UNITED RENTALS, INC.URI
UNITED RENTALS, INC. Leases Disclosure
Leases
As discussed in note 3 to the consolidated financial statements, most of our equipment rental revenue is accounted for as lease revenue under Topic 842 (such revenue represented 77 percent of our total revenues for the year ended December 31,
2025). See note 3 for a discussion of our revenue accounting (such discussion includes lessor disclosures required under Topic 842).
We determine if an arrangement is a lease at inception. Our material lease contracts are generally for real estate or vehicles, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. We lease real estate and equipment under operating leases. We lease a significant portion of our branch locations, and also lease other premises used for purposes such as district and regional offices and service centers. Our finance lease obligations consist primarily of rental equipment (primarily vehicles) and building leases.
Operating leases result in the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options, at our sole discretion, to extend or terminate the lease that we are reasonably certain to exercise. The amount of payments associated with such options reflected in the “Maturity of lease liabilities” table below is not material. Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. Lease expense is recognized on a straight-line basis over the lease term.
Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense on such leases is recognized on a straight-line basis over the lease term. The primary leases we enter into with initial terms of 12 months or less are for equipment that we rent from vendors and then rent to our customers. We generate sublease revenue from such leases that we refer to as “re-rent revenue” as discussed in note 3 to the consolidated financial statements. Apart from the re-rent revenue discussed in note 3, we do not generate material sublease income.
We have lease agreements with lease and non-lease components, and, for our real estate operating leases, we account for the lease and non-lease components as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The tables below present financial information associated with our leases as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023.
| Classification | December 31, 2025 | December 31, 2024 | ||||||||||||
| Assets | ||||||||||||||
| Operating lease assets | Operating lease right-of-use assets | $ | 1,395 | $ | 1,337 | |||||||||
| Finance lease assets | Rental equipment | 597 | 493 | |||||||||||
| Less accumulated depreciation | (161) | (141) | ||||||||||||
| Rental equipment, net | 436 | 352 | ||||||||||||
| Property and equipment, net: | ||||||||||||||
| Non-rental vehicles | 4 | 11 | ||||||||||||
| Buildings | 85 | 71 | ||||||||||||
| Less accumulated depreciation and amortization | (33) | (33) | ||||||||||||
| Property and equipment, net | 56 | 49 | ||||||||||||
| Total leased assets | 1,887 | 1,738 | ||||||||||||
| Liabilities | ||||||||||||||
| Current | ||||||||||||||
| Operating | 317 | 294 | ||||||||||||
| Finance | 108 | 83 | ||||||||||||
| Long-term | ||||||||||||||
| Operating | Operating lease liabilities | 1,124 | 1,089 | |||||||||||
| Finance | 223 | 180 | ||||||||||||
| Total lease liabilities | $ | 1,772 | $ | 1,646 | ||||||||||
| Lease cost | Classification | Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||||||||
| Operating lease cost (1) | Cost of equipment rentals, excluding depreciation (1) | $ | 720 | $ | 647 | $ | 582 | |||||||||||||
| Selling, general and administrative expenses | 15 | 14 | 12 | |||||||||||||||||
| Restructuring charge (2) | 1 | 3 | 27 | |||||||||||||||||
| Finance lease cost | ||||||||||||||||||||
| Amortization of leased assets | Depreciation of rental equipment | 53 | 46 | 36 | ||||||||||||||||
| Non-rental depreciation and amortization | 1 | 1 | 2 | |||||||||||||||||
| Interest on lease liabilities | Interest expense, net | 17 | 12 | 8 | ||||||||||||||||
| Sublease income (3) | (275) | (258) | (233) | |||||||||||||||||
| Net lease cost | $ | 532 | $ | 465 | $ | 434 | ||||||||||||||
_________________
(1) Includes variable lease costs, which are immaterial. Cost of equipment rentals, excluding depreciation for the years ended December 31, 2025, 2024 and 2023 includes $233, $222 and $209, respectively, of short-term lease costs associated with equipment that we rent from vendors and then rent to our customers, as discussed further above. Apart from these costs, short-term lease costs are immaterial.
(2) The amounts above primarily reflect charges associated with a restructuring program initiated following the closing of the Ahern Rentals acquisition.
(3) Primarily reflects re-rent revenue as discussed further above.
| Maturity of lease liabilities (as of December 31, 2025) | Operating leases (1) | Finance leases (2) | |||||||||
| 2026 | $ | 379 | $ | 119 | |||||||
| 2027 | 333 | 103 | |||||||||
| 2028 | 280 | 73 | |||||||||
| 2029 | 221 | 32 | |||||||||
| 2030 | 151 | 7 | |||||||||
| Thereafter | 297 | 47 | |||||||||
| Total | 1,661 | 381 | |||||||||
| Less amount representing interest | (220) | (50) | |||||||||
| Present value of lease liabilities | $ | 1,441 | $ | 331 | |||||||
_________________
(1) Reflects payments for non-cancelable operating leases with initial or remaining terms of one year or more as of December 31, 2025. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
(2) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
| Lease term and discount rate | December 31, 2025 | December 31, 2024 | |||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Operating leases | 6.4 | 5.8 | |||||||||
| Finance leases | 5.0 | 5.8 | |||||||||
| Weighted-average discount rate | |||||||||||
| Operating leases | 4.8 | % | 4.6 | % | |||||||
| Finance leases | 4.8 | % | 4.8 | % | |||||||
| Other information | Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||||||||||||
| Operating cash flows from operating leases | $ | 371 | $ | 328 | $ | 304 | |||||||||||
| Operating cash flows from finance leases | 17 | 12 | 8 | ||||||||||||||
| Financing cash flows from finance leases | 100 | 79 | 64 | ||||||||||||||
| Leased assets obtained in exchange for new operating lease liabilities | 374 | 535 | 538 | ||||||||||||||
| Leased assets obtained in exchange for new finance lease liabilities | $ | 167 | $ | 153 | $ | 132 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 28, 2026 | Showing above |
| 2024 | Jan 29, 2025 | |
| 2023 | Jan 24, 2024 | |
| 2022 | Jan 25, 2023 | |
| 2021 | Jan 26, 2022 | |
| 2020 | Jan 27, 2021 | |
| 2019 | Jan 29, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.