Company: MGRC
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000950170-25-098322
Chunk: 5

Company: MCGRATH RENTCORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 1
Chunk 5
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 for as finance leases. 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 basis which results in a constant rate of return on the unrecovered lease investment. As of the six

months ended June 30, 2025, the Company’s future minimum lease payments to be received under non-cancelable finance leases were$6.7 million. Of the total investment in sales-type leases, future minimum lease payments are expected to be $1.9 million for the remainder of the current year, $1.8 million in 2026, $1.0 million in 2027, $1.1 million in 2028 and $0.8 million in 2029. The Company’s assessment of current expected losses on these receivables was not material and therefore no credit loss expense was provided as of the six months ended June 30, 2025. Other revenues include interest income on finance leases and rental income on facility leases.
In the three and six months ended June 30, 2025, the Company’s lease revenues were $154.2 million and $302.1 million, respectively, consisting of $152.7 million and $299.9 million of operating lease revenues, respectively, and $1.5 million and $2.2 million of finance lease revenues, respectively. 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 and six months ended June 30, 2025, include $1.3 million and $1.8 million of sales revenues, respectively, and $0.2 million and $0.4 million of interest income, respectively.
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