Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

Our reportable segments are i) general rentals and ii) specialty (formerly "trench, power and fluid solutions"). In the fourth quarter of 2021, following a realignment of certain of our divisions and regions, and changes in leadership roles and responsibilities, we updated our analysis of operating segments and concluded that our divisions now represent our operating segments. Prior to the fourth quarter of 2021, our regions were our operating segments. While this update reflects a change in operating segments, it did not result in any changes to the rental locations in each reportable segment (see Item 2—Properties for detail on the locations in each reportable segment), and, as a result, there were no changes to the historically reported segment financial information.

As noted below, we evaluate segment performance primarily based on segment equipment rentals gross profit. The primary change resulting from the change in segment presentation is to our ongoing review of segment equipment rentals margins, which we monitor on a quarterly basis to assess margin similarity between operating segments. Because of the change in operating segments, this margin analysis is now conducted at the division level, while it was historically performed at the region level. As discussed further in note 2 to our consolidated financial statements ("Evaluation of Goodwill Impairment"), we test for goodwill impairment at the reporting unit (the region, which is one level below the operating segment (division)) level, and the change in the segment structure did not impact our goodwill impairment testing.

For general rentals, the divisions discussed below, which are our operating segments, are aggregated into the reportable segment. The specialty segment is a single division that is both an operating segment and a reportable segment. We believe that the divisions that are aggregated into our reportable segments have similar economic characteristics, as each region is capital intensive, offers similar products to similar customers, uses similar methods to distribute its products, and is subject to similar competitive risks. The aggregation of our divisions also reflects the management structure that we use for making operating decisions and assessing performance. We evaluate segment performance primarily based on segment equipment rentals gross profit.

The general rentals segment includes the rental of i) general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment and material handling equipment, ii) aerial work platforms, such as boom lifts and scissor lifts and iii) general tools and light equipment, such as pressure washers, water pumps and power tools. The general rentals segment reflects the aggregation of four geographic divisions— Central, Northeast, Southeast and West—and operates throughout the United States and Canada.

The specialty segment, which, as noted above, is a single division that is both an operating segment and a reportable segment, includes the rental of specialty construction products such as i) trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers and line testing equipment for underground work, ii) power and HVAC equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment, iii) fluid solutions equipment primarily used for fluid containment, transfer and treatment, and iv) mobile storage equipment and modular office space. The specialty segment’s customers include construction companies involved in infrastructure projects, municipalities and industrial companies. This segment primarily operates in the United States and Canada, and has a limited presence in Europe, Australia and New Zealand.

The following table presents the percentage of equipment rental revenue by equipment type for the years ended December 31, 2021, 2020 and 2019: 

	Year Ended December 31,
	2021		2020		2019
Primarily rented by our general rentals segment:
General construction and industrial equipment	42	%	43	%	43	%
Aerial work platforms	26	%	27	%	28	%
General tools and light equipment	8	%	8	%	8	%
Primarily rented by our specialty segment:
Power and HVAC equipment	9	%	9	%	8	%
Trench safety equipment	6	%	6	%	6	%
Fluid solutions equipment	7	%	7	%	7	%
Mobile storage equipment and modular office space (1)	2	%	—	%	—	%

________________

(1)As discussed in note 4 to the consolidated financial statements, in May 2021, we completed the acquisition of General Finance, which was a leading provider of mobile storage equipment and modular office space. Prior to the General Finance acquisition, we did not rent material amounts of such equipment.

The accounting policies for our segments are the same as those described in the summary of significant accounting policies in note 2. Certain corporate costs, including those related to selling, finance, legal, risk management, human resources, corporate management and information technology systems, are deemed to be of an operating nature and are allocated to our segments based primarily on rental fleet size.

The following table sets forth financial information by segment as of, and for the years ended, December 31, 2021, 2020 and 2019:  

	General rentals		Specialty		Total
2021
Equipment rentals	$	6,074	$	2,133	$	8,207
Sales of rental equipment	862		106		968
Sales of new equipment	142		61		203
Contractor supplies sales	71		38		109
Service and other revenues	202		27		229
Total revenue	7,351		2,365		9,716
Depreciation and amortization expense	1,611		372		1,983
Equipment rentals gross profit	2,269		998		3,267
Capital expenditures	2,719		479		3,198
Total assets	$	16,087	$	4,205	$	20,292
2020
Equipment rentals	$	5,472	$	1,668	$	7,140
Sales of rental equipment	785		73		858
Sales of new equipment	214		33		247
Contractor supplies sales	64		34		98
Service and other revenues	164		23		187
Total revenue	6,699		1,831		8,530
Depreciation and amortization expense	1,633		355		1,988
Equipment rentals gross profit	1,954		765		2,719
Capital expenditures	969		189		1,158
Total assets	$	15,051	$	2,817	$	17,868
2019
Equipment rentals	$	6,202	$	1,762	$	7,964
Sales of rental equipment	768		63		831
Sales of new equipment	238		30		268
Contractor supplies sales	71		33		104
Service and other revenues	157		27		184
Total revenue	7,436		1,915		9,351
Depreciation and amortization expense	1,681		357		2,038
Equipment rentals gross profit	2,407		800		3,207
Capital expenditures	1,967		383		2,350
Total assets	$	16,036	$	2,934	$	18,970

Equipment rentals gross profit is the primary measure management reviews to make operating decisions and assess segment performance. The following is a reconciliation of equipment rentals gross profit to income before provision for income taxes:  

	Year Ended December 31,
	2021		2020		2019
Total equipment rentals gross profit	$	3,267	$	2,719	$	3,207
Gross profit from other lines of business	586		464		463
Selling, general and administrative expenses	(1,199)		(979)		(1,092)
Merger related costs (1)	(3)		—		(1)
Restructuring charge (2)	(2)		(17)		(18)
Non-rental depreciation and amortization	(372)		(387)		(407)
Interest expense, net	(424)		(669)		(648)
Other (expense) income, net	(7)		8		10
Income before provision for income taxes	$	1,846	$	1,139	$	1,514

 ___________________

(1)Primarily reflects transaction costs associated with the General Finance acquisition discussed in note 4 to the consolidated financial statements. Merger related costs only include costs associated with major acquisitions that significantly impact our operations. For additional information, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Other costs/(income)-merger related costs" below.

(2)Primarily reflects severance and branch closure charges associated with our restructuring programs. For additional information, see note 6 to the consolidated financial statements.

We primarily operate in the United States and Canada, and have a limited presence in Europe, Australia and New Zealand. In July 2018, we completed the acquisition of BakerCorp, which allowed for our entry into select European markets. As discussed in note 4 to the consolidated financial statements, in May 2021, we completed the acquisition of General Finance, which allowed for our entry into select markets in Australia and New Zealand. Our presence in Europe, Australia and New Zealand is limited, and the foreign information in the table below primarily reflects Canada. The following table presents geographic area information for the years ended December 31, 2021, 2020 and 2019, except for balance sheet information, which is presented as of December 31, 2021 and 2020:

	Domestic		Foreign		Total
2021
Equipment rentals	$	7,430	$	777	$	8,207
Sales of rental equipment	873		95		968
Sales of new equipment	162		41		203
Contractor supplies sales	95		14		109
Service and other revenues	201		28		229
Total revenue	8,761		955		9,716
Rental equipment, net	9,448		1,112		10,560
Property and equipment, net	560		52		612
Goodwill and other intangible assets, net	$	5,637	$	506	$	6,143
2020
Equipment rentals	$	6,543	$	597	$	7,140
Sales of rental equipment	784		74		858
Sales of new equipment	218		29		247
Contractor supplies sales	86		12		98
Service and other revenues	166		21		187
Total revenue	7,797		733		8,530
Rental equipment, net	7,960		745		8,705
Property and equipment, net	558		46		604
Goodwill and other intangible assets, net	$	5,361	$	455	$	5,816
2019
Equipment rentals	$	7,283	$	681	$	7,964
Sales of rental equipment	757		74		831
Sales of new equipment	238		30		268
Contractor supplies sales	92		12		104
Service and other revenues	164		20		184
Total revenue	$	8,534	$	817	$	9,351