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What changed in HERC HOLDINGS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HERC HOLDINGS INC'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.

+88 added−91 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-13)

Top changes in HERC HOLDINGS INC's 2024 10-K

88 paragraphs added · 91 removed · 80 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeChanges in and Disagreements with Accountants on Accounting and Financial Disclosures 79 ITEM 9A. Controls and Procedures 79
Biggest changeChanges in and Disagreements with Accountants on Accounting and Financial Disclosures 80 ITEM 9A. Controls and Procedures 80 ITEM 9B. Other Information 80 ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 80 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 81

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile the U.S. federal government declared that the COVID-19 public health emergency has ended and begun shifting toward becoming more endemic in the U.S., the extent of the impact of COVID-19 on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, including the duration and spread of COVID-19 and related restrictions on economic activity, all of which are uncertain and cannot be predicted.
Biggest changeThe extent of the impact of any epidemic, pandemic, or contagious disease on our operational and financial performance, including our ability to execute our business strategies and initiatives in an expected time frame, will depend on, among other things, the duration and spread of the epidemic, pandemic, or contagious disease and any restrictions on economic activity imposed by governmental authorities, all of which are uncertain and cannot be predicted.
RISK FACTORS (continued) If we were to experience a significant decrease in orders or an increase in order delays or cancellations that can result from the aforementioned economic conditions or other factors beyond our control, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we were to experience a significant decrease in orders or an increase in order delays or cancellations that can result from the aforementioned economic conditions or other factors beyond our control, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Should such laws and regulations become effective, demand for our services could be affected, our fleet and/or other costs could increase and our business could be materially adversely affected. Further, investors are placing a greater emphasis on non-financial factors, including ESG factors, when evaluating investment opportunities.
Should such laws and regulations become effective, demand for our services could be affected, our fleet and/or other costs could increase and our business could be materially adversely affected. Further, investors are placing a greater emphasis on non-financial factors, including environmental, social and governance ("ESG") factors, when evaluating investment opportunities.
Our business depends on our ability to maintain positive relations with our key national account customers, which collectively accounted for 44% of our rental revenue in 2023. We cannot assure you that all of these relationships will continue at current levels or on current terms. Our contracts with our customers generally do not obligate them to rent equipment from us.
Our business depends on our ability to maintain positive relations with our key national account customers, which collectively accounted for 45% of our rental revenue in 2024. We cannot assure you that all of these relationships will continue at current levels or on current terms. Our contracts with our customers generally do not obligate them to rent equipment from us.
As of December 31, 2023, we had unutilized U.S. federal net operating loss carryforwards of approximately $436 million. Our ability to use such tax attributes to offset future taxable income and tax liabilities may be significantly limited if we experience an "ownership change" as defined in Section 382(g) of the Code.
As of December 31, 2024, we had unutilized U.S. federal net operating loss carryforwards of approximately $136 million. Our ability to use such tax attributes to offset future taxable income and tax liabilities may be significantly limited if we experience an "ownership change" as defined in Section 382(g) of the Code.
As of December 31, 2023, there were 28.2 million shares of our common stock outstanding, which are freely transferable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), unless held or acquired by our “affiliates” as that term is defined in Rule 144 under the Securities Act.
As of December 31, 2024, there were 28.4 million shares of our common stock outstanding, which are freely transferable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), unless held or acquired by our “affiliates” as that term is defined in Rule 144 under the Securities Act.
A widespread outbreak of epidemic, pandemic, or contagious diseases in the human population, including the COVID-19 pandemic, could cause a widespread public health crisis that results in economic and trade disruptions that could negatively impact our business and the businesses of our customers.
A widespread outbreak of epidemic, pandemic, or contagious diseases in the human population could cause a widespread public health crisis that results in economic and trade disruptions that could negatively impact our business and the businesses of our customers.
As our rental equipment ages, the cost of maintaining such equipment, if not replaced within a certain period of time, and the risk of fleet equipment being out of service, generally increase. As of December 31, 2023, the average age of our rental equipment fleet was approximately 45 months.
As our rental equipment ages, the cost of maintaining such equipment, if not replaced within a certain period of time, and the risk of fleet equipment being out of service, generally increase. As of December 31, 2024, the average age of our rental equipment fleet was approximately 46 months.
As of December 31, 2023 and 2022, the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in the Company's consolidated balance sheets in "Accrued liabilities" were $0.4 million.
As of December 31, 2024 and 2023, the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in the Company's consolidated balance sheets in "Accrued liabilities" were $0.5 million and $0.4 million, respectively.
Labor contracts covering the terms of employment of approximately 590 employees in the U.S. and 110 employees in Canada were in effect as of December 31, 2023 under approximately 25 active contracts with local unions, affiliated primarily with the International Brotherhood of Teamsters and the International Union of Operating Engineers. These contracts are renegotiated periodically.
Labor contracts covering the terms of employment of approximately 620 employees in the U.S. and 90 employees in Canada were in effect as of December 31, 2024 under approximately 28 active contracts with local unions, affiliated primarily with the International Brotherhood of Teamsters and the International Union of Operating Engineers. These contracts are renegotiated periodically.
As of December 31, 2023, we had total outstanding debt of approximately $3.7 billion, including our outstanding senior notes and the amounts drawn under our credit facilities.
As of December 31, 2024, we had total outstanding debt of approximately $4.1 billion, including our outstanding senior notes and the amounts drawn under our credit facilities.
The following factors, among others, may cause weakness in our markets, either temporarily or long-term: • a decrease in the expected levels of rental versus ownership of equipment; • government regulations and policies, including government initiatives for infrastructure improvements or expansions, or the policies of governments regarding exploration for, and production and development of, oil and natural gas reserves; • a prolonged or recurring shutdown of the U.S. and Canadian federal, state, provincial and local governments; • an increase in the cost of construction materials; • the level of supply and demand and relative prices or anticipated prices for oil and natural gas; • an overcapacity of fleet in the equipment rental industry; • a lack of availability of credit; • an increase in interest rates; • labor strikes, work stoppages or other labor disruption in one or more markets we serve; and • terrorism or hostilities involving the United States or Canada.
The following factors, among others, may cause weakness in our markets, either temporarily or long-term: • a decrease in the expected levels of rental versus ownership of equipment; • government regulations and policies, including government initiatives for infrastructure improvements or expansions, or the policies of governments regarding exploration for, and production and development of, oil and natural gas reserves; • a prolonged or recurring shutdown of the U.S. and Canadian federal, state, provincial and local governments; • an increase in the cost of construction materials; • the level of supply and demand and relative prices or anticipated prices for oil and natural gas; • an overcapacity of fleet in the equipment rental industry; • a lack of availability of credit; • an increase in interest rates; • the imposition of tariffs or other measures that create barriers to or increase the costs associated with international trade; • labor strikes, work stoppages or other labor disruption in one or more markets we serve; • geopolitical events, including natural disasters, disruptions to markets due to war or armed conflict; and 9 Table of Contents HERC HOLDINGS INC.
Additionally, some of our customers may delay capital investment and maintenance even when favorable conditions exist in their industries or markets. 9 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM lA.
AND SUBSIDIARIES ITEM lA. RISK FACTORS (continued) • terrorism or hostilities involving the United States or Canada. Additionally, some of our customers may delay capital investment and maintenance even when favorable conditions exist in their industries or markets.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee periodically receives presentations and reports on cybersecurity risks on a wide range of topics including recent developments, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations.
Biggest changeThe Board periodically receives presentations and reports on cybersecurity risks on a wide range of topics including recent developments, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations. The Board also receives reports regarding cybersecurity incidents that meet established reporting thresholds through the process described above, as well as updates regarding any such incident.
The cybersecurity crisis management team is responsible for communication of significant incidents to the Audit Committee and provides updates to the Audit Committee through incident resolution. Materiality of incidents are evaluated and determined by our cyber incident disclosure committee that includes certain cybersecurity crisis management team members and which may receive input from relevant stakeholders.
The cybersecurity crisis management team is responsible for communication of significant incidents to the Board and provides updates to the Board through incident resolution. Materiality of incidents are evaluated and determined by our cyber incident disclosure committee that includes certain cybersecurity crisis management team members and which may receive input from relevant stakeholders.
The Audit Committee periodically receives updates regarding our cybersecurity program through meetings with and reports from our CIO and CISO (or their designees). Our management team has established a cybersecurity crisis management team, led by our CIO and CISO, that includes other members of management depending on the origin, severity and other factors related to any cybersecurity incident identified.
The Board periodically receives updates regarding our cybersecurity program through meetings with and reports from our CIO and CISO (or their designees). Our management team has established a cybersecurity crisis management team, led by our CIO and CISO, that includes other members of management depending on the origin, severity and other factors related to any cybersecurity incident identified.
Depending on the threat or incident level, the CISO will engage the cybersecurity crisis management team and the cyber incident disclosure committee to determine proper escalation with significant incidents being reported to the Audit Committee.
Depending on the threat or incident level, the CISO will engage the cybersecurity crisis management team and the cyber incident disclosure committee to determine proper escalation with significant incidents being reported to the Board.
On occasion, we use third parties (such as outside counsel, information security consultants, and software providers) to assist in these assessment and testing exercises. 21 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES Governance The Audit Committee of the Board of Directors oversees our cybersecurity program and management of the associated risks.
On occasion, we use third parties (such as outside counsel, information security consultants, and software providers) to assist in these assessment and testing exercises. 21 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES Governance In 2024, the Board of Directors assumed direct oversight of our cybersecurity program and management of the associated risks.
Our ERM program is led by the Senior Director of Internal Audit and our ERM Committee, which is comprised of members of senior management, including our Chief Executive Officer, Chief Financial Officer, Chief Information Officer ("CIO"), Chief Information Security Officer ("CISO") and Chief Legal Officer.
Our ERM program is led by the Vice President of Internal Audit and our ERM Committee, which is comprised of members of senior management, including our CEO, Chief Financial Officer, Chief Information Officer ("CIO"), Chief Information Security Officer ("CISO") and Chief Legal Officer.
Risk Management and Strategy As one of the critical elements of our overall ERM approach, our cybersecurity program is focused on the following key areas: Governance— The Audit Committee of the Board of Directors oversees our cybersecurity program and management of the associated risks.
Risk Management and Strategy As one of the critical elements of our overall ERM approach, our cybersecurity program is focused on the following key areas: Governance— In 2024, the Board of Directors (the "Board") assumed direct oversight of our cybersecurity program and management of the associated risks.
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The Board and the Audit Committee also receive reports regarding cybersecurity incidents that meet established reporting thresholds through the process described above, as well as updates regarding any such incident.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of February 9, 2024, we had 400 locations in the United States and Canada. We also operate regional headquarters, sales offices and service facilities in the foregoing countries in support of our equipment rental operations. Our principal executive offices are located in Bonita Springs, Florida.
Biggest changeITEM 2. PROPERTIES As of February 7, 2025, we had 453 locations in the United States and Canada. We also operate regional headquarters, sales offices and service facilities in the foregoing countries in support of our equipment rental operations. Our principal executive offices are located in Bonita Springs, Florida.
As of December 31, 2023, we owned approximately 6% of the locations from which we operate our equipment rental business, with the remainder leased. Those leases are typically triple net leases, where Herc is responsible for the ongoing expenses of the property, including real estate taxes, insurance, and maintenance, in addition to paying rent and utilities.
As of December 31, 2024, we owned approximately 5% of the locations from which we operate our equipment rental business, with the remainder leased. Those leases are typically triple net leases, where Herc is responsible for the ongoing expenses of the property, including real estate taxes, insurance, and maintenance, in addition to paying rent and utilities.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeName Age Position Lawrence H. Silber 67 President and Chief Executive Officer, Director Mark Humphrey 52 Senior Vice President and Chief Financial Officer Aaron D. Birnbaum 58 Senior Vice President and Chief Operating Officer Christian J. Cunningham 62 Senior Vice President and Chief Human Resources Officer Tamir Peres 54 Senior Vice President and Chief Information Officer S.
Biggest changeName Age Position Lawrence H. Silber 68 President and Chief Executive Officer, Director Mark Humphrey 53 Senior Vice President and Chief Financial Officer Aaron D. Birnbaum 59 Senior Vice President and Chief Operating Officer Christian J. Cunningham 63 Senior Vice President and Chief Human Resources Officer Tamir Peres 55 Senior Vice President and Chief Information Officer S.
Wade Sheek 47 Senior Vice President, Chief Legal Officer and Secretary Lawrence H. Silber. Mr. Silber joined the Company in May 2015. Prior to that, Mr.
Wade Sheek 48 Senior Vice President, Chief Legal Officer and Secretary Lawrence H. Silber. Mr. Silber joined the Company in May 2015. Prior to that, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRitchie Bros Auctioneers Inc. The graph assumes that $100 was invested on December 31, 2018 over the indicated time periods and assumes reinvestment of all dividends, if any, paid on the securities. The cumulative total return calculation for Herc Holdings is based on stock price appreciation and payment of cash dividends.
Biggest changeMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued) The graph assumes that $100 was invested on December 31, 2019 over the indicated time periods and assumes reinvestment of all dividends, if any, paid on the securities.
Recent Performance The following graph compares the cumulative total stockholder return on Herc Holdings common stock from December 31, 2018 through December 31, 2023, with the cumulative total returns of the Standard & Poor's Mid Cap 400 Trading Companies & Distributors Industry Index, our 2023 industry peer group and our 2022 industry peer group.
Recent Performance The following graph compares the cumulative total stockholder return on Herc Holdings common stock from December 31, 2019 through December 31, 2024, with the cumulative total returns of the Standard & Poor's Mid Cap 400 Trading Companies & Distributors Industry Index, and our industry peer group.
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Registered Holders Our common stock trades on the New York Stock Exchange ("NYSE") under the symbol "HRI". On February 9, 2024, there were 1,672 registered holders of our common stock.
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock and Registered Holders Our common stock trades on the New York Stock Exchange ("NYSE") under the symbol "HRI". On February 7, 2025, there were 1,793 registered holders of our common stock.
The agreements governing our indebtedness restrict our ability to pay dividends. See Item 7, "Management Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Dividends," in this Report.
See Item 7, "Management Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Dividends," in this Report.
The stock price performance shown on the graph is not necessarily indicative of future price performance.
The cumulative total return calculation for Herc Holdings is based on stock price appreciation and payment of cash dividends. The stock price performance shown on the graph is not necessarily indicative of future price performance.
The 2023 industry peer group is comprised of publicly traded companies participating in the equipment rental industry and other relevant companies of comparable size in the broader industry in which we compete.
Our industry peer group is comprised of publicly traded companies participating in the equipment rental industry and other relevant companies of comparable size in the broader industry in which we compete. Our industry peer group includes: Air Lease Corporation H&E Equipment Services Trinity Industries, Inc. Ashtead Group plc McGrath Rentcorp Triton International Ltd. Custom Truck One Source Inc. Pool Corp.
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The following table provides information about our repurchases of our common stock during the fourth quarter of 2023: Period Total Number of Shares Purchased Average Price Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Program October 1, 2023 to October 31, 2023 119,392 $ 106.84 119,392 November 1, 2023 to November 30, 2023 — — — December 1, 2023 to December 31, 2023 — — — Total 119,392 $ 106.84 119,392 $ 161,497,321 Dividends On February 7, 2024, the Company declared a quarterly dividend of $0.665 per share to record holders as of February 21, 2024, with payment date of March 7, 2024.
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There were no share repurchases during the year ended December 31, 2024. As of December 31, 2024, the approximate dollar value that remains available for share purchases under the Share Repurchase Program is $161 million.
Removed
The 2023 industry peer group includes the removal of six companies and addition seven companies as compared to the 2022 industry peer group in order to reflect changing market conditions, our growth and to place us near the median in revenue and market capitalization. 24 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 5.
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Dividends On December 6, 2024, the Company declared a quarterly dividend of $0.665 per share to record holders as of December 16, 2024, with payment date of December 27, 2024. The agreements governing our indebtedness restrict our ability to pay dividends.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued) Our 2023 industry peer group includes: Air Lease Corporation H&E Equipment Services Trinity Industries, Inc. Ashtead Group plc McGrath Rentcorp Triton International Ltd. Custom Truck One Source Inc. Pool Corp. United Rentals, Inc. Fastenal Company Ritchie Bros Auctioneers Inc. WillScot Mobile Mini Holdings Corp.
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United Rentals, Inc. Fastenal Company Ritchie Bros Auctioneers Inc. WillScot Mobile Mini Holdings Corp. Federal Signal Corporation Rush Enterprises, Inc. Xylem Inc. GATX Corp. Terex Corporation 24 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 5.
Removed
Federal Signal Corporation Rush Enterprises, Inc. Xylem Inc. GATX Corp. Terex Corporation Our 2022 industry peer group includes: Agrekko H&E Equipment Services Triton International Ltd. Applied Industrial Tech Inc. KAR Auction Services Inc. United Rentals, Inc. Ashtead Group plc McGrath Rentcorp Watsco Inc. Beacon Roofing Supply, Inc. NOW Inc. WillScot Mobile Mini Holdings Corp. Fastenal Company Pool Corp. GATX Corp.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeAs part of our capital allocation strategy, we have continued to pay quarterly dividends at $0.6325 per share throughout 2023 and also repurchased approximately 1.1 million shares of our common stock for $120 million. During the fourth quarter, we announced our plans to explore strategic alternatives for our Cinelease studio entertainment and lighting and grip equipment rental business.
Biggest changeDuring the fourth quarter of 2023, we announced our plans to explore strategic alternatives for our Cinelease studio entertainment and lighting and grip equipment rental business ("Cinelease") and the Cinelease net assets were classified as assets held for sale.
AND SUBSIDIARIES ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) 2023 Overview Our results for 2023 reflect the strong demand in the rental industry as demonstrated by our equipment rental revenues of $2.9 billion, an increase of 12% over 2022, reflecting positive pricing of 6.9% and increased volume of equipment on rent of 14.8%.
AND SUBSIDIARIES ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) 2024 Overview Our results for 2024 reflect the continued strength in the rental industry as demonstrated by our equipment rental revenues of $3.2 billion, an increase of 11% over 2023, reflecting positive pricing of 3.2% and increased volume of equipment on rent of 9.3%.
We invested significantly in our rental equipment as part of our long-term capital expenditure plans, adding rental equipment in high growth markets in response to customer demand and to position ourselves for growth into 2024. Additionally, during 2023, we completed 12 acquisitions, adding 21 branches, totaling a net cash outflow of $430 million, while also opening 21 new greenfield locations.
We invested in our rental equipment as part of our long-term capital expenditure plans, adding rental equipment strategically throughout our network in response to customer demand and to position ourselves for growth into 2025. Additionally, during 2024, we completed 9 acquisitions, adding 28 branches, totaling a net cash outflow of $600 million, while also opening 23 new greenfield locations.
Our local markets and industries have shown continued strength in economic activity and we believe the operating environment continues to be favorable for equipment rental companies of scale. We continued to execute on company-wide initiatives to increase our margins and profitability, resulting in an increase in net income to $347 million from $330 million in 2022.
While our local markets have been impacted by the elevated interest rate environment, our diversification across industries and project types have shown continued strength in economic activity and we believe the operating environment continues to be favorable for equipment rental companies of scale. We continued to execute on company-wide initiatives to increase margins and utilization.
The addition of new locations supports our long-term strategy to achieve greater density and scale in select urban markets across North America to better serve both our local and national customers. Supporting our financial flexibility and continued investment in our business, our senior secured asset-based revolving credit facility has over $1.4 billion of availability at the end of 2023.
The addition of new locations supports our long-term strategy to achieve greater density and scale in select urban markets across North America to better serve both our local and national customers.
Additionally, we amended and extended our account receivable securitization facility, which now matures August 31, 2024 and increased the aggregate commitments from $335 million to $370 million.
Additionally, we amended and extended our account receivable securitization facility, which now matures August 31, 2025 and increased the aggregate commitments from $370 million to $400 million. As part of our capital allocation strategy, we have continued to pay quarterly dividends at $0.665 per share throughout 2024.
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The film and studio entertainment industry has shifted to a studio centric model where owning or managing a large footprint of studios is becoming more important to be a competitive equipment rental provider, requiring significant investment in fully managed studios. This business model is a departure from our stated growth strategy.
Added
Supporting our financial flexibility and continued investment in our business, we issued $800 million of aggregate principal amount of 6.625% senior unsecured notes due 2029, paying down a portion of our senior secured asset-based revolving credit facility allowing for over $1.8 billion of availability at the end of 2024.
Removed
We will continue to provide equipment rentals, other than lighting and grip equipment, to the film and entertainment industry through Herc Entertainment Services, which includes aerial equipment, forklifts, carts, generators and climate solutions. 27 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES
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Cinelease continues to be actively marketed for sale and management expects a transaction to be completed in 2025. 27 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES

Item 7. Management's Discussion & Analysis

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

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Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS Year Ended December 31, ($ in millions) 2023 2022 $ Change % Change Equipment rental $ 2,870 $ 2,552 $ 318 12 % Sales of rental equipment 346 125 221 177 % Sales of new equipment, parts and supplies 38 36 2 6 % Service and other revenue 28 27 1 4 % Total revenues 3,282 2,740 542 20 % Direct operating 1,139 1,029 110 11 % Depreciation of rental equipment 643 536 107 20 % Cost of sales of rental equipment 252 89 163 183 % Cost of sales of new equipment, parts and supplies 25 21 4 19 % Selling, general and administrative 448 411 37 9 % Non-rental depreciation and amortization 112 95 17 18 % Interest expense, net 224 122 102 84 % Other expense (income), net (8) 3 (11) NM Income before income taxes 447 434 13 3 % Income tax provision (100) (104) 4 (4) % Net income $ 347 $ 330 $ 17 5 % NM - Not meaningful Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Equipment rental revenue increased $318 million, or 12%, during the year ended of 2023 primarily due to higher volume of equipment on rent of 14.8% and pricing growth of 6.9% over the same period in the prior year, partially offset by a decline in re-rent revenue and a reduction year-over-year in the studio entertainment business as a result of labor disruptions in the film and television industry.
Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS Years Ended December 31, ($ in millions) 2024 2023 $ Change % Change Equipment rental $ 3,189 $ 2,870 $ 319 11 % Sales of rental equipment 311 346 (35) (10) % Sales of new equipment, parts and supplies 37 38 (1) (3) % Service and other revenue 31 28 3 11 % Total revenues 3,568 3,282 286 9 % Direct operating 1,291 1,139 152 13 % Depreciation of rental equipment 679 643 36 6 % Cost of sales of rental equipment 224 252 (28) (11) % Cost of sales of new equipment, parts and supplies 24 25 (1) (4) % Selling, general and administrative 480 448 32 7 % Non-rental depreciation and amortization 127 112 15 13 % Interest expense, net 260 224 36 16 % Loss on assets held for sale 194 — 194 — % Other expense (income), net (2) (8) 6 (75) % Income before income taxes 291 447 (156) (35) % Income tax provision (80) (100) 20 (20) % Net income $ 211 $ 347 $ (136) (39) % Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Equipment rental revenue increased $319 million, or 11%, during the year ended 2024 primarily due to higher volume of equipment on rent of 9.3% and pricing growth of 3.2% over the same period in the prior year.
Under the terms of our ABL Credit Facility, our AR Facility and our 2027 Notes, we are not subject to ongoing financial maintenance covenants; however, under the ABL Credit Facility, failure to maintain certain levels of liquidity will subject us to a contractually specified fixed charge coverage ratio of not less than 1:1 for the four quarters most recently ended.
Under the terms of our ABL Credit Facility, our AR Facility and our Notes, we are not subject to ongoing financial maintenance covenants; however, under the ABL Credit Facility, failure to maintain certain levels of liquidity will subject us to a contractually specified fixed charge coverage ratio of not less than 1:1 for the four quarters most recently ended.
For further information on the terms of our 2027 Notes, ABL Credit Facility and AR Facility see Note 11, "Debt" included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Report.
For further information on the terms of our Notes, ABL Credit Facility and AR Facility see Note 11, "Debt" included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Report.
Covenants Our ABL Credit Facility, our AR Facility and our 2027 Notes contain a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain indebtedness, make certain restricted payments (including paying dividends, redeeming stock or making other distributions), create liens, make investments, make acquisitions, engage in mergers, fundamentally change the nature of our business, make capital expenditures, or engage in certain transactions with certain affiliates.
Covenants Our ABL Credit Facility, our AR Facility and our 2027 and 2029 Notes (collectively, the "Notes") contain a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain indebtedness, make certain restricted payments (including paying dividends, redeeming stock or making other distributions), create liens, make investments, make acquisitions, engage in mergers, fundamentally change the nature of our business, make capital expenditures, or engage in certain transactions with certain affiliates.
The increase was related to improved operating results primarily resulting from higher revenues coupled with improved operating leverage on costs, collection of receivables and the timing of payments on accounts payable. 29 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
The increase was related to improved operating results primarily resulting from higher revenues coupled with improved operating leverage on costs, collection of receivables and the timing of payments on accounts payable and accrued liabilities. 29 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
As a result of this ongoing assessment, we make periodic adjustments to depreciation rates of rental equipment in response to changing market conditions. During the years ended December 31, 2023 and 2022, there were no material adjustments to our depreciation rates.
As a result of this ongoing assessment, we make periodic adjustments to depreciation rates of rental equipment in response to changing market conditions. During the years ended December 31, 2024 and 2023, there were no material adjustments to our depreciation rates.
As of December 31, 2023, the appropriate levels of liquidity have been maintained, therefore this financial maintenance covenant is not applicable. At December 31, 2023, Herc Holdings' balance sheet was substantially identical to that of Herc, with the exception of the debt held by Herc Holdings (2027 Notes and ABL Credit Facility) and certain components of shareholders equity.
As of December 31, 2024, the appropriate levels of liquidity have been maintained, therefore this financial maintenance covenant is not applicable. At December 31, 2024, Herc Holdings' balance sheet was substantially identical to that of Herc, with the exception of the debt held by Herc Holdings (2029 Notes, 2027 Notes and ABL Credit Facility) and certain components of shareholders equity.
To the extent that the useful lives of all of our rental equipment were to increase or decrease by one year, we estimate that our annual depreciation expense would decrease or increase by approximately $60 million or $80 million, respectively.
To the extent that the useful lives of all of our rental equipment were to increase or decrease by one year, we estimate that our annual depreciation expense would decrease or increase by approximately $60 million or $75 million, respectively.
Selling, general and administrative expenses were 15.6% of equipment rental revenue in 2023 compared to 16.1% in the prior-year period due to continued focus on improving operating leverage while expanding revenues. 28 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
Selling, general and administrative expenses were 15.1% of equipment rental revenue in 2024 compared to 15.6% in the prior-year period due to continued focus on improving operating leverage while expanding revenues. 28 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
In connection with our impairment analysis for goodwill and indefinite-lived intangible assets conducted as of October 1, 2023, we assessed qualitative factors as described above to determine if it is more likely than not that goodwill and indefinite-lived assets may be impaired and concluded that there was no impairment related to such assets.
In connection with our impairment analysis for goodwill and indefinite-lived intangible assets conducted as of October 1, 2024, we assessed qualitative factors as described above to determine if it is more likely than not that goodwill and indefinite-lived assets may be impaired and concluded that there was no impairment related to such assets at such date.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Investing Activities Cash used in investing activities decreased $101 million during 2023 when compared with the prior-year period. Our primary use of cash in investing activities is for the acquisition of rental equipment, non-rental capital expenditures and acquisitions.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Investing Activities Cash used in investing activities decreased $70 million during 2024 when compared with the prior-year period. Our primary use of cash in investing activities is for the acquisition of rental equipment, non-rental capital expenditures and acquisitions.
See Note 11, "Debt" included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Report for more information. As of December 31, 2023, $27 million of standby letters of credit were issued and outstanding, none of which have been drawn upon.
See Note 11, "Debt" included in Part II, Item 8 "Financial Statements and Supplementary Data" of this Report for more information. As of December 31, 2024, $34 million of standby letters of credit were issued and outstanding, none of which have been drawn upon.
The ABL Credit Facility had $223 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.
The ABL Credit Facility had $216 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.
For the year ended December 30, 2023 and 2022, the statements of operations of Herc Holdings and Herc were identical with the exception of interest expense on the debt held at Herc Holdings that is not reflected in the statement of operations of Herc.
For the year ended December 31, 2024 and 2023, the statements of operations of Herc Holdings and Herc were identical with the exception of interest expense on the debt held at Herc Holdings that is not reflected in the statement of operations of Herc.
Rental Equipment Our principal assets are rental equipment, which represented 54.3% and 58.5% of our total assets as of December 31, 2023 and 2022, respectively. Rental equipment consists of equipment utilized in our equipment rental operations. When rental equipment is acquired, we use historical experience, industry residual value guidebooks and the monitoring of market conditions to set depreciation rates.
Rental Equipment Our principal assets are rental equipment, which represented 53.6% and 54.3% of our total assets as of December 31, 2024 and 2023, respectively. Rental equipment consists of equipment utilized in our equipment rental operations. When rental equipment is acquired, we use historical experience, industry residual value guidebooks and the monitoring of market conditions to set depreciation rates.
As of December 31, 2023, the following was available to us (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 1,401 $ 1,401 AR Facility 25 — Total $ 1,426 $ 1,401 During the third quarter of 2023, we entered into an amendment to the AR Facility to increase the aggregate commitments from $335 million to $370 million and extend the maturity to August 31, 2024.
As of December 31, 2024, the following was available to us (in millions): Remaining Capacity Availability Under Borrowing Base Limitation ABL Credit Facility $ 1,845 $ 1,845 AR Facility — — Total $ 1,845 $ 1,845 During the third quarter of 2024, we entered into an amendment to the AR Facility to increase the aggregate commitments from $370 million to $400 million and extend the maturity to August 31, 2025.
As of December 31, 2023, we had approximately $3.7 billion of total nominal indebtedness outstanding. Our liquidity as of December 31, 2023 consisted of cash and cash equivalents of $71 million and unused commitments of approximately $1.4 billion under our ABL Credit Facility. See "Borrowing Capacity and Availability" below for further discussion.
As of December 31, 2024, we had approximately $4.1 billion of total nominal indebtedness outstanding. Our liquidity as of December 31, 2024 consisted of cash and cash equivalents of $83 million and unused commitments of approximately $1.8 billion under our ABL Credit Facility. See "Borrowing Capacity and Availability" below for further discussion.
Additionally, we closed on 12 acquisitions during the year ended December 31, 2023 for a net cash outflow of $430 million, compared to cash outflow of $515 million during the year ended December 31, 2022. Financing Activities Cash provided by financing activities decreased $273 million during 2023 when compared with the prior-year.
Additionally, we closed on 9 acquisitions during the year ended December 31, 2024 for a net cash outflow of $600 million, compared to cash outflow of $430 million during the year ended December 31, 2023. Financing Activities Cash provided by financing activities decreased $213 million during 2024 when compared with the prior-year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Dividends On February 7, 2024, we declared a quarterly dividend of $0.665 per share to record holders as of February 21, 2024, with payment date of March 7, 2024.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Dividends On December 6, 2024, we declared a quarterly dividend of $0.665 per share to record holders as of December 16, 2024, with payment date of December 27, 2024.
Years Ended December 31, 2023 2022 Rental equipment expenditures $ 1,320 $ 1,168 Disposals of rental equipment (325) (121) Net rental equipment expenditures $ 995 $ 1,047 Net capital expenditures for rental equipment decreased $52 million during the year ended December 31, 2023 compared to the same period in 2022, as we optimize our fleet by continuing to invest in high growth markets as part of our long-term capital expenditure plans.
Years Ended December 31, 2024 2023 Rental equipment expenditures $ 1,048 $ 1,320 Disposals of rental equipment (288) (325) Net rental equipment expenditures $ 760 $ 995 Net capital expenditures for rental equipment decreased $235 million during the year ended December 31, 2024 compared to the same period in 2023, as we optimize our fleet by continuing to strategically invest in growth markets as part of our long-term capital expenditure plans.
For the expected return on assets assumption, we use a forward-looking rate that is based on the 32 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) expected return for each asset class (including the value added by active investment management), weighted by the target asset allocation.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) rate as of the valuation date. For the expected return on assets assumption, we use a forward-looking rate that is based on the expected return for each asset class (including the value added by active investment management), weighted by the target asset allocation.
The following table summarizes the change in cash and cash equivalents for the periods shown (in millions): Years Ended December 31, 2023 2022 $ Change Cash provided by (used in): Operating activities $ 1,086 $ 917 $ 169 Investing activities (1,581) (1,682) 101 Financing activities 512 785 (273) Effect of exchange rate changes — (1) 1 Net change in cash and cash equivalents $ 17 $ 19 $ (2) Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Operating Activities During the year ended December 31, 2023, we generated $169 million more cash from operating activities compared with the same period in 2022.
The following table summarizes the change in cash and cash equivalents for the periods shown (in millions): Years Ended December 31, 2024 2023 $ Change Cash provided by (used in): Operating activities $ 1,225 $ 1,086 $ 139 Investing activities (1,511) (1,581) 70 Financing activities 299 512 (213) Effect of exchange rate changes (1) — (1) Net change in cash and cash equivalents $ 12 $ 17 $ (5) Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Operating Activities During the year ended December 31, 2024, we generated $139 million more cash from operating activities compared with the same period in 2023.
The discount rate used to value the pension liabilities and related expenses and the expected rate of return on plan assets are the two most significant assumptions impacting pension expense. The discount rate used is a market-based rate as of the valuation date.
The discount rate used to value the pension liabilities and related expenses and the expected rate of return on plan assets are the two most significant assumptions impacting pension expense. The discount rate used is a market-based 32 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Interest expense, net increased $102 million, or 84%, during the year ended of 2023 when compared with the year ended of 2022 due to higher interest rates on floating rate debt and increased borrowings on the ABL Credit Facility primarily to fund acquisition growth and invest in rental equipment.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Interest expense, net increased $36 million, or 16%, during the year ended 2024 when compared with the year ended 2023 due to higher average debt balances primarily to fund acquisition growth and invest in rental equipment.
Our ability to borrow under the Facilities is a function of, among other things, the value of the assets in the relevant collateral pool. We refer to the amount of debt we can borrow given a certain pool of assets as the "Borrowing Base." 30 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
We refer to the amount of debt we can borrow given a certain pool of assets as the "Borrowing Base." 30 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority with full knowledge of all relevant information.
In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing 34 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) authority with full knowledge of all relevant information.
We have assessed the guidance and performed our analysis using our one reporting unit, North American equipment rental.
We have assessed the guidance and performed our analysis using our two reporting units, core equipment rental and Cinelease.
Financing activities primarily represent our changes in debt, which included net borrowings of $740 million on our revolving lines of credit and securitization, which were used primarily to fund acquisitions and invest in rental equipment during the period. Net borrowings in the prior year period were $1 billion.
Borrowings on the ABL Credit Facility were used primarily to fund acquisitions and invest in rental equipment during the period. Net borrowings in the prior year period were $740 million.
Sales of rental equipment increased $221 million, or 177%, during the year ended of 2023 when compared to the year ended of 2022. As supply chain disruptions have begun to ease in certain categories of equipment, we have increased the volume of sales in line with our fleet rotation planning to improve the equipment mix and manage fleet age.
Sales of rental equipment decreased $35 million, or 10%, during the year ended 2024 when compared to the year ended 2023. We continue to sell equipment in line with our fleet rotation planning to improve the equipment mix and manage fleet age.
The rate decrease was driven by a benefit related to stock-based compensation of $12 million in 2023 and $8 million in 2022, certain non-deductible expenses, and return to provision adjustments.
The effective tax rate during 2024 was 27% compared to 22% in 2023. The rate increase was driven by non-deductible goodwill impairment of $14 million in 2024, a reduction in the benefit related to stock-based compensation of $3 million in 2024 compared to $12 million in 2023, and certain other non-deductible expenses.
Direct operating expenses were 39.7% of equipment rental revenue in 2023, compared to 40.3% in the prior-year period, reflecting better cost performance and fixed cost absorption on higher revenue despite increases in (i) personnel-related expenses of $73 million primarily resulting from increased headcount and increased wages and benefits, (ii) maintenance expense of $22 million resulting from our increased fleet size and higher volume in 2023, (iii) facilities expense of $18 million as we have added more locations through acquisitions and opening greenfield locations.
Direct operating expenses were 40.5% of equipment rental revenue in 2024, compared to 39.7% in the prior-year period, reflecting increases in (i) personnel-related expenses of $61 million primarily resulting from increased headcount in support of growth initiatives, including greenfields and acquisitions, (ii) facilities expense of $22 million as we have added more locations through acquisitions and opening greenfield locations, (iii) self insurance reserve increase of $21 million due to claims development attributable to unsettled cases and growth of the business, (iv) maintenance expense of $19 million resulting from our increased fleet size and higher volume in 2024, (v) re-rent expense of $11 million due to the corresponding increase in re-rent revenue, and (vi) delivery expense of $11 million due to increased volume of transactions and transfers of equipment between branches to drive fleet efficiency.
Selling, general and administrative expenses increased $37 million, or 9%. The increase was primarily due to credit and collections expense of $19 million resulting from increased rental revenue and volume of transactions. Selling expense, including commissions and other variable compensation increases, also increased by $8 million.
The increase was primarily due to increases in selling expenses, including commissions and other variable compensation, of $19 million, credit and collection expense of $5 million and general payroll of $4 million.
These assets are primarily amortized using the straight-line method, however, certain assets may be amortized using an accelerated method that reflects the economic benefit to us. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Intangible assets with finite lives are amortized over the estimated economic lives of the assets, which range from five to 14 years. These assets are primarily amortized using the straight-line method, however, certain assets may be amortized using an accelerated method that reflects the economic benefit to us.
Borrowing Capacity and Availability Our ABL Credit Facility and AR Facility (together, the "Facilities") provide our borrowing capacity and availability. Creditors under the Facilities have a claim on specific pools of assets as collateral as identified in each credit agreement.
Creditors under the Facilities have a claim on specific pools of assets as collateral as identified in each credit agreement. Our ability to borrow under the Facilities is a function of, among other things, the value of the assets in the relevant collateral pool.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset.
Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less costs to sell.
Upon determination that a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. 34 Table of Contents HERC HOLDINGS INC. AND SUBSIDIARIES ITEM 7.
Upon determination that a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. We are subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, accruals for tax contingencies are established based on the probable outcomes of such matters.
The margin on sales of rental equipment was 27% in 2023 compared to 29% in 2022. Direct operating expenses increased $110 million, or 11%.
Fleet rotation in the prior year period was accelerated due to easing of supply chain disruptions in certain categories of equipment. The margin on sales of rental equipment was 28% in 2024 compared to 27% in 2023. Direct operating expenses increased $152 million, or 13%.
Increases were partially offset by reduced re-rent expense of $20 million due to the corresponding decrease in re-rent revenue. Depreciation of rental equipment increased $107 million, or 20%, during 2023 due to the increase in average fleet size. Non-rental depreciation and amortization increased $17 million, or 18%, primarily due to amortization of intangible assets related to acquisitions.
Depreciation of rental equipment increased $36 million, or 6%, during 2024 due to the increase in average fleet size. Non-rental depreciation and amortization increased $15 million, or 13%, primarily due to amortization of intangible assets related to acquisitions. Selling, general and administrative expenses increased $32 million, or 7%.
Income tax provision was $100 million during the year ended of 2023 when compared with $104 million for the same period in 2022. The effective tax rate during 2023 was 22% compared to 24% in 2022.
Loss on assets held for sale was $194 million during 2024 to adjust the carrying value of Cinelease net assets to its fair value less estimated costs to sell. Income tax provision was $80 million during the year ended 2024 when compared with $100 million for the same period in 2023.
Disposals have increased in the current year to maintain an appropriate mix of fleet and manage fleet age, while ensuring we have sufficient capacity of equipment to meet customer demand in light of the continuing supply chain constraints in certain equipment categories.
Expenditures and disposals have decreased in the current year to maintain an appropriate mix of fleet and manage fleet age as the supply chain constraints experienced over the last several years have resolved in most equipment categories. Borrowing Capacity and Availability Our ABL Credit Facility and AR Facility (together, the "Facilities") provide our borrowing capacity and availability.
Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less costs to sell. During the years ended December 31, 2022 and 2021, we recorded asset impairment charges of $3.5 million and $3.2 million, respectively. There were no asset impairment charges for the year ended December 31, 2023.
During the year ended December 31, 2024, we recorded an asset impairment charge related to Cinelease of $129 million as discussed further in Note 8, "Assets Held for Sale." In 2023, there were no asset impairment charges and for the year ended December 31, 2022, we recorded asset impairment charges of $3.5 million.
Removed
In accordance with our Share Repurchase Program, we may from time to time repurchase shares in the open market or through privately negotiated transactions, in accordance with applicable securities laws.
Added
Financing activities primarily represent our changes in debt, which included the issuance of $800 million of senior unsecured notes due 2029 which were used to repay a portion of our ABL Credit Facility, resulting in net repayments of $391 million on our revolving lines of credit and securitization.
Removed
We repurchased approximately 1.1 million shares for approximately $120 million during 2023 in accordance with our overall capital allocation strategy and as of December 31, 2023, $161 million remains available for repurchases.
Added
Subsequent to the assessment, it was determined that the goodwill attributable to Cinelease of $65 million was fully impaired as discussed further in Note 8, "Assets Held for Sale." Finite-Lived Intangible and Long-Lived Assets Finite-lived intangible assets include technology, customer relationships, and other intangibles.
Removed
Finite-Lived Intangible and Long-Lived Assets Finite-lived intangible assets include technology, customer relationships, and other intangibles. Intangible assets with finite lives are amortized over the estimated economic lives of the assets, which range from five to 14 years.
Added
Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
Removed
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) We are subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, accruals for tax contingencies are established based on the probable outcomes of such matters.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed9 unchanged
Biggest changeAssuming a hypothetical increase of one percentage point in interest rates on our ABL Credit Facility, AR Facility and cash and cash equivalents as of December 31, 2023, our pre-tax earnings would decrease by an estimated $24 million over a 12-month period.
Biggest changeAssuming a hypothetical increase of one percentage point in interest rates on our ABL Credit Facility, AR Facility and cash and cash equivalents as of December 31, 2024, our pre-tax earnings would decrease by an estimated $19 million over a 12-month period.
During the year ended December 31, 2023, our foreign subsidiaries accounted for less than 10% of our total revenue and total income before income taxes. Based on the size of our foreign operations relative to the Company as a whole, we do not believe that a 10% change in exchange rates would have a material impact on our earnings.
During the year ended December 31, 2024, our foreign subsidiaries accounted for less than 10% of our total revenue and total income before income taxes. Based on the size of our foreign operations relative to the Company as a whole, we do not believe that a 10% change in exchange rates would have a material impact on our earnings.

Other HRI 10-K year-over-year comparisons