Company: MGRC
Filing Date: 2025-04-24
Form Type: 10-Q
Source: 0000950170-25-057987
Chunk: 6

Company: MCGRATH RENTCORP
Filing Date: 2025-04-24
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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 finance leases were $6.4 million. Of the total investment in sales-type leases, future minimum lease payments are expected to be $2.3 million in 2026, $1.2 million in 2027, $1.0 million in 2028, $1.1 million in 2029 and $0.8 million in 2030. The Company’s assessment of current expected losses on these receivables was immaterial and therefore no credit loss expense was provided as of the three months ended March 31, 2025. Other revenues include interest income on finance leases and rental income on facility leases.
In the three months ended March 31, 2025, the Company’s lease revenues were $147.9 million, consisting of $147.1 million of operating lease revenues and $0.8 million of finance lease revenues. The Company has entered into finance leases to finance certain equipment sales to customers. The lease agreements have a bargain purchase option at the end of the lease term. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment. The Company’s finance lease revenues for the three months ended March 31, 2025, include $0.6 million of sales revenues and $0.2 million of interest income.
Non-Lease Revenues
Non-lease revenues are recognized in the period when control of the performance obligation is transferred, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For portable storage containers and electronic test equipment, rental related services revenues for delivery and return delivery are considered non-lease revenues.
Sales revenues are typically recognized at a point in time, which occurs upon the completion of delivery, installation and acceptance of the equipment by the customer. Sales contracts that satisfy the criteria for over-time recognition are recognized as work

is performed by using the ratio of costs incurred to estimated total contract costs for each contract. Accounting for non-lease revenues requires judgment in determining the point in time the customer gains control of the equipment and the appropriate accounting period to recognize revenue.
Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses.
The following table disaggregates the Company’s revenues by lease (within the scope of Topic 842) and non-lease revenues (within the scope of