Custom Truck One Source (CTOS) Status update summary

Overview of new segment reporting framework

• Transitioning from three segments to two: Specialty Equipment Rentals (SER) and Specialty Truck Equipment and Manufacturing (STEM), effective Q1 2026, with operations already aligned since January 1, 2024.

• APS activities are now split between SER and STEM based on whether they are rental- or sales-led, eliminating APS as a standalone segment.

• Historical results recast for 2024 and 2025 for comparability, with direct SG&A now allocated to segments and segment-level adjusted EBITDA reported.

• No impact to consolidated GAAP results, free cash flow, net leverage, or capital allocation strategy; only internal accounting for intersegment transactions changes.

• Shared corporate expenses (~$99M in 2025) remain outside segments for clarity.

Rationale and benefits of realignment

• New structure aligns external reporting with internal management and decision-making, reflecting how management evaluates the business.

• Provides clear separation between rental and sales/manufacturing businesses, improving visibility into margin, capital intensity, and segment performance.

• Enhances investor transparency and peer comparability, allowing each segment to highlight its performance.

• Simplifies reporting by integrating APS activities into the most relevant segment.

• No change to customer strategy, go-to-market approach, or leadership structure.

Segment definitions and key metrics

• SER includes most of the legacy ERS segment and rental-related APS; STEM includes legacy TES, certain used sales, and sales-related APS.

• SER key metrics: revenue by category, gross profit/margin, adjusted EBITDA, utilization, OEC on rent, on-rent yield, net capex, fleet size/age, asset-level returns.

• STEM key metrics: revenue by category, gross profit/margin, adjusted EBITDA, new sales backlog, net order trends.

• Segment-level reporting includes revenue, gross profit, and adjusted EBITDA after direct SG&A allocations.

• Inter-segment transactions use cost-plus methodology (10% margin for used equipment, 16% for new equipment transfers).