unidentified issues with acquired companies or acquired assets that we fail to discover during our due diligence investigations or that are not subject to indemnification or reimbursement by the seller; • greater than expected expenses, such as the need to obtain additional debt or equity financing for any transaction; • unfavorable accounting treatment and unexpected increases in taxes; • adverse effects on our ability to maintain relationships with customers, employees and suppliers; • inherent risk associated with entering a geographic area or line of business in which we have no or limited experience; • difficulty in assimilating the operations and personnel of an acquired company, or acquired assets, within our existing operations, including the consolidation of corporate and administrative functions; • difficulty in integrating marketing, information technology and other systems; • difficulty in conforming standards, controls, procedures and policies, business cultures and compensation structures; • difficulty in identifying and eliminating redundant and underperforming operations and assets; • loss of key employees of the acquired company; • operating inefficiencies that have a negative impact on profitability; • impairment of goodwill or other acquisition-related intangible assets; • failure to achieve anticipated synergies or receiving an inadequate return of capital; and • strains on management and other personnel time and resources to evaluate, negotiate and integrate acquisitions.
In addition, the following factors, among others, could adversely impact us, our customers or our suppliers and in turn adversely affect our revenues and operating results: • a decrease in expected levels of infrastructure spending; • a lack of availability of credit; • excess fleet in the equipment rental industry; • a decrease in the level of exploration, development, production activity and capital spending by oil and natural gas companies; • an increase in costs, including the cost of construction materials, as a result of inflation or other factors; • an increase in interest rates; • instability in macroeconomic conditions; • adverse weather conditions, which may temporarily affect a particular region; • a prolonged shutdown of the U.S. government; • public health crises and epidemics (or concerns over the possibility of such a health crisis or epidemic), such as COVID-19; • supply chain disruptions; • terrorism or hostilities involving the United States, Canada, Europe, Australia or New Zealand; • geopolitical conflicts, such as Russia’s invasion of Ukraine and the conflict in the Middle East, and the resultant sanctions and other measures imposed in response; or • other unforeseen or catastrophic events.
In addition, the following factors, among others, could adversely impact us, our customers or our suppliers and in turn adversely affect our revenues and operating results: • a decrease in expected levels of infrastructure spending; • a lack of availability of credit; 9 Table of Contents • excess fleet in the equipment rental industry; • a decrease in the level of exploration, development, production activity and capital spending by oil and natural gas companies; • an increase in costs, including the cost of construction materials, as a result of inflation, tariffs or other factors; • an increase in interest rates; • instability in macroeconomic conditions; • adverse weather conditions, which may temporarily affect a particular region; • a prolonged shutdown of the U.S. government; • public health crises and epidemics (or concerns over the possibility of such a health crisis or epidemic), such as COVID-19; • supply chain disruptions; • terrorism or hostilities involving the United States, Canada, Europe, Australia or New Zealand; • geopolitical conflicts, such as Russia’s invasion of Ukraine and the conflict in the Middle East, and the resultant sanctions and other measures imposed in response; or • other unforeseen or catastrophic events.
These laws and regulations are broad in scope and subject to evolving interpretations and increasing enforcement, and we have incurred costs to monitor compliance and have altered our practices, and may have to do so again in the future.
These laws and regulations are broad in scope, complex, and subject to evolving interpretations and increasing enforcement, and we have incurred costs to monitor compliance and have altered our practices, and may have to do so again in the future.
These factors, in addition to general economic conditions and the factors discussed above under “Cautionary Statement Regarding Forward-Looking Statements”, include, but are not limited to: • the seasonal rental patterns of our customers, with rental activity tending to be lower in the winter; • changes in the size of our rental fleet and/or in the rate at which we sell our used equipment; • excess fleet in the equipment rental industry; • changes in private non-residential construction spending or government funding for infrastructure and other construction projects; • changes in demand for, or utilization of, our equipment or in the prices we charge due to changes in economic conditions, including rising inflation, competition or other factors; • changes in customer, fleet, geographic and segment mix; • commodity price pressures and the resultant increase in the cost of fuel and steel to our equipment suppliers, which can result in increased equipment costs for us; • cost increases as a result of inflation; • other cost fluctuations, such as costs for employee-related compensation and healthcare benefits; • labor shortages and/or disputes, work stoppages or other labor difficulties; • potential enactment of new legislation affecting our operations or labor relations; • supply chain or other disruptions that impact our ability to obtain equipment and other supplies for our business from our key suppliers on acceptable terms or at all; • completion of acquisitions, divestitures or recapitalizations; • increases in interest rates and related increases in our interest expense and our debt service obligations; • the possible need, from time to time, to record goodwill impairment charges or other write-offs or charges due to a variety of occurrences, such as the adoption of new accounting standards, the impairment of assets, rental location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurings, the refinancing of existing indebtedness or the buy-out of equipment leases; and • currency risks and other risks associated with international operations.
These factors, in addition to general economic conditions and the factors discussed above under “Cautionary Statement Regarding Forward-Looking Statements”, include, but are not limited to: 14 Table of Contents • the seasonal rental patterns of our customers, with rental activity tending to be lower in the winter; • changes in the size of our rental fleet and/or in the rate at which we sell our used equipment; • excess fleet in the equipment rental industry; • changes in private non-residential construction spending or government funding for infrastructure and other construction projects; • changes in demand for, or utilization of, our equipment or in the prices we charge due to changes in economic conditions, including rising inflation, competition or other factors; • changes in customer, fleet, geographic and segment mix; • commodity price pressures and the resultant increase in the cost of fuel and steel to our equipment suppliers, which can result in increased equipment costs for us; • cost increases as a result of inflation; • other cost fluctuations, such as costs for employee-related compensation and healthcare benefits; • labor shortages and/or disputes, work stoppages or other labor difficulties; • potential enactment of new legislation affecting our operations or labor relations; • supply chain or other disruptions that impact our ability to obtain equipment and other supplies for our business from our key suppliers on acceptable terms or at all; • completion of acquisitions, divestitures or recapitalizations; • increases in interest rates or the aggregate principal amount of our outstanding indebtedness, and related increases in our interest expense and our debt service obligations; • the possible need, from time to time, to record goodwill impairment charges or other write-offs or charges due to a variety of occurrences, such as the adoption of new accounting standards, the impairment of assets, rental location divestitures, dislocation in the equity and/or credit markets, consolidations or closings, restructurings, the refinancing of existing indebtedness or the buy-out of equipment leases; and • currency risks and other risks associated with international operations.
We establish and evaluate our loss reserves on a semi-annual basis to address casualty claims, or portions thereof, not covered by our insurance policies.
We establish and evaluate our loss reserves on a semi-annual basis to address casualty claims, or portions thereof, not covered by our insurance policies or self-insurance.
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, 2023, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable.
When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of December 31, 2024, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable.
In connection with the expansion of the specialty segment, we have expanded the scope of services we provide to clients; for example, we advise clients on the compatibility of our equipment with various applications, collaborate and consult with clients on certain aspects of civil construction projects, design and erect scaffolding, and design electrical pump systems.
In connection with the expansion of the specialty segment, we have expanded the scope of services we provide to customers; for example, we advise customers on the compatibility of our equipment with various applications, collaborate and consult with customers on certain aspects of civil construction projects, design and erect scaffolding, and design electrical pump systems.
Insolvency, financial difficulties or other factors may result in our suppliers not being able to fulfill the terms of their agreements with us. Further, such factors may render suppliers unwilling to extend contracts that provide favorable terms to us, or may force them to seek to renegotiate existing contracts with us.
Insolvency, financial difficulties, consolidation among our suppliers, or other factors may result in our suppliers not being able to fulfill the terms of their agreements with us. Further, such factors may render suppliers unwilling to extend contracts that provide favorable terms to us, or may force them to seek to renegotiate existing contracts with us.
Our 1,357 branch locations in the United States are located in 49 states, and Puerto Rico, which exposes us to a host of different state and local regulations, in addition to federal law and regulatory and contractual requirements we face as a government contractor.
Our 1,433 branch locations in the United States are located in 49 states, and Puerto Rico, which exposes us to a host of different state and local regulations, in addition to federal law and regulatory and contractual requirements we face as a government contractor.
Such covenants include, among other things, limitations on: (i) liens; (ii) indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) dividends, other payments and other matters affecting subsidiaries; (viii) transactions with affiliates; and (ix) issuances of preferred stock of certain subsidiaries.
Such covenants include, among other things, limitations on: (i) liens; (ii) indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted 12 Table of Contents payments; (vii) dividends, other payments and other matters affecting subsidiaries; (viii) transactions with affiliates; and (ix) issuances of preferred stock of certain subsidiaries.
The extent to which these efforts and strategies will achieve our desired efficiencies and goals in 2024 and beyond is uncertain, as their success depends on a number of factors, some of which are beyond our control.
The extent to which these efforts and strategies will achieve our desired efficiencies and goals in 2025 and beyond is uncertain, as their success depends on a number of factors, some of which are beyond our control.
Under these laws, we may be liable for, among other things: (i) the costs of investigating and remediating any contamination at our sites as well as sites to which we send hazardous waste for disposal or treatment, regardless of fault; and (ii) fines and penalties for non-compliance.
Under these laws, we may be liable for, among other things: (i) the costs of investigating and 21 Table of Contents remediating any contamination at our sites as well as sites to which we send hazardous waste for disposal or treatment, regardless of fault; and (ii) fines and penalties for non-compliance.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies-Evaluation of Goodwill Impairment” in Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations. Risks Related to our Securities 14 Table of Contents Our operating results may fluctuate, which could affect the trading value of our securities.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies-Evaluation of Goodwill Impairment” in Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations. Risks Related to our Securities Our operating results may fluctuate, which could affect the trading value of our securities.
Additionally, our share repurchase programs could diminish our cash reserves, which may impact our ability to finance future growth, to continue to pay a dividend and to pursue possible future strategic opportunities and acquisitions.
Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth, to continue to pay a dividend and to pursue possible future strategic opportunities and acquisitions.
The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, the trading price of the Company’s common stock and the nature of other investment opportunities.
The timing and amount of repurchases, if any, will depend upon several factors, including market and legislative conditions, the trading price of the Company’s common stock and the nature of other investment opportunities.
If we are unable to manage credit risk issues adequately, or if a large number of customers have financial difficulties at the same time, our credit losses could increase above historical levels and our operating results would be adversely affected.
If we are unable to manage credit risk issues adequately, or if a large number of customers have financial difficulties at the same time, our credit losses could increase above historical levels and our 16 Table of Contents operating results would be adversely affected.
Provisions of law, such as those 20 Table of Contents requiring that dividends be paid only from surplus, could limit the ability of our subsidiaries to make payments or other distributions to us. Furthermore, these subsidiaries could in certain circumstances agree to contractual restrictions on their ability to make distributions.
Provisions of law, such as those requiring that dividends be paid only from surplus, could limit the ability of our subsidiaries to make payments or other distributions to us. Furthermore, these subsidiaries could in certain circumstances agree to contractual restrictions on their ability to make distributions.
Industry and Economic Risks 9 Table of Contents Challenging economic conditions and the occurrence of unforeseen or catastrophic events, including public health crises and epidemics, have in the past adversely impacted, and may in the future adversely impact, us, our customers or our suppliers and in turn adversely affect our business, revenues and operating results.
Industry and Economic Risks Challenging economic conditions and the occurrence of unforeseen or catastrophic events, including public health crises and epidemics, have in the past adversely impacted, and may in the future adversely impact, us, our customers or our suppliers and in turn adversely affect our business, revenues and operating results.
We include in income from operations the difference between the sales price and the depreciated value of an item of equipment sold. Changes in our assumptions regarding depreciation could change our depreciation expense, as well as the gain or loss realized upon disposal of equipment.
We include in income from operations the difference between the sales price and the depreciated value of an item of equipment sold. Changes in our assumptions regarding depreciation could change our depreciation expense, as well as the gain 20 Table of Contents or loss realized upon disposal of equipment.
The amount of borrowings permitted under our ABL facility may fluctuate significantly, which may adversely affect our liquidity, results of operations and financial position. The amount of borrowings permitted at any time under our ABL facility is limited to a periodic borrowing base valuation of the collateral thereunder.
The amount of borrowings permitted under our ABL facility and the accounts receivable securitization facility may fluctuate significantly, which may adversely affect our liquidity, results of operations and financial position. The amount of borrowings permitted at any time under our ABL facility and the accounts receivable securitization facility is limited to a periodic borrowing base valuation of the collateral thereunder.
Moreover, in the past, we have experienced volatility in our stock price, and we may experience such volatility again in the future, which may make it more difficult and expensive to recruit and retain employees, particularly senior management, through grants of stock or stock options.
Moreover, in the past, we have experienced volatility in our stock price, and we may experience such volatility again in the future, which may make it more difficult and expensive to recruit and retain employees, particularly senior management, through grants of stock or restricted stock units.
While we have invested in the administration of programs and physical loss prevention improvements to mitigate the risk of natural disasters causing disruption to our ability to serve our customers and communities in times of need, extended periods of disruptions could have an adverse effect on our results of operations. We anticipate that climate change-related risks will increase over time.
While we have invested in the administration of programs and physical loss prevention improvements to mitigate the risk of natural disasters causing disruption to our ability to serve our customers and communities in times of need, extended periods of disruptions could have an adverse effect on our results of operations. We anticipate that these risks will increase over time.
Although we have announced environmental and social goals, including our greenhouse gas intensity reduction goal, our efforts to provide more low- and zero-emissions equipment to our customers and our efforts to provide customers with tools to monitor and manage their environmental impacts, there can be no assurance that our shareholders and other stakeholders will agree with our goals and strategies or be satisfied with our efforts to attain such goals.
Although we have announced aspirational sustainability and safety goals, including our greenhouse gas intensity reduction goal, our efforts to provide more low- and zero-emissions equipment to our customers and our efforts to provide customers with tools to monitor and manage their environmental impacts, there can be no assurance that our shareholders and other stakeholders will agree with our goals and strategies or be satisfied with our efforts to attain such goals.
It is also possible that some or all of the insurance that is currently available to us will not be available in the future on economically reasonable terms or at all. We are subject to numerous environmental and safety regulations.
It is also possible that some or all of the insurance that is currently available to us from third parties will not be available in the future on economically reasonable terms or at all. We are subject to numerous environmental and safety regulations.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. At December 31, 2023, we had $5.9 billion of goodwill on our consolidated balance sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. At December 31, 2024, we had $6.9 billion of goodwill on our consolidated balance sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
Our failure to address these risks or other problems encountered in connection with any past or future acquisition could cause us to fail to realize the anticipated benefits of the acquisitions over the timeframe we expect, or at all, cause us to incur unanticipated liabilities or harm our existing operations or our business generally.
Our failure to address these risks or other problems encountered in connection with any past or future acquisitions, including the pending acquisition of H&E, could cause us to fail to realize the anticipated benefits of the acquisitions over the timeframe we expect, or at all, cause us to incur unanticipated liabilities or harm our existing operations or our business generally.
Execution of our environmental and social goals is subject to numerous risks and uncertainties, many of which are outside of our control, including, but not limited to, our ability to achieve our goals within the expected timeframes and the currently projected cost ranges; the availability and cost of renewable energy; the availability and cost of low- and zero-emissions equipment and vehicles for our rental fleet; the availability and cost of low- and zero-emissions vehicles for our sales, service and delivery non-rental fleet; compliance with global and regional regulations, taxes, charges, mandates or requirements relating to greenhouse gas emissions, carbon costs or climate-related goals; adapting products to customer preferences and customer acceptance of low- and zero-emissions equipment; the accuracy of the assumptions used to estimate customers’ emissions in our emissions tracking tool in Total Control®; and the actions of competitors and competitive pressures.
Our ability to execute on our aspirational sustainability and safety goals is subject to numerous risks and uncertainties, many of which are outside of our control, including, but not limited to, our ability to achieve our goals within the expected timeframes and the currently projected cost ranges; the availability and cost of renewable energy; the availability and cost of low- and zero-emissions equipment and vehicles for our rental fleet; the availability and cost of low- and zero-emissions vehicles for our sales, service and delivery non-rental fleet; compliance with global and regional regulations, taxes, charges, mandates or requirements relating to greenhouse gas emissions, carbon costs or climate-related goals; adapting products to customer preferences and customer acceptance of low- and zero-emissions equipment; the accuracy of the assumptions used to estimate customers’ emissions in our emissions tracking tool in Total Control®; and the actions of competitors and competitive pressures.
Our collective bargaining agreements and our relationship with our union-represented employees could disrupt our ability to serve our customers, lead to higher labor costs or the payment of withdrawal liability. We currently have approximately 1,800 employees who are represented by unions and covered by collective bargaining agreements and approximately 24,500 employees who are not represented by unions.
Our collective bargaining agreements and our relationship with our union-represented employees could disrupt our ability to serve our customers, lead to higher labor costs or the payment of withdrawal liability. We currently have approximately 1,800 employees who are represented by unions and covered by collective bargaining agreements and approximately 26,100 employees who are not represented by unions.
In such event, unless we are able to refinance the indebtedness coming due and replace the ABL facility and/or the accounts receivable securitization facility, we would likely not have sufficient liquidity for 12 Table of Contents our business needs and would be forced to adopt an alternative strategy.
In such event, unless we are able to refinance the indebtedness coming due and replace the ABL facility and/or the accounts receivable securitization facility, we would likely not have sufficient liquidity for our business needs and would be forced to adopt an alternative strategy.
Accordingly, our business in the past has been, and in the future could be, adversely affected by limitations on fuel supplies or significant increases in fuel prices that result in higher costs to us for transporting equipment from one branch to another branch.
Accordingly, our business in the past has been, and in the future could be, adversely affected by limitations on fuel supplies or significant increases in fuel prices that 10 Table of Contents result in higher costs to us for transporting equipment from one branch to another branch.
Although our share repurchase programs are intended to enhance long-term stockholder value, there is no assurance that they will do so and short-term stock price fluctuations could reduce the program’s effectiveness. Our charter provisions, as well as other factors, may affect the likelihood of a takeover or change of control of the Company.
Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program’s effectiveness. Our charter provisions, as well as other factors, may affect the likelihood of a takeover or change of control of the Company.
A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, increases in market interest rates increase our interest expense and our debt service obligations. At December 31, 2023, we had $3.6 billion of indebtedness that bore interest at variable rates.
A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, increases in market interest rates increase our interest expense and our debt service obligations. At December 31, 2024, we had $4.3 billion of indebtedness that bore interest at variable rates.
If we are unable to service our indebtedness and fund our operations, we will have to adopt an alternative strategy that may include: • reducing or delaying capital expenditures; • limiting our growth; • seeking additional capital; • selling assets; or • restructuring or refinancing our indebtedness.
If we are unable to service our indebtedness and fund our operations, we will have to adopt an alternative strategy that may include: • reducing or delaying capital expenditures; • limiting our growth; • seeking additional capital; 11 Table of Contents • selling assets; or • restructuring or refinancing our indebtedness.
The inability to borrow under our ABL facility, or limitations on the amounts we can borrow under our ABL facility, may adversely affect our liquidity, results of operations and financial position.
The inability to borrow under our ABL facility and/or the accounts receivable securitization facility, or limitations on the amounts we can borrow under our ABL facility and/or the accounts receivable securitization facility, may adversely affect our liquidity, results of operations and financial position.
Changes in these requirements, or any material failure by our branches to comply with 21 Table of Contents them, can increase our costs, affect our reputation, limit our business, drain management time and attention and otherwise impact our operations in adverse ways.
Changes in these requirements, or any material failure by our branches to comply with them, can increase our costs, affect our reputation, limit our business, drain management time and attention and otherwise impact our operations in adverse ways.
There can be no assurance that we will be able to identify suitable acquisition opportunities in the future or that we will be able to consummate any such transactions on terms and conditions acceptable to us.
There can be no assurance that we will be able to identify suitable 13 Table of Contents acquisition opportunities in the future or that we will be able to consummate any such transactions on terms and conditions acceptable to us.
Our common stock price has fluctuated significantly and may continue to do so in the future for a number of reasons, including: • fluctuations in the results of our operations and general conditions in the economy, our market, and the markets served by our customers; • announcements of developments related to our business; • market perceptions of any proposed merger or acquisition and the likelihood of our involvement in other merger and acquisition activity; • variations in our revenues, gross margins, earnings or other financial results from investors’ expectations; • departure of key personnel; • purchases or sales of large blocks of our stock by institutional investors or transactions by insiders; • investor perceptions of the equipment rental industry in general and our Company in particular; • fluctuations in the prices of oil and natural gas; • expectations regarding our share repurchase programs; • changes in our dividend policy; and • the operating and stock performance of comparable companies or related industries. 15 Table of Contents In addition, prices in the stock market have been volatile over the past few years.
Our common stock price has fluctuated significantly and may continue to do so in the future for a number of reasons, including: • fluctuations in the results of our operations and general conditions in the economy, our market, and the markets served by our customers; • announcements of developments related to our business; • market perceptions of any proposed merger or acquisition and the likelihood of our involvement in other merger and acquisition activity; • variations in our revenues, gross margins, earnings or other financial results from investors’ expectations; • departure of key personnel; • purchases or sales of large blocks of our stock by institutional investors or transactions by insiders; • investor perceptions of the equipment rental industry in general and our Company in particular; • fluctuations in the prices of oil and natural gas; • expectations regarding our share repurchase program; • changes in our dividend policy; and • the operating and stock performance of comparable companies or related industries.
These factors have in the past, and could in the future, among other things, cause weakness in our end-markets and impact customer demand for equipment rentals, reduce the availability and productivity of our employees, increase our costs, result in delayed payments from our customers and uncollectible accounts, impact previously announced strategic plans or impact our ability to access funds from financial institutions and capital markets on terms favorable to us, or at all.
These factors have in the past resulted, and could in the future result, in, among other things, weakness in our end-markets, reduced customer demand for equipment rentals, reduced availability and productivity of our employees, increased costs, delayed payments from our customers and uncollectible accounts, impacts to previously announced strategic plans or impacts to our ability to access funds from financial institutions and capital markets on terms favorable to us, or at all.
As a result, our access to credit under our ABL facility is potentially subject to significant fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, as well as certain discretionary rights of the agent in respect of the calculation of such borrowing base value.
As a result, our access to credit under our ABL facility and the accounts receivable securitization facility is potentially subject to significant fluctuations depending on the value of the borrowing base of eligible assets as of any measurement date, and, in the case of the ABL facility, certain discretionary rights of the agent in respect of the calculation of such borrowing base value.
Additionally, potential climate change regulation, including a potential carbon tax, could adversely affect the level of exploration, development and production activity of certain of our customers and the demand for our services and products.
Additionally, potential climate change regulation could adversely affect the level of exploration, development and production activity of certain of our customers and the demand for our services and products.
The equipment rental industry is highly fragmented and competitive. Our competitors include small, independent businesses with one or two rental locations, regional competitors that operate in one or more states, national and global companies or divisions of national and global companies, and equipment vendors and dealers who both sell and rent equipment directly to customers.
Our competitors include small, independent businesses with one or two rental locations, regional competitors that operate in one or more states, national and global companies or divisions of national and global companies, and equipment vendors and dealers who both sell and rent equipment directly to customers.
Moreover, any perception, whether or not valid, that we have failed to act responsibly with respect to such matters, failed to achieve our goals or failed to effectively respond to new or additional legal or regulatory requirements regarding climate change, could adversely affect our business and reputation.
Moreover, any perception, whether or not valid, that we have failed to act responsibly with respect to such matters, failed (or may fail) to achieve our goals or to effectively respond to new or additional legal or regulatory requirements, could adversely affect our business, reputation and exposure to legal risks.
Trends in oil and natural gas prices could adversely affect the level of exploration, development and production activity of certain of our customers and the demand for our services and products.
Trends in oil and natural gas prices have in the past adversely affected, and could again in the future adversely affect, the level of exploration, development and production activity of certain of our customers and the demand for our services and products.
We have been pursuing a general strategy of optimizing our field operations in order to address potential labor shortages, improve servicing capabilities, improve sales force effectiveness, and focus our sales force’s efforts on increasing revenues from our national account and other large customers. We also continue to pursue strategies to improve productivity.
We have been pursuing a general strategy of optimizing our field operations in order to address potential labor shortages, improve servicing capabilities, improve sales force effectiveness, and focus our sales force’s efforts on increasing revenue per account. We also continue to pursue strategies to improve productivity.
Additionally, as severe weather events become increasingly common, our or our customers’ operations may be disrupted, which could result in increased operational costs or reduced demand for our products and services, and climate change may also reduce the availability or increase the cost of insurance for weather-related events.
As severe weather events and other natural occurrences become increasingly common, our or our customers’ operations may be disrupted, which could result in increased operational costs or reduced demand for our products and services, and the increased incidence of severe weather and other natural occurrences may also reduce the availability or increase the cost of insurance for such events.
Although the Board of Directors has authorized the share repurchase programs, the share repurchase programs do not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares.
Although the Board of Directors has authorized the share repurchase program, the share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.
We rely on our information technology systems to be able to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and support our online ordering system.
We rely on the continuous and uninterrupted performance of our and our third-party vendors’ information technology systems to be able to monitor and control our operations, adjust to changing market conditions, implement strategic initiatives and support our online ordering system.
Also, our ability to repurchase shares of stock may be limited by restrictive covenants in our debt agreements. The repurchase programs may be limited, suspended or discontinued at any time without prior notice. In addition, repurchases of our common stock pursuant to our share repurchase programs could affect our stock price and increase its volatility.
The repurchase program may be limited, suspended or discontinued at any time without prior notice. In addition, repurchases of our common stock pursuant to our share repurchase program could affect our stock price and increase its volatility.
These claims include those relating to personal injuries or property damage arising from: (i) the use and/or operation of our rented or sold equipment, (ii) motor vehicle accidents involving our vehicles and our employees and (iii) employment-related claims. Currently, we carry a broad range of insurance for the protection of our assets and operations.
These claims include those relating to personal injuries or property damage arising from: (i) the use and/or operation of our rented or sold equipment, (ii) motor vehicle accidents involving our vehicles and our employees, and (iii) employment-related claims.
See Item 7A—Quantitative and Qualitative Disclosures About Market Risk for additional information related to interest rate risk. 11 Table of Contents To service our indebtedness, we will require a significant amount of cash and our ability to generate cash depends on many factors beyond our control.
As of December 31, 2024, our variable rate indebtedness represented 32 percent of our total indebtedness. See Item 7A—Quantitative and Qualitative Disclosures about Market Risk for additional information related to interest rate risk. To service our indebtedness, we require a significant amount of cash and our ability to generate cash depends on many factors beyond our control.
However, we may not anticipate or combat all types of future attacks until after they have been launched. If any of these breaches of security occur or are anticipated in the future, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
If any of these breaches of security occur or are anticipated in the future, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
The costs of new equipment we use in our fleet have increased, and may continue to increase, requiring us to spend more for replacement equipment or preventing us from procuring equipment on a timely basis. If our rental equipment ages, the costs of maintaining such equipment, if not replaced within a certain period of time, will likely increase.
If our rental fleet ages, our operating costs may increase, we may be unable to pass along such costs, and our earnings may decrease. The costs of new equipment we use in our fleet have increased, and may continue to increase, requiring us to spend more for replacement equipment or preventing us from procuring equipment on a timely basis.
The U.S. federal government, certain U.S. states and certain other countries and regions have adopted or are considering legislation or regulation imposing overall caps or taxes on greenhouse gas emissions from certain sectors or facility categories.
The U.S. federal government, U.S. states and certain other countries and regions have adopted or are considering legislation, regulation or policies on these topics, including the imposition of caps or taxes on greenhouse gas emissions from certain sectors or facility categories, disclosure of corporate greenhouse gas emissions, and limitations on diversity, equity and inclusion programs.
In addition, climate change may impact the global economy, including as a result of disruptions to supply chains.
In addition, severe weather events and other natural occurrences may impact the global economy, including as a result of disruptions to supply chains.
Such new laws or regulations, or stricter enforcement of existing laws and regulations, could increase the costs of operating our businesses, reduce the demand for our products and services and impact the prices we charge our customers, any or all of which could adversely affect our results of operations.
Compliance with such laws, regulations or policies, including any that may be adopted in the future, could, among other things, increase the costs of operating our businesses, reduce the demand for our products and services and impact the prices we charge our customers, any or all of which could adversely affect our results of operations.
Increases in fuel costs or reduced supplies of fuel have in the past harmed, and could in the future again harm, our business. We believe that one of our competitive advantages is the mobility of our fleet.
See “Operational Risks– Severe weather events and other natural occurrences may materially adversely impact our operations and markets .” Increases in fuel costs or reduced supplies of fuel have in the past harmed, and could in the future again harm, our business. We believe that one of our competitive advantages is the mobility of our fleet.
Complying with new regulatory requirements has in the past required, and could in the future require, us to incur substantial expenses or require us to change our business practices, either of which could harm our business.
Moreover, certain new and existing data privacy laws and regulations diverge and conflict with each other in certain respects, which makes compliance increasingly difficult. Complying with new regulatory requirements has in the past required, and could in the future require, us to incur substantial expenses or require us to change our business practices, either of which could harm our business.
If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment, growth plans and refinancing existing indebtedness. 13 Table of Contents Risks Related to our Strategic Transactions and Investments Our growth strategies may be unsuccessful if we are unable to identify and complete future acquisitions and successfully integrate acquired businesses or assets.
If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment, growth plans and refinancing existing indebtedness.
We would expect to pay for any future acquisitions using cash, capital stock, net proceeds from the issuance of notes, borrowings under our credit facilities and/or assumption of indebtedness.
We would expect to pay for any future acquisitions using cash, capital stock, net proceeds from the issuance of notes, borrowings under our credit facilities and/or assumption of indebtedness. For example, financing for our pending acquisition of H&E may include the issuance of debt securities and/or term loan borrowings, in addition to borrowings under our existing ABL facility.
We have, from time to time, experienced threats to and breaches of our data and systems, including malware and computer virus attacks. We are continuously developing and enhancing our controls, processes and practices designed to protect our systems, computers, software, data and networks from attack, damage, or unauthorized access. This continued development and enhancement requires us to expend significant resources.
We continuously develop and enhance our controls, processes and practices to protect our systems, computers, software, data and networks from attack, damage, vulnerabilities or unauthorized access. This continued development and enhancement requires us to expend significant resources.
In August 2022, Congress passed the Inflation Reduction Act, which imposes a one percent tax on stock repurchases, subject to certain adjustments, after December 31, 2022 by publicly traded U.S. companies, including us, which may also impact our decision to engage in share repurchases.
For example, the Inflation Reduction Act imposes a one percent tax on stock repurchases, subject to certain adjustments, by publicly traded U.S. companies, including us, and may impact our decision to engage in share repurchases. Also, our ability to repurchase shares of stock may be limited by restrictive covenants in our debt agreements.
Such decreases have adversely affected our operating results by causing our revenues to decline and, because certain of our costs are fixed, our operating margins to be reduced.
In the past, weakness in our end-markets has led to a decrease in the demand for our equipment and in the rates we realized. Such decreases have adversely affected our operating results by causing our revenues to decline and, because certain of our costs are fixed, our operating margins to be reduced.
However, some of our customers may have liquidity issues and ultimately may not be able to fulfill the terms of their rental agreements with us.
One of the reasons some of our customers find it more attractive to rent equipment than own that equipment is the need to deploy their capital elsewhere. However, some of our customers may have liquidity issues and ultimately may not be able to fulfill the terms of their rental agreements with us.
As a result, there is no assurance that we will be able to successfully achieve our environmental and social goals, which could damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of operations and financial condition. 19 Table of Contents Our growing specialty reportable segment, as well as our tools and onsite services offerings, presents new and expanded risks, which may increase as we engage in new activities and provide new services.
As a result, there is no assurance that we will be able to successfully achieve our aspirational sustainability and safety goals, which could damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of operations and financial condition.
The costs of maintenance may materially increase in the future and could lead to material adverse effects on our results of operations.
If our rental equipment ages, the costs of maintaining such equipment, if not replaced within a certain period of time, will likely increase. The costs of maintenance may materially increase in the future and could lead to material adverse effects on our results of operations.
See “Operational Risks– Climate change, climate change regulations and greenhouse effects may materially adversely impact our operations and markets .” 10 Table of Contents Our industry is highly competitive, and competitive pressures have in the past led, and could lead again in the future, to a decrease in our market share or in the prices that we can charge.
Our industry is highly competitive, and competitive pressures have in the past led, and could lead again in the future, to a decrease in our market share or in the prices that we can charge. The equipment rental industry is highly fragmented and competitive.
No assurance can be given that cash dividends will continue to be declared and paid, and, if declared and paid, the amount of such dividends.
No assurance can be given that cash dividends will continue to be declared and paid, and, if declared and paid, the amount of such dividends. Operational Risks If we are unable to collect on contracts with customers, our operating results would be adversely affected.
Our specialty reportable segment has accounted for an increasing portion of our business and revenues in recent years. Specialty segment revenues constituted 25.4 percent of our revenues for the year ended December 31, 2023, as compared to 7.3 percent of our revenues for the year ended December 31, 2013.
Specialty segment revenues constituted 29.3 percent of our revenues for the year ended December 31, 2024, as compared to 7.3 percent of our revenues for the year ended December 31, 2013.
Disruptions in our information technology systems or a compromise of security with respect to our systems could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives or support our online ordering system.
Furthermore, changes in customer demand could cause certain of our existing equipment to become obsolete and require us to purchase new equipment at increased costs. 17 Table of Contents Disruptions in our or our third-party vendors’ information technology systems could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives or support our online ordering system.
Our business has been and may in the future be adversely affected by economic conditions in the United States and globally. A worsening of economic conditions, in particular with respect to North American construction and industrial activities, could cause weakness in our end-markets and adversely affect our revenues and operating results.
A worsening of economic conditions, in particular with respect to North American construction and industrial activities, could cause weakness in our end-markets and adversely affect our revenues and operating results, the effect of which could be exacerbated due to end-market concentration. Our general rental equipment and specialty equipment are used in connection with private non-residential construction and industrial activities.
We have historically achieved a significant portion of our growth through acquisitions and we will continue to consider potential acquisitions on a selective basis. From time to time we have also approached, or have been approached by, other public companies or large privately-held companies to explore consolidation opportunities.
From time to time we have also approached, or have been approached by, other public companies or large privately-held companies to explore consolidation opportunities.
We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase programs or that our share repurchase programs will enhance long-term stockholder value. Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves. In October 2022, our Board of Directors authorized a share repurchase program.
As a result, the price of our common stock could fluctuate in the future without regard to our operating performance. 15 Table of Contents We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term stockholder value.
Certain of our software applications are also utilized by third parties who provide outsourced administrative functions, which may increase the risk of a cybersecurity incident. Although we maintain insurance coverage for various cybersecurity risks, there can be no guarantee that all costs or losses incurred will be fully insured.
Certain of our software applications are also hosted by third parties who provide outsourced administrative functions, which may increase the risk of a cybersecurity incident.
Failure to comply with any legislation or regulation could potentially result in substantial fines, criminal sanctions or operational changes.
Failure to comply with any legislation, regulation or policy, including as a result of making good faith interpretations that may differ from those taken by enforcement authorities in relevant jurisdictions, could potentially result in substantial fines, criminal sanctions, reputational harm or operational changes.
Additionally, potential climate change regulation, including a potential carbon tax, could increase the overall cost of fuel to us and have a material adverse effect on us.
Additionally, potential climate change regulation could increase the overall cost of fuel to us and have a material adverse effect on us. See “Operational Risks– Severe weather events and other natural occurrences may materially adversely impact our operations and markets .” Risks Related to our Indebtedness and Liquidity Our significant indebtedness exposes us to various risks.
For example, the European Union’s (“EU”) General Data Protection Regulation (Regulation (EU) 2016/679) (the “GDPR”) has stringent data protection requirements and provides for significant penalties. Non-compliance with the GDPR could lead to lower revenues, increased costs (including fines, which could be significant) and other material adverse effects on our results of operations.
Non-compliance could lead to lower revenues, increased costs (including fines, which could be significant) and other material adverse effects on our results of operations. Countries such as the United Kingdom (the “UK”) have implemented the GDPR through their own legislation and other countries in which we operate have proposed or adopted their own data protection legislation.
In certain cases, the fluctuations have been unrelated to the operating performance of the affected companies. As a result, the price of our common stock could fluctuate in the future without regard to our operating performance.
In addition, prices in the stock market have been volatile over the past few years. In certain cases, the fluctuations have been unrelated to the operating performance of the affected companies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese policies go through an internal review process and are approved by appropriate members of management. The Company’s Chief Information Officer is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Board.
Biggest changeIn the event we identify a cybersecurity incident, we have defined procedures to respond to and remediate such incident. These policies and procedures go through an internal review process and are approved by appropriate members of management. The Company’s Chief Information Officer is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Board.
Item 1C. Cybersecurity We have a cross-departmental approach to addressing cybersecurity risk, including input from employees and our Board of Directors (the "Board").
Item 1C. Cybersecurity We have a cross-departmental approach to addressing cybersecurity risk, including input from employees and our Board of Directors (the “Board”).
We also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings. We have continued to expand investments in IT security, including additional end-user training, using layered defenses, identifying and protecting critical assets, strengthening monitoring and alerting, and engaging experts.
We also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings. We have continued to expand investments in IT security to mitigate cybersecurity risks, including additional end-user training, using layered defenses, identifying and protecting critical assets, strengthening monitoring and alerting, and engaging experts.
Our information technology (IT) security team reviews enterprise risk management-level cybersecurity risks annually, and key cybersecurity risks are incorporated into the Enterprise Risk Management Council’s framework.
Our information technology (“IT”) security team reviews enterprise risk management-level cybersecurity risks annually, and key cybersecurity risks are incorporated into the Enterprise Risk Management Council’s framework.
Our cybersecurity risk management program leverages the National Institute of Standards and Technology (NIST) framework, which organizes cybersecurity risks into five categories: identify, protect, detect, respond and recover. We regularly assess the threat landscape and take a holistic view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection and mitigation.
Our cybersecurity risk management program leverages the National Institute of Standards and Technology (“NIST”) framework, which organizes cybersecurity risks into six categories: govern, identify, protect, detect, respond and recover. We regularly assess the threat landscape and take a holistic view of cybersecurity risks, with a layered cybersecurity strategy based on prevention, detection and mitigation.
For example, in 2022, the Board hosted an expert to discuss developments in the cybersecurity threat landscape and speakers who discussed digital, technology and innovation trends across industries. We face a number of cybersecurity risks in connection with our business.
For example, in 2024, the Board hosted an expert to discuss developments in the cybersecurity threat landscape and current cybersecurity trends across industries. 23 Table of Contents We face a number of cybersecurity risks in connection with our business.
Removed
For more 23 Table of Contents information about the cybersecurity risks we face, see the risk factor entitled “Disruptions in our information technology systems or a compromise of security with respect to our systems could adversely affect our operating results by limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, implement strategic initiatives or support our online ordering system” in Item 1A- Risk Factors.
Added
For more information about the cybersecurity risks we face, and how, if realized, those risks are reasonably likely to materially affect us, see the risk factor entitled “Our financial performance and our reputation could be adversely affected, and we could be subject to legal liability or regulatory enforcement actions, if we are unable to protect against, or effectively respond to, cyberattacks or other cyber incidents” in Item 1A- Risk Factors.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeUnited States ● Alabama (GR 30, S 9) ● Maine (GR 4) ● Oklahoma (GR 27, S 8) ● Alaska (GR 2) ● Maryland (GR 16, S 8) ● Oregon (GR 12, S 6) ● Arizona (GR 19, S 9) ● Massachusetts (GR 17, S 5) ● Pennsylvania (GR 23, S 8) ● Arkansas (GR 13, S 3) ● Michigan (GR 11, S 7) ● Puerto Rico (GR 2) ● California (GR 94, S 41) ● Minnesota (GR 12, S 5) ● Rhode Island (GR 2) ● Colorado (GR 18, S 5) ● Mississippi (GR 14, S 1) ● South Carolina (GR 27, S 10) ● Connecticut (GR 7, S 3) ● Missouri (GR 23, S 7) ● South Dakota (GR 2) ● Delaware (GR 3) ● Montana (GR 2) ● Tennessee (GR 31, S 13) ● Florida (GR 55, S 34) ● Nebraska (GR 5, S 1) ● Texas (GR 126, S 47) ● Georgia (GR 39, S 13) ● Nevada (GR 17, S 6) ● Utah (GR 10, S 5) ● Idaho (GR 6, S 2) ● New Hampshire (GR 1, S 2) ● Vermont (GR 2, S 1) ● Illinois (GR 18, S 10) ● New Jersey (GR 14, S 10) ● Virginia (GR 27, S 14) ● Indiana (GR 10, S 5) ● New Mexico (GR 10, S 3) ● Washington (GR 26, S 10) ● Iowa (GR 11, S 4) ● New York (GR 25, S 5) ● West Virginia (GR 8, S 3) ● Kansas (GR 16, S 5) ● North Carolina (GR 34, S 14) ● Wisconsin (GR 11, S 6) ● Kentucky (GR 14, S 5) ● North Dakota (GR 5) ● Wyoming (GR 5) ● Louisiana (GR 43, S 15) ● Ohio (GR 24, S 16) Canada Europe Asia-Pacific ● Alberta (GR 25, S 11) ● Belgium (S 7) ● Australia (S 23) ● British Columbia (GR 24, S 5) ● France (S 6) ● New Zealand (S 19) ● Manitoba (GR 5) ● Germany (S 7) ● New Brunswick (GR 5, S 1) ● Netherlands (S 15) ● Newfoundland (GR 5) ● United Kingdom (S 3) ● Nova Scotia (GR 4, S 1) ● Ontario (GR 30, S 8) ● Prince Edward Island (GR 1) ● Quebec (GR 9, S 4) ● Saskatchewan (GR 7, S 2) Our branch locations generally include facilities for displaying equipment and, depending on the location, may include separate areas for equipment service, storage and displaying contractor supplies.
Biggest changeUnited States ● Alabama (GR 33, S 10) ● Maine (GR 4, S 1) ● Oklahoma (GR 26, S 9) ● Alaska (GR 2) ● Maryland (GR 16, S 8) ● Oregon (GR 13, S 7) ● Arizona (GR 24, S 9) ● Massachusetts (GR 19, S 6) ● Pennsylvania (GR 24, S 9) ● Arkansas (GR 14, S 4) ● Michigan (GR 12, S 8) ● Puerto Rico (GR 2) ● California (GR 95, S 44) ● Minnesota (GR 13, S 5) ● Rhode Island (GR 2) ● Colorado (GR 17, S 6) ● Mississippi (GR 14, S 4) ● South Carolina (GR 30, S 10) ● Connecticut (GR 7, S 3) ● Missouri (GR 22, S 9) ● South Dakota (GR 2) ● Delaware (GR 3, S 1) ● Montana (GR 2) ● Tennessee (GR 33, S 14) ● Florida (GR 61, S 37) ● Nebraska (GR 5, S 2) ● Texas (GR 123, S 51) ● Georgia (GR 40, S 15) ● Nevada (GR 16, S 10) ● Utah (GR 10, S 5) ● Idaho (GR 7, S 5) ● New Hampshire (GR 1, S 2) ● Vermont (GR 2, S 1) ● Illinois (GR 17, S 11) ● New Jersey (GR 13, S 10) ● Virginia (GR 28, S 17) ● Indiana (GR 15, S 5) ● New Mexico (GR 9, S 5) ● Washington (GR 26, S 12) ● Iowa (GR 10, S 4) ● New York (GR 26, S 7) ● West Virginia (GR 8, S 4) ● Kansas (GR 16, S 5) ● North Carolina (GR 36, S 14) ● Wisconsin (GR 11, S 7) ● Kentucky (GR 14, S 6) ● North Dakota (GR 5) ● Wyoming (GR 5) ● Louisiana (GR 42, S 15) ● Ohio (GR 25, S 16) Canada Europe Australasia ● Alberta (GR 24, S 12) ● Belgium (S 7) ● Australia (S 37) ● British Columbia (GR 26, S 7) ● France (S 6) ● New Zealand (S 19) ● Manitoba (GR 5, S 2) ● Germany (S 7) ● New Brunswick (GR 5, S 1) ● Netherlands (S 15) ● Newfoundland (GR 5) ● United Kingdom (S 4) ● Nova Scotia (GR 4, S 1) ● Ontario (GR 30, S 10) ● Prince Edward Island (GR 1) ● Quebec (GR 10, S 6) ● Saskatchewan (GR 7, S 2) Our branch locations generally include facilities for displaying equipment and, depending on the location, may include separate areas for equipment service, storage and displaying contractor supplies.
Additionally, we maintain other corporate facilities, including in Shelton, Connecticut, where we occupy approximately 12,000 square feet under a lease that expires in 2025, and in Scottsdale, Arizona, where we occupy approximately 20,000 square feet under a lease that expires in 2029.
Additionally, we maintain other corporate facilities, including in Shelton, Connecticut, where we occupy approximately 12,000 square feet under a lease that expires in 2028, and in Scottsdale, Arizona, where we occupy approximately 20,000 square feet under a lease that expires in 2029.
Approximately 40 percent of this fleet is leased and the balance is owned. 24 Table of Contents Our corporate headquarters are located in Stamford, Connecticut, where we occupy approximately 47,000 square feet under a lease that expires in 2030.
Approximately 45 percent of this fleet is leased and the balance is owned. Our corporate headquarters are located in Stamford, Connecticut, where we occupy approximately 47,000 square feet under a lease that expires in 2030.
We own 131 of our branch locations and lease the other branch locations. We also lease or own other premises used for purposes such as district and regional offices and service centers. We have a fleet of approximately 16,400 vehicles. These vehicles are used for delivery, maintenance, management and sales functions.
We own 127 of our branch locations and lease the other branch locations. We also lease or own other premises used for purposes such as district and regional offices and service centers. 24 Table of Contents We have a fleet of approximately 17,300 vehicles. These vehicles are used for delivery, maintenance, management and sales functions.
Item 2. Properties As of January 1, 2024, we operated 1,584 rental locations. 1,357 of these locations are in the United States, 147 are in Canada, 38 are in Europe and 42 are in our Asia-Pacific network (which is comprised of our locations in Australia and New Zealand).
Item 2. Properties As of January 1, 2025, we operated 1,686 rental locations. 1,433 of these locations are in the United States, 158 are in Canada, 39 are in Europe and 56 are in our Australasia network (which is comprised of our locations in Australia and New Zealand).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+2 added−1 removed0 unchanged
Biggest changeThe number of beneficial owners is substantially greater than the number of record holders because a large portion of our common stock is held of record in broker “street names.” Purchases of Equity Securities by the Issuer The following table provides information about acquisitions of Holdings’ common stock by Holdings during the fourth quarter of 2023: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program (2) October 1, 2023 to October 31, 2023 239,659 (1) $ 425.60 209,252 November 1, 2023 to November 30, 2023 93,261 (1) $ 455.84 92,643 December 1, 2023 to December 31, 2023 216,983 (1) $ 554.06 215,296 Total 549,903 $ 481.42 $ 517,191 $ 250,000,148 (1) In October 2023, November 2023 and December 2023, 30,407, 618 and 1,687 shares, respectively, were withheld by Holdings to satisfy tax withholding obligations upon the vesting of restricted stock unit awards.
Biggest changeThe number of beneficial owners is substantially greater than the number of record holders because a large portion of our common stock is held of record in broker “street names.” Issuer Purchases of Equity Securities The following table provides information about acquisitions of Holdings’ common stock by Holdings during the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program (2) October 1, 2024 to October 31, 2024 141,641 (1) $ 815.81 141,412 November 1, 2024 to November 30, 2024 179,442 (1) $ 833.52 147,720 December 1, 2024 to December 31, 2024 175,242 (1) $ 785.14 173,008 Total 496,325 $ 811.38 $ 462,140 $ 250,000,268 (1) In October 2024, November 2024 and December 2024, 229, 31,722 and 2,234 shares, respectively, were withheld by Holdings to satisfy tax withholding obligations upon the vesting of restricted stock unit awards.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Holdings’ common stock trades on the New York Stock Exchange under the symbol “URI.” As of January 1, 2024, there were 65 holders of record of our common stock.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Holdings’ common stock trades on the New York Stock Exchange under the symbol “URI.” As of January 1, 2025, there were 62 holders of record of our common stock.
These shares were not acquired pursuant to any repurchase plan or program. (2) On October 24, 2022, our Board of Directors authorized a $1.25 billion share repurchase program. We expect to complete the program in the first quarter of 2024. On January 24, 2024, our Board of Directors authorized a new $1.5 billion share repurchase program.
These shares were not acquired pursuant to any repurchase plan or program. (2) On January 24, 2024, our Board of Directors authorized a $1.5 billion share repurchase program, and repurchases under this program began in March 2024. We have paused repurchases under the program due to our pending acquisition of H&E.
The amount in the table above reflects the remaining authorization as of December 31, 2023 under the current $1.25 billion share repurchase program. Equity Compensation Plans For information regarding equity compensation plans, see Item 12 of this annual report on Form 10-K. 25 Table of Contents
The repurchases above (as well as the total program size) do not include the excise tax, which totaled $13 million for the year ended December 31, 2024. Equity Compensation Plans For information regarding equity compensation plans, see Item 12 of this annual report on Form 10-K. 25 Table of Contents
Removed
We plan to begin repurchases under the new program following the planned completion of the existing $1.25 billion share repurchase program in the first quarter of 2024, and intend to purchase $1.25 billion under the new program in 2024 and then complete the program by the end of the first quarter of 2025.
Added
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.
Added
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. A 1 percent excise tax is imposed on “net repurchases” (certain purchases minus certain issuances) of common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

128 edited+20 added−36 removed86 unchanged
Biggest changeThe table below provides a reconciliation between net income and EBITDA and adjusted EBITDA: Year Ended December 31, 2023 2022 2021 Net income $ 2,424 $ 2,105 $ 1,386 Provision for income taxes 787 697 460 Interest expense, net 635 445 424 Depreciation of rental equipment 2,350 1,853 1,611 Non-rental depreciation and amortization 431 364 372 EBITDA 6,627 5,464 4,253 Merger related costs (1) — — 3 Restructuring charge (2) 28 — 2 Stock compensation expense, net (3) 94 127 119 Impact of the fair value mark-up of acquired fleet (4) 108 27 37 Adjusted EBITDA $ 6,857 $ 5,618 $ 4,414 Net income margin 16.9 % 18.1 % 14.3 % Adjusted EBITDA margin 47.8 % 48.3 % 45.4 % The table below provides a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA: 30 Table of Contents Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 4,704 $ 4,433 $ 3,689 Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA: Amortization of deferred financing costs and original issue discounts (14) (13) (13) Gain on sales of rental equipment 786 566 431 Gain on sales of non-rental equipment 21 9 10 Insurance proceeds from damaged equipment 38 32 25 Merger related costs (1) — — (3) Restructuring charge (2) (28) — (2) Stock compensation expense, net (3) (94) (127) (119) Loss on repurchase/redemption of debt securities (5) — (17) (30) Changes in assets and liabilities 107 (151) (328) Cash paid for interest 614 406 391 Cash paid for income taxes, net 493 326 202 EBITDA 6,627 5,464 4,253 Add back: Merger related costs (1) — — 3 Restructuring charge (2) 28 — 2 Stock compensation expense, net (3) 94 127 119 Impact of the fair value mark-up of acquired fleet (4) 108 27 37 Adjusted EBITDA $ 6,857 $ 5,618 $ 4,414 _________________ (1) This reflects transaction costs associated with the General Finance acquisition that was completed in May 2021.
Biggest changeThe table below provides a reconciliation between net income and EBITDA and adjusted EBITDA: Year Ended December 31, 2024 2023 2022 Net income $ 2,575 $ 2,424 $ 2,105 Provision for income taxes 813 787 697 Interest expense, net 691 635 445 Depreciation of rental equipment 2,466 2,350 1,853 Non-rental depreciation and amortization 437 431 364 EBITDA 6,982 6,627 5,464 Restructuring charge (1) 3 28 — Stock compensation expense, net (2) 112 94 127 Impact of the fair value mark-up of acquired fleet (3) 63 108 27 Adjusted EBITDA $ 7,160 $ 6,857 $ 5,618 Net income margin 16.8 % 16.9 % 18.1 % Adjusted EBITDA margin 46.7 % 47.8 % 48.3 % The table below provides a reconciliation between net cash provided by operating activities and EBITDA and adjusted EBITDA: 30 Table of Contents Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 4,546 $ 4,704 $ 4,433 Adjustments for items included in net cash provided by operating activities but excluded from the calculation of EBITDA: Amortization of deferred financing costs and original issue discounts (15) (14) (13) Gain on sales of rental equipment 710 786 566 Gain on sales of non-rental equipment 17 21 9 Insurance proceeds from damaged equipment 51 38 32 Restructuring charge (1) (3) (28) — Stock compensation expense, net (2) (112) (94) (127) Loss on repurchase/redemption/amendment of debt (4) (1) — (17) Changes in assets and liabilities 121 107 (151) Cash paid for interest 674 614 406 Cash paid for income taxes, net 994 493 326 EBITDA 6,982 6,627 5,464 Add back: Restructuring charge (1) 3 28 — Stock compensation expense, net (2) 112 94 127 Impact of the fair value mark-up of acquired fleet (3) 63 108 27 Adjusted EBITDA $ 7,160 $ 6,857 $ 5,618 _________________ (1) This primarily reflects severance and branch closure charges associated with our restructuring programs.
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.
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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data and unless otherwise indicated) We have omitted discussions comparing 2022 and 2021 results, as such disclosures were included in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollars in millions, except per share data and unless otherwise indicated) We have omitted discussions comparing 2023 and 2022 results, as such disclosures were included in our Annual Report on Form 10-K for the year ended December 31, 2023.
We conduct the goodwill impairment test at the reporting unit level, which is one level below the operating segment level. Financial Accounting Standards Board ("FASB") guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
We conduct the goodwill impairment test at the reporting unit level, which is one level below the operating segment level. Financial Accounting Standards Board (“FASB”) guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that Holdings’ guarantees of URNA indebtedness comply with the conditions set forth in Rule 3-10, which enables us to present summarized financial information for Holdings, URNA and the consolidated guarantor subsidiaries in accordance with Rule 13-01 of Regulation S-X.
Based on our understanding of Rule 3-10 of Regulation S-X (“Rule 3-10”), we believe that Holdings’ guarantees of URNA indebtedness comply with the conditions set forth in Rule 3-10, which enables us to present summarized financial information for Holdings, URNA and the consolidated guarantor subsidiaries in accordance with Rule 13-01 of Regulation S-X.
Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of December 31, 2023, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of December 31, 2024, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of December 31, 2023, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
Based on our current total indebtedness leverage ratio (as defined in the applicable debt agreements) and usage of the ABL facility as of December 31, 2024, we met the criteria under the applicable debt agreements for these exceptions, and as a result we were not restricted in our ability to make share repurchases and dividend payments.
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, 2023).
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, 2024).
The equipment and inventory receipts from the suppliers pursuant to these purchase orders and the related payments to the suppliers are expected to be completed primarily throughout 2024. The amount of our future capital expenditures will depend on a number of factors, including general economic conditions and growth prospects.
The equipment and inventory receipts from the suppliers pursuant to these purchase orders and the related payments to the suppliers are expected to be completed primarily throughout 2025. The amount of our future capital expenditures will depend on a number of factors, including general economic conditions and growth prospects.
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, 2023, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable.
When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL facility size may be included when calculating specified availability under the ABL facility. As of December 31, 2024, specified availability under the ABL facility exceeded the required threshold and, as a result, this financial covenant was inapplicable.
(3) As of December 31, 2023, we had outstanding advance purchase orders, which were negotiated in the ordinary course of business, with our equipment and inventory suppliers. These purchase orders can generally be cancelled by us without cancellation penalties.
(3) As of December 31, 2024, we had outstanding advance purchase orders, which were negotiated in the ordinary course of business, with our equipment and inventory suppliers. These purchase orders can generally be cancelled by us without cancellation penalties.
See note 12 to the consolidated financial statements for further debt information, and note 13 for further finance lease and operating lease information. (2) Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of December 31, 2023.
See note 12 to the consolidated financial statements for further debt information, and note 13 for further finance lease and operating lease information. (2) Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of December 31, 2024.
In connection with our goodwill impairment test that was conducted as of October 1, 2022, we bypassed the optional qualitative assessment for each reporting unit and quantitatively compared the fair values of our reporting units with their carrying amounts.
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 digital capabilities, including our Total Control® platform, allow our sales teams to provide contactless end-to-end customer service; 27 Table of Contents • The further optimization of our customer mix and fleet mix, with a dual objective : to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth.
Our digital capabilities, including our Total Control® platform, allow our sales teams to provide contactless end-to-end customer service; • The further optimization of our customer mix and fleet mix, with a dual objective : to enhance our performance in serving our current customer base, and to focus on the accounts and customer types that are best suited to our strategy for profitable growth.
(3) 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.
(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.
Based on our most recently completed quarterly reviews, there were no indications of impairment associated with our rental equipment, property and equipment, lease assets or other intangible assets. 35 Table of Contents Income Taxes . We recognize deferred tax assets and liabilities for certain future deductible or taxable temporary differences expected to be reported in our income tax returns.
Based on our most recently completed quarterly reviews, there were no indications of impairment associated with our rental equipment, property and equipment, lease assets or other intangible assets. Income Taxes . We recognize deferred tax assets and liabilities for certain future deductible or taxable temporary differences expected to be reported in our income tax returns.
The specialty segment rents products (and provides setup and other services on such rented equipment) including i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and iv) mobile storage equipment and modular office space.
The specialty segment rents products (and provides setup and other services on such rented equipment) including (i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, (ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, (iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, (iv) mobile storage equipment and modular office space, and (v) surface protection mats.
Although we believe aggregating these divisions into our reporting segments for segment reporting purposes is appropriate, to the extent that there are significant margin variances that do not 36 Table of Contents converge, we may be required to disaggregate the divisions into separate reporting segments. Any such disaggregation would have no impact on our consolidated results of operations.
Although we believe aggregating these divisions into our reporting segments for segment reporting purposes is appropriate, to the extent that there are significant margin variances that do not converge, we may be required to disaggregate the divisions into separate reporting segments. Any such disaggregation would have no impact on our consolidated results of operations.
Delivery and pick-up revenue, which represented approximately eight percent of equipment rental revenue in 2023, is the most significant ancillary revenue component. Sales of rental equipment represent our revenues from the sale of used rental equipment. Sales of new equipment represent our revenues from the sale of new equipment.
Delivery and pick-up revenue, which represented approximately eight percent of equipment rental revenue in 2024, is the most significant ancillary revenue component. Sales of rental equipment represent our revenues from the sale of used rental equipment. Sales of new equipment represent our revenues from the sale of new equipment.
If the estimated salvage values of all of our rental equipment were to increase or decrease by one percentage point, we estimate that our annual depreciation expense would change by approximately $27.
If the estimated salvage values of all of our rental equipment were to increase or decrease by one percentage point, we estimate that our annual depreciation expense would change by approximately $29.
The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a limited presence in Europe, Australia and New Zealand.
The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a smaller presence in Europe, Australia and New Zealand.
As of December 31, 2023, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization, term loan and repurchase facilities and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
As of December 31, 2024, we were in compliance with the covenants and other provisions of the ABL, accounts receivable securitization and term loan facilities and the senior notes. Any failure to be in compliance with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
We have a dedicated team responsible for reducing waste in our operational processes, with the objectives of: condensing the cycle time associated with preparing equipment for rent; optimizing our resources for delivery and pickup of equipment; improving the effectiveness and efficiency of our repair and maintenance operations; and implementing customer service best practices; • 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 have a dedicated team responsible for reducing waste in our operational processes, with the objectives of: condensing the cycle time associated with preparing equipment for rent; optimizing our resources for delivery and pickup of equipment; improving the effectiveness and efficiency of our repair and maintenance operations; and implementing customer service best practices; • The continued expansion and cross-selling of adjacent specialty and services products, which enables us to provide a “one-stop” shop for our customers .
For the five year period ended December 31, 2023, 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.
For the five year period ended December 31, 2024, 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.
Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. Credit ratings also affect the costs of derivative transactions, including interest rate and foreign currency derivative transactions. As a 41 Table of Contents result, negative changes in our credit ratings could adversely impact our costs of funding.
Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. Credit ratings also affect the costs of derivative transactions, including interest rate and foreign currency derivative transactions. As a result, negative changes in our credit ratings could adversely impact our costs of funding.
We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand (see Item 2—Properties for further detail).
We primarily operate in the United States and Canada, and have a smaller presence in Europe, Australia and New Zealand (see Item 2—Properties for further detail).
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”).
Other than the guarantee by our Canadian 42 Table of Contents 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”).
As of December 31, 2023, there were no open restructuring programs. (3) Represents non-cash, share-based payments associated with the granting of equity instruments. (4) 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.
As of December 31, 2024, there were no open restructuring programs. (2) Represents non-cash, share-based payments associated with the granting of equity instruments. (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.
Sources and Uses of Cash . 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.
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.
Net payments for rental capital expenditures (defined as payments for purchases of rental equipment less the proceeds from sales of rental equipment) were $2.140 billion, $2.471 billion and $2.030 billion in 2023, 2022 and 2021, respectively. To access the capital markets, we rely on credit rating agencies to assign ratings to our securities as an indicator of credit quality.
Net payments for rental capital expenditures (defined as payments for purchases of rental equipment less the proceeds from sales of rental equipment) were $2.232 billion, $2.140 billion and $2.471 billion in 2024, 2023 and 2022, respectively. To access the capital markets, we rely on credit rating agencies to assign ratings to our securities as an indicator of credit quality.
Critical Accounting Policies We prepare our consolidated financial statements in accordance with GAAP. A summary of our significant accounting policies is contained in note 2 to our consolidated financial statements. In applying many accounting principles, we make assumptions, estimates and/or judgments.
Critical Accounting Policies 32 Table of Contents We prepare our consolidated financial statements in accordance with GAAP. A summary of our significant accounting policies is contained in note 2 to our consolidated financial statements. In applying many accounting principles, we make assumptions, estimates and/or judgments.
We 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.
We 34 Table of Contents 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.
We offer approximately 4,800 classes of equipment for rent to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. Our revenues are derived from the following sources: equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales and service and other revenues.
We offer our equipment for rent to a diverse customer base that includes construction and industrial companies, manufacturers, utilities, municipalities, homeowners and government entities. Our revenues are derived from the following sources: equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales and service and other revenues.
Business-Industry Overview and Economic Outlook" for a discussion of our end-markets, and Item 1A- Risk Factors for further discussion of the risks related to us and our business. Executive Overview We are the largest equipment rental company in the world, with an integrated network of 1,584 rental locations.
Business-Industry Overview and Economic Outlook” for a discussion of our end-markets, and Item 1A- Risk Factors for further discussion of the risks related to us and our business. Executive Overview We are the largest equipment rental company in the world, with an integrated network of 1,686 rental locations.
Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns; • A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement .
Our fleet team's analyses are aligned with these objectives to identify trends in equipment categories and define action plans that can generate improved returns; 27 Table of Contents • A continued focus on “Lean” management techniques, including kaizen processes focused on continuous improvement .
These include a fleet of rental equipment with a total original equipment cost (“OEC”) of $20.7 billion, and a North American branch network that operates in 49 U.S. states and every Canadian province, and serves 99 of the 100 largest metropolitan areas in the U.S.
These include a fleet of rental equipment with a total original equipment cost (“OEC”) of $21.4 billion, and a North American branch network that operates in 49 U.S. states and every Canadian province, and serves 99 of the 100 largest metropolitan areas in the U.S.
As discussed below, we regularly review for impairments. When we make an acquisition, we also acquire other assets and assume liabilities. These other assets and liabilities typically include, but are not limited to, parts inventory, accounts receivable, accounts payable and other working capital items.
As discussed below, we regularly review for impairments. 33 Table of Contents When we make an acquisition, we also acquire other assets and assume liabilities. These other assets and liabilities typically include, but are not limited to, parts inventory, accounts receivable, accounts payable and other working capital items.
As of December 31, 2023, we had cash and cash equivalents of $363. Cash equivalents at December 31, 2023 consist of direct obligations of financial institutions rated A or better. We believe that our existing sources of cash will be sufficient to support our existing operations over the next 12 months.
As of December 31, 2024, we had cash and cash equivalents of $457. Cash equivalents at December 31, 2024 consist of direct obligations of financial institutions rated A or better. We believe that our existing sources of cash will be sufficient to support our existing operations over the next 12 months.
Global Economic Conditions Our operations are impacted by global economic conditions, including inflation, increased interest rates 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.
Global Economic Conditions 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 the extent that the useful lives of all of our depreciable property and equipment were to increase or decrease by one year, we estimate that our annual non-rental depreciation expense would decrease or increase by approximately $42 or $64, respectively. Acquisition Accounting .
To the extent that the useful lives of all of our depreciable property and equipment were to increase or decrease by one year, we estimate that our annual non-rental depreciation expense would decrease or increase by approximately $44 or $66, respectively. Acquisition Accounting .
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.
Under our accounts receivable securitization facility, we are required, among other things, to maintain certain 41 Table of Contents financial tests relating to: (i) the default ratio, (ii) the delinquency ratio, (iii) the dilution ratio and (iv) days sales outstanding.
For the three years in the period ended December 31, 2023, sales of contractor supplies represented approximately 1 percent of our total revenues. 2023 sales of contractor supplies did not change materially from 2022. Service and other revenues .
For the three years in the period ended December 31, 2024, sales of contractor supplies represented approximately 1 percent of our total revenues. 2024 sales of contractor supplies did not change significantly from 2023. Service and other revenues .
Our credit ratings as of January 22, 2024 were as follows: Corporate Rating Outlook Moody’s Ba1 Stable Standard & Poor’s BB+ Stable A security rating is not a recommendation to buy, sell or hold securities.
Our credit ratings as of January 27, 2025 were as follows: Corporate Rating Outlook Moody’s Ba1 Stable Standard & Poor’s BB+ Stable A security rating is not a recommendation to buy, sell or hold securities.
See note 3 to our consolidated financial statements for further discussion of our revenue recognition accounting. 2023 total revenues of $14.3 billion increased 23.1 percent compared with 2022. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 95 percent of total revenue for the year ended December 31, 2023).
See note 3 to our consolidated financial statements for further discussion of our revenue recognition accounting. 2024 total revenues of $15.3 billion increased 7.1 percent compared with 2023. Equipment rentals and sales of rental equipment are our largest revenue types (together, they accounted for 95 percent of total revenue for the year ended December 31, 2024).
Equipment rentals include our revenues from renting equipment, as well as revenue related to the fees we charge customers: for equipment delivery and pick-up; to protect the customer against liability for damage to our equipment while on rent; for fuel; and for environmental costs. Collectively, these "ancillary fees" represented approximately 16 percent of equipment rental revenue in 2023.
Equipment rentals include our revenues from renting equipment, as well as revenue related to the fees we charge customers: for equipment delivery and pick-up; to protect the customer against liability for damage to our equipment while on rent; for fuel; and for environmental costs. Collectively, these “ancillary fees” represented approximately 17 percent of equipment rental revenue in 2024.
Additionally, the weighted average interest rates on our variable debt instruments were 6.3 percent in 2023 and 3.3 percent in 2022. We have experienced and are continuing to experience inflationary pressures. A portion of inflationary cost increases is passed on to customers.
Additionally, the weighted average interest rates on our variable debt instruments were 6.3 percent in 2024 and 1.4 percent in 2021. We have experienced and are continuing to experience inflationary pressures. A portion of inflationary cost increases is passed on to customers.
Since 2012, we have repurchased a total of $5.965 billion (inclusive of immaterial excise taxes, which were first imposed in 2023) of Holdings' common stock under our share repurchase programs (comprised of seven programs that have ended and the current program).
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 guarantees of URNA’s indebtedness are effectively junior to any indebtedness of our subsidiaries that are not guarantors, including our foreign 43 Table of Contents subsidiaries.
The guarantees of URNA’s indebtedness are effectively junior to any indebtedness of our subsidiaries that are not guarantors, including our foreign subsidiaries.
See below for further detail on each adjusting item. These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies.
These items are excluded from adjusted EBITDA internally when evaluating our operating performance and for strategic planning and forecasting purposes, and allow investors to make a more meaningful comparison between our core business operating results over different periods of time, as well as with those of other similar companies.
Revenues for each of the three years in the period ended December 31, 2023 were as follows: Year Ended December 31, Change 2023 2022 2021 2023 2022 Equipment rentals* $ 12,064 $ 10,116 $ 8,207 19.3% 23.3% Sales of rental equipment 1,574 965 968 63.1% (0.3)% Sales of new equipment 218 154 203 41.6% (24.1)% Contractor supplies sales 146 126 109 15.9% 15.6% Service and other revenues 330 281 229 17.4% 22.7% Total revenues $ 14,332 $ 11,642 $ 9,716 23.1% 19.8% *Equipment rentals variance components: Year-over-year change in average OEC 21.9% 13.6% Assumed year-over-year inflation impact (1) (1.5)% (1.5)% Fleet productivity (2) (0.7)% 9.4% Contribution from ancillary and re-rent revenue (3) (0.4)% 1.8% Total change in equipment rentals 19.3% 23.3% *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% _________________ (1) Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
Revenues for each of the three years in the period ended December 31, 2024 were as follows: 31 Table of Contents Year Ended December 31, Change 2024 2023 2022 2024 2023 Equipment rentals* $ 13,029 $ 12,064 $ 10,116 8.0% 19.3% Sales of rental equipment 1,521 1,574 965 (3.4)% 63.1% Sales of new equipment 282 218 154 29.4% 41.6% Contractor supplies sales 155 146 126 6.2% 15.9% Service and other revenues 358 330 281 8.5% 17.4% Total revenues $ 15,345 $ 14,332 $ 11,642 7.1% 23.1% *Equipment rentals variance components: Year-over-year change in average OEC 3.5% 21.9% Assumed year-over-year inflation impact (1) (1.5)% (1.5)% Fleet productivity (2) 4.1% (0.7)% Contribution from ancillary and re-rent revenue (3) 1.9% (0.4)% Total change in equipment rentals 8.0% 19.3% *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% _________________ (1) Reflects the estimated impact of inflation on the revenue productivity of fleet based on OEC, which is recorded at cost.
As of December 31, 2023, the indebtedness of our non-guarantors was comprised of (i) $1.300 billion of outstanding borrowings by the SPV in connection with the Company’s accounts receivable securitization facility, (ii) $99 of outstanding borrowings under the ABL facility by non-guarantor subsidiaries and (iii) $9 of finance leases of our non-guarantor 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.
These charges were primarily recognized in our general rentals segment. In support of our review for indicators of impairment, we perform a review of all assets at the district level relative to district performance and conclude whether indicators of impairment exist associated with our long-lived assets, including rental equipment. We also specifically review the financial performance of our rental equipment.
In support of our review for indicators of impairment, we perform a review of all assets at the district level relative to district performance and conclude whether indicators of impairment exist associated with our long-lived assets, including rental equipment. We also specifically review the financial performance of our rental equipment.
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 increase in 2023 reflects charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.
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.
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 increase in 2023 reflects charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.
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.
Year Ended December 31, 2023 2022 2021 Net income $ 2,424 $ 2,105 $ 1,386 Diluted earnings per share $ 35.28 $ 29.65 $ 19.04 Net income and diluted earnings per share for each of the three years in the period ended December 31, 2023 include the after-tax impacts of the items below.
Year Ended December 31, 2024 2023 2022 Net income $ 2,575 $ 2,424 $ 2,105 Diluted earnings per share $ 38.69 $ 35.28 $ 29.65 Net income and diluted earnings per share for each of the three years in the period ended December 31, 2024 include the after-tax impacts of the items below.
Other costs/(income) The table below includes the other costs/(income) in our consolidated statements of income, as well as key associated metrics, for the three years in the period ended December 31, 2023: Year Ended December 31, Change 2023 2022 2021 2023 2022 Selling, general and administrative ("SG&A") expense $ 1,527 $ 1,400 $ 1,199 9.1% 16.8% SG&A expense as a percentage of revenue 10.7 % 12.0 % 12.3 % (130) bps (30) bps Merger related costs — — 3 — (100.0)% Restructuring charge 28 — 2 — (100.0)% Non-rental depreciation and amortization 431 364 372 18.4% (2.2)% Interest expense, net 635 445 424 42.7% 5.0% Other (income) expense, net (19) (15) 7 26.7% (314.3)% Provision for income taxes 787 697 460 12.9% 51.5% Effective tax rate 24.5 % 24.9 % 24.9 % (40) bps — bps 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.
Other costs/(income) The table below includes the other costs/(income) in our consolidated statements of income, as well as key associated metrics, for the three years in the period ended December 31, 2024: 38 Table of Contents Year Ended December 31, Change 2024 2023 2022 2024 2023 Selling, general and administrative (“SG&A”) expense $ 1,645 $ 1,527 $ 1,400 7.7% 9.1% SG&A expense as a percentage of revenue 10.7 % 10.7 % 12.0 % — bps (130) bps Restructuring charge 3 28 — (89.3)% — Non-rental depreciation and amortization 437 431 364 1.4% 18.4% Interest expense, net 691 635 445 8.8% 42.7% Other income, net (14) (19) (15) (26.3)% 26.7% Provision for income taxes 813 787 697 3.3% 12.9% Effective tax rate 24.0 % 24.5 % 24.9 % (50) bps (40) bps 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.
Gross margins by revenue classification were as follows: Year Ended December 31, Change 2023 2022 2021 2023 2022 Total gross margin 40.6% 42.9% 39.7% (230) bps 320 bps Equipment rentals 39.9% 42.0% 39.8% (210) bps 220 bps Sales of rental equipment 49.9% 58.7% 44.5% (880) bps 1,420 bps Sales of new equipment 17.9% 19.5% 16.7% (160) bps 280 bps Contractor supplies sales 32.2% 33.3% 28.4% (110) bps 490 bps Service and other revenues 38.5% 40.2% 39.3% (170) bps 90 bps 38 Table of Contents 2023 gross margin of 40.6 percent decreased 230 basis points from 2022.
Gross margins by revenue classification were as follows: Year Ended December 31, Change 2024 2023 2022 2024 2023 Total gross margin 40.1% 40.6% 42.9% (50) bps (230) bps Equipment rentals 39.9% 39.9% 42.0% — bps (210) bps Sales of rental equipment 46.7% 49.9% 58.7% (320) bps (880) bps Sales of new equipment 18.8% 17.9% 19.5% 90 bps (160) bps Contractor supplies sales 33.5% 32.2% 33.3% 130 bps (110) bps Service and other revenues 38.3% 38.5% 40.2% (20) bps (170) bps 2024 gross margin of 40.1 percent decreased 50 basis points from 2023.
Financial Overview Prior to taking actions pertaining to our financial flexibility and liquidity, we assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment.
The transaction is expected to close in the first quarter of 2025. Financial Overview Prior to taking actions pertaining to our financial flexibility and liquidity, we assess our available sources and anticipated uses of cash, including, with respect to sources, cash generated from operations and from the sale of rental equipment.
Segment Equipment Rentals Gross Profit Segment equipment rentals gross profit and gross margin for each of the three years in the period ended December 31, 2023 were as follows: General rentals Specialty Total 2023 Equipment Rentals Gross Profit $ 3,219 $ 1,595 $ 4,814 Equipment Rentals Gross Margin 36.6 % 48.9 % 39.9 % 2022 Equipment Rentals Gross Profit $ 2,905 $ 1,340 $ 4,245 Equipment Rentals Gross Margin 39.6 % 48.4 % 42.0 % 2021 Equipment Rentals Gross Profit $ 2,269 $ 998 $ 3,267 Equipment Rentals Gross Margin 37.4 % 46.8 % 39.8 % General rentals.
Segment equipment rentals gross profit and gross margin for each of the three years in the period ended December 31, 2024 were as follows: General rentals Specialty Total 2024 Equipment Rentals Gross Profit $ 3,232 $ 1,966 $ 5,198 Equipment Rentals Gross Margin 36.1 % 48.1 % 39.9 % 2023 Equipment Rentals Gross Profit $ 3,219 $ 1,595 $ 4,814 Equipment Rentals Gross Margin 36.6 % 48.9 % 39.9 % 2022 Equipment Rentals Gross Profit $ 2,905 $ 1,340 $ 4,245 Equipment Rentals Gross Margin 39.6 % 48.4 % 42.0 % General rentals.
On January 24, 2024, our Board of Directors declared a quarterly dividend of $1.63 per share, payable on February 28, 2024 to stockholders of record on February 14, 2024. Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment, and borrowings available under our ABL and accounts receivable securitization facilities.
On January 29, 2025, our Board of Directors declared a quarterly dividend of $1.79 per share, payable on February 26, 2025 to stockholders of record as of February 12, 2025. Our principal existing sources of cash are cash generated from operations and from the sale of rental equipment, and borrowings available under our ABL and accounts receivable securitization facilities.
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 2023, we paid dividends totaling $406 ($5.92 per share, which equates to a quarterly dividend per share of $1.48).
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.
Results of Operations As discussed in note 5 to our consolidated financial statements, our reportable segments are general rentals and specialty. 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.
Results of Operations As discussed in note 5 to our consolidated financial statements, our reportable segments are general rentals and specialty. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities.
Accounts payable decreased by $234, or 20.5 percent, from December 31, 2022 to December 31, 2023, primarily reflecting normal variability in business activity and the timing of payments.
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.
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 merger related costs, restructuring charge, stock compensation expense, net, and the impact of the fair value mark-up of acquired fleet.
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. See below for further detail on each adjusting item.
During 2022, we (i) generated cash from operating activities of $4.433 billion, (ii) generated cash from the sale of rental and non-rental equipment of $989 and (iii) received cash from debt proceeds, net of payments, of $1.644 billion.
Sources and Uses of Cash . 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.
The decrease in the adjusted EBITDA margin primarily reflects an 80 basis point decrease in equipment rentals gross margin (excluding depreciation and stock compensation expense) and a 470 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), partially offset by reduced SG&A expense as a percentage of revenue.
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).
We used cash during this period principally to (i) make payments for purchases of rental and non-rental equipment and intangible assets of $3.690 billion, (ii) purchase other companies for $2.340 billion and (iii) purchase shares of our common stock for $1.068 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.
For example, in November 2022, URNA issued $1.5 billion aggregate principal amount of senior secured notes at a 6 percent interest rate, while URNA's immediately prior issuance in August 2021 of $750 aggregate principal amount of senior unsecured notes was at a 3 ¾ percent interest rate.
(“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.
Accordingly, free cash flow should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity.
Accordingly, free cash flow should not be considered an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. The table below provides a reconciliation between net cash provided by operating activities and free cash flow.
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 normalization of the used equipment market, the expanded use of wholesale channels, and the impact of the Ahern Rentals acquisition.
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. Revenues.
The table below provides a reconciliation between net cash provided by operating activities and free cash flow. 42 Table of Contents Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 4,704 $ 4,433 $ 3,689 Payments for purchases of rental equipment (3,714) (3,436) (2,998) Payments for purchases of non-rental equipment and intangible assets (356) (254) (200) Proceeds from sales of rental equipment 1,574 965 968 Proceeds from sales of non-rental equipment 60 24 30 Insurance proceeds from damaged equipment 38 32 25 Free cash flow $ 2,306 $ 1,764 $ 1,514 Free cash flow for the year ended December 31, 2023 was $2.306 billion, an increase of $542 as compared to $1.764 billion for the year ended December 31, 2022.
Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 4,546 $ 4,704 $ 4,433 Payments for purchases of rental equipment (3,753) (3,714) (3,436) Payments for purchases of non-rental equipment and intangible assets (374) (356) (254) Proceeds from sales of rental equipment 1,521 1,574 965 Proceeds from sales of non-rental equipment 67 60 24 Insurance proceeds from damaged equipment 51 38 32 Free cash flow $ 2,058 $ 2,306 $ 1,764 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.
As of December 31, 2023, there were no open restructuring programs. (6) This reflects write-offs of leasehold improvements and other fixed assets. (7) Reflects the difference between the net carrying amount and the total purchase price of the redeemed notes. For additional information, see "Results of Operations-Other costs/(income)-Interest expense, net" below. 29 Table of Contents EBITDA GAAP Reconciliations .
As of December 31, 2024, there were no open 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 .
See "Financial Overview" above for a summary of the 2023 capital structure actions taken to improve our financial flexibility and liquidity. On October 24, 2022, our Board of Directors authorized a $1.25 billion share repurchase program.
See “Financial Overview” above for a summary of the 2024 capital structure actions taken to improve our financial flexibility and liquidity. 39 Table of Contents 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 may be required to change these estimates based on changes in our industry or other changing circumstances.
We may be required to change these estimates based on changes in our industry or other changing circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets.
For the three years in the period ended December 31, 2023, service and other revenues represented approximately 2 percent of our total revenues. 2023 service and other revenues increased 17.4 percent from 2022 primarily due to growth initiatives. Fourth Quarter Items .
For the three years in the period ended December 31, 2024, service and other revenues represented approximately 2 percent of our total revenues. 2024 service and other revenues did not change significantly from 2023. Fourth Quarter Items .
The facility expires in June 2024 and may be further extended by the mutual consent of the parties to the repurchase facility agreement. As of December 31, 2023, we had available liquidity of $3.330 billion, comprised of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.
The facility expires in June 2025 and may be extended on a 364-day basis by mutual agreement with the purchasers under the facility. As of December 31, 2024, we had available liquidity of $2.845 billion, comprised of cash and cash equivalents, and availability under the ABL and accounts receivable securitization facilities.
As of December 31, 2023, the total liability associated with our restructuring programs was $21. 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.
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.
Year Ended December 31, 2023 2022 2021 Tax rate applied to items below 25.3 % 25.3 % 25.3 % Contribution to net income (after-tax) Impact on diluted earnings per share Contribution to net income (after-tax) Impact on diluted earnings per share Contribution to net income (after-tax) Impact on diluted earnings per share Merger related costs (1) $ — $ — $ — $ — $ (2) $ (0.03) Merger related intangible asset amortization (2) (160) (2.33) (126) (1.79) (143) (1.98) Impact on depreciation related to acquired fleet and property and equipment (3) (113) (1.65) (40) (0.56) (12) (0.16) Impact of the fair value mark-up of acquired fleet (4) (81) (1.17) (20) (0.29) (28) (0.38) Restructuring charge (5) (21) (0.31) — — (1) (0.02) Asset impairment charge (6) — — (2) (0.03) (10) (0.14) Loss on repurchase/redemption of debt securities (7) — — (13) (0.18) (22) (0.31) (1) This reflects transaction costs associated with the General Finance acquisition that was completed in May 2021.
Year Ended December 31, 2024 2023 2022 Tax rate applied to items below 25.3 % 25.3 % 25.3 % Contribution to net income (after-tax) Impact on diluted earnings per share Contribution to net income (after-tax) Impact on diluted earnings per share Contribution to net income (after-tax) Impact on diluted earnings per share Merger related intangible asset amortization (1) $ (143) $ (2.14) $ (160) $ (2.33) $ (126) $ (1.79) Impact on depreciation related to acquired fleet and property and equipment (2) (102) (1.53) (113) (1.65) (40) (0.56) Impact of the fair value mark-up of acquired fleet (3) (47) (0.71) (81) (1.17) (20) (0.29) Restructuring charge (4) (2) (0.04) (21) (0.31) — — Asset impairment charge (5) (3) (0.05) — — (2) (0.03) Loss on repurchase/redemption/amendment of debt (6) (1) (0.01) — — (13) (0.18) (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).
For the year ended December 31, 2023, general rentals’ equipment rentals gross profit increased by $314, and equipment rentals gross margin decreased by 300 basis points, from 2022, primarily due to the impact of the Ahern Rentals acquisition.
For the year ended December 31, 2024, equipment rentals gross profit increased by $371, and equipment rentals gross margin decreased by 80 basis points from 2023. Gross margin decreased primarily due to increased depreciation expense, which largely reflected the impact of the Yak acquisition. Gross Margin .
To date, our supply chain disruptions have been limited, but we may experience more severe supply chain disruptions in the future. Interest rates on our debt instruments have increased recently.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA one percentage point decrease in market interest rates as of December 31, 2023 would increase the fair value of our fixed rate 44 Table of Contents indebtedness by approximately five percent.
Biggest changeA one percentage point decrease in market interest rates as of December 31, 2024 would increase the fair value of our fixed rate indebtedness by approximately four percent. For additional information concerning the fair value and terms of our fixed rate debt, see note 11 (see “Fair Value of Financial Instruments”) and note 12 to our consolidated financial statements.
Based on the size of our foreign operations relative to the Company as a whole, we do not believe that a 10 percent change in exchange rates would have a material impact on our earnings. We do not engage in purchasing forward exchange contracts for speculative purposes. 45 Table of Contents
Based on the size of our foreign operations relative to the Company as a whole, we do not believe that a 10 percent change in exchange rates would have a material impact on our earnings. We do not engage in purchasing forward exchange contracts for speculative purposes. 44 Table of Contents
As of December 31, 2023, based upon the amount of our variable rate debt outstanding, our annual after-tax earnings would decrease by approximately $27 for each one percentage point increase in the interest rates applicable to our variable rate debt. The amount of variable rate indebtedness outstanding may fluctuate significantly.
As of December 31, 2024, based upon the amount of our variable rate debt outstanding, our annual after-tax earnings would decrease by approximately $32 for each one percentage point increase in the interest rates applicable to our variable rate debt. The amount of variable rate indebtedness outstanding may fluctuate significantly.
As of December 31, 2023, we had an aggregate of $3.6 billion of indebtedness that bears interest at variable rates, comprised of borrowings under the ABL, accounts receivable securitization, term loan and repurchase facilities. See note 12 to our consolidated financial statements for the amounts outstanding, and the interest rates thereon, as of December 31, 2023 under these facilities.
As of December 31, 2024, we had an aggregate of $4.3 billion of indebtedness that bears interest at variable rates, comprised of borrowings under the ABL, accounts receivable securitization and term loan facilities. See note 12 to our consolidated financial statements for the amounts outstanding, and the interest rates thereon, as of December 31, 2024 under these facilities.
For additional information concerning the terms of our variable rate debt, see note 12 to our consolidated financial statements. At December 31, 2023, we had an aggregate of $7.9 billion of indebtedness that bears interest at fixed rates.
For additional information concerning the terms of our variable rate debt, see note 12 to our consolidated financial statements. At December 31, 2024, we had an aggregate of $9.1 billion of indebtedness that bears interest at fixed rates.
During the year ended December 31, 2023, our foreign subsidiaries accounted for $1.269 billion, or 9 percent, of our total revenue of $14.332 billion, and $285, or 9 percent, of our total pretax income of $3.211 billion.
Currency Exchange Risk . We primarily operate in the U.S. and Canada, and have a smaller presence in Europe, Australia and New Zealand. During the year ended December 31, 2024, our foreign subsidiaries accounted for $1.354 billion, or 9 percent, of our total revenue of $15.345 billion, and $232, or 7 percent, of our total pretax income of $3.388 billion.
Removed
For additional information concerning the fair value and terms of our fixed rate debt, see note 11 (see “Fair Value of Financial Instruments”) and note 12 to our consolidated financial statements. Currency Exchange Risk . We primarily operate in the U.S. and Canada, and have a limited presence in Europe, Australia and New Zealand.

Other URI 10-K year-over-year comparisons