INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

For financial reporting purposes, income before income taxes includes the following components (In millions):


	Years Ended December 31,
	2025	2024	2023
United States ..................................................................................	$53	$5	$21
Foreign ...........................................................................................	1	1	–
Income before income taxes ...........................................................	$54	$6	$21

Schedule of components of the provision for income taxes

The components of the provision for income taxes are as follows (In millions):


	Years Ended December 31,
	2025	2024	2023
Current:
Federal .......................................................................................	$(1)	$1	$–
State ...........................................................................................	4	2	–
Total current ..........................................................................	3	3	–
Deferred:
Federal .......................................................................................	13	(1)	3
State ...........................................................................................	(2)	1	1
Total deferred ........................................................................	11	–	4
Total (current and deferred):
Federal .......................................................................................	12	–	3
State ...........................................................................................	2	3	1
Total ......................................................................................	$14	$3	$4

Schedule of effective income tax rate reconciliation

A reconciliation of the amount computed by applying the federal statutory income tax rate of 21% to pre-tax

income as compared to the total income tax provision recorded are as follows (In millions):


	Years Ended December 31,
	2025		2024		2023
Income taxes at federal statutory rate ..................................	$11	21%	$1	21%	$5	21%
State income taxes, net of federal benefit(1) .........................	–	–	2	34	1	5
Unrecognized tax benefits ...................................................	1	1	–	–	(4)	(14)
Research and development credit ........................................	(1)	(2)	(2)	(38)	1	3
Nontaxable or nondeductible items:
Meals and entertainment....................................................	2	4	1	23	1	5
Stock based compensation expense ...................................	1	1	1	11	–	–
Total income tax provision ..................................................	$14	25%	$3	51%	$4	20%

________________

(1)The states that, in aggregate, accounting for over 50 percent of the effect of the state and location income taxes shown above were: (1) for

2025, California, Colorado, Missouri, New Jersey, Oklahoma and Texas.

Schedule of deferred tax assets and liabilities

The components of the deferred income tax assets (liabilities) are as follows (In millions):


	December 31, 2025	December 31, 2024
Deferred tax assets
Allowance for doubtful accounts ..........................................................................	$16	$10
Tax credit carryforwards .......................................................................................	6	1
Net operating loss carryforwards ..........................................................................	357	109
Non-deductible claims ..........................................................................................	8	–
Interest disallowance .............................................................................................	122	108
Lease liability ........................................................................................................	174	148
Deferred finance liability ......................................................................................	16	21
Other deferred tax assets .......................................................................................	15	18
Total deferred tax assets ...................................................................................	714	415
Deferred tax liabilities
Rental equipment, property and other fixed assets ...............................................	(545)	(282)
Intangible assets ....................................................................................................	(34)	(13)
Right of use asset ..................................................................................................	(162)	(137)
Other deferred tax liabilities .................................................................................	(16)	(14)
Total deferred tax liabilities .............................................................................	(757)	(446)
Deferred tax liabilities, net ...............................................................................	$(43)	$(31)

Schedule of unrecognized tax benefits

The following table summarizes the gross amounts of unrecognized tax benefits without regard to reduction in

tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled (In

millions):


	December 31, 2025	December 31, 2024
Beginning balance .....................................................................................................	$–	$–
Additions based on tax positions related to current year ......................................	1	–
Additions based on tax positions related to prior years ........................................	–	–
Reductions based on tax positions related to prior years ......................................	–	–
Ending balance ..........................................................................................................	$1	$–