Analysis of Geographic Areas
United Rentals Inc. operates in 2 regions: Domestic and Foreign.
Area Asset Turnover
United Rentals Inc., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Domestic | 0.76 | 0.79 | 0.82 | 0.81 | 0.72 |
| Foreign | 0.79 | 0.70 | 0.80 | 0.86 | 0.80 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The asset turnover ratios for both domestic and foreign segments exhibit fluctuating patterns between 2018 and 2022, reflecting variations in the efficiency of asset utilization to generate revenue across different geographic markets.
- Domestic Asset Turnover
- An initial growth phase is observed from 2018 to 2020, during which the ratio increased from 0.72 to a peak of 0.82. This improvement in asset efficiency was followed by a gradual decline over the subsequent two years, with the ratio receding to 0.79 in 2021 and 0.76 by the end of 2022.
- Foreign Asset Turnover
- The foreign segment demonstrated higher volatility compared to the domestic segment. After an initial increase from 0.80 in 2018 to a peak of 0.86 in 2019, the ratio entered a downward trend, reaching a period low of 0.70 in 2021. A recovery occurred in 2022, with the ratio rising back to 0.79.
- Comparative Geographic Performance
- Foreign operations generally maintained a higher turnover ratio than domestic operations for the majority of the period, with the exception of 2021. The domestic segment showed a more stable trajectory, whereas the foreign segment experienced a sharper contraction in efficiency between 2019 and 2021 before rebounding.
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Area Asset Turnover: Domestic
United Rentals Inc.; Domestic; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals revenue | 9,139) | 7,430) | 6,543) | 7,283) | 6,388) |
| Rental equipment, net | 12,047) | 9,448) | 7,960) | 8,995) | 8,910) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.76 | 0.79 | 0.82 | 0.81 | 0.72 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Equipment rentals revenue ÷ Rental equipment, net
= 9,139 ÷ 12,047 = 0.76
The domestic rental operations exhibit a period of significant expansion in both revenue and asset base from 2018 through 2022, interrupted by a brief contraction in 2020. While total revenue reached its peak in 2022, the efficiency of asset utilization, as measured by the area asset turnover ratio, has declined from its peak in 2020.
- Equipment Rentals Revenue Trends
- Revenue demonstrated an overall upward trajectory, growing from 6,388 million US dollars in 2018 to 9,139 million US dollars in 2022. A notable dip occurred in 2020, where revenue fell to 6,543 million US dollars, followed by a strong recovery in 2021 and a substantial surge in 2022, indicating robust demand for rental equipment in the domestic market toward the end of the period.
- Rental Equipment Asset Base
- The net value of rental equipment remained relatively stable between 2018 and 2019 before decreasing to 7,960 million US dollars in 2020. Subsequently, the company engaged in aggressive asset acquisition, with the net value rising sharply to 12,047 million US dollars by 2022. This represents a significant increase in the capital invested in the domestic rental fleet.
- Area Asset Turnover Performance
- The area asset turnover ratio improved from 0.72 in 2018 to a peak of 0.82 in 2020. Despite the decline in absolute revenue during 2020, the ratio increased because the reduction in the net asset base outweighed the revenue loss. However, a downward trend is observed from 2021 to 2022, with the ratio falling to 0.76. This indicates that the recent rapid expansion of the rental equipment fleet has outpaced the corresponding growth in rental revenue, leading to a temporary decrease in asset productivity.
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Area Asset Turnover: Foreign
United Rentals Inc.; Foreign; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals revenue | 977) | 777) | 597) | 681) | 552) |
| Rental equipment, net | 1,230) | 1,112) | 745) | 792) | 690) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.79 | 0.70 | 0.80 | 0.86 | 0.80 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Equipment rentals revenue ÷ Rental equipment, net
= 977 ÷ 1,230 = 0.79
The foreign geographic segment exhibited a general trajectory of expansion in both revenue and asset base between 2018 and 2022, although the efficiency of asset utilization experienced notable fluctuations.
- Equipment Rentals Revenue Trends
- Revenue in foreign markets grew from 552 million US dollars in 2018 to 977 million US dollars by 2022. A temporary contraction was observed in 2020, where revenue declined to 597 million US dollars, followed by a period of accelerated growth in 2021 and 2022.
- Rental Equipment Investment
- The net value of rental equipment saw a substantial increase over the five-year period, rising from 690 million US dollars in 2018 to 1.23 billion US dollars in 2022. A significant surge in capital investment occurred between 2020 and 2021, during which the asset base grew by approximately 49%.
- Area Asset Turnover Analysis
- The asset turnover ratio reached a peak of 0.86 in 2019, representing the highest level of operational efficiency in the analyzed period. A downward trend followed, culminating in a low of 0.70 in 2021; this decline indicates that asset growth outpaced revenue generation during that fiscal year. By 2022, the ratio recovered to 0.79, signaling a return toward historical efficiency levels as revenue growth began to align more closely with the expanded asset base.
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Equipment rentals revenue
United Rentals Inc., equipment rentals revenue by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Domestic | 9,139) | 7,430) | 6,543) | 7,283) | 6,388) |
| Foreign | 977) | 777) | 597) | 681) | 552) |
| Total | 10,116) | 8,207) | 7,140) | 7,964) | 6,940) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total equipment rentals revenue exhibited a general upward trajectory between 2018 and 2022, increasing from 6,940 million USD to 10,116 million USD. While a temporary contraction occurred in 2020, the subsequent recovery was characterized by accelerated growth, culminating in a peak for both domestic and foreign markets by the end of the period.
- Domestic Revenue Trends
- Domestic operations remain the primary driver of total revenue. Revenue grew from 6,388 million USD in 2018 to 7,283 million USD in 2019, before declining by approximately 10% to 6,543 million USD in 2020. A strong recovery followed, with revenue reaching 7,430 million USD in 2021 and surging to 9,139 million USD in 2022, representing a 43% increase relative to the 2018 baseline.
- Foreign Revenue Trends
- Foreign revenue followed a similar volatility pattern to the domestic market but showed consistent long-term growth. Starting at 552 million USD in 2018, foreign revenue peaked at 977 million USD in 2022. The most significant expansion occurred between 2021 and 2022, where revenue grew by approximately 25.7%.
- Geographic Revenue Composition
- The proportion of revenue generated from foreign operations has seen a gradual increase. In 2018, foreign revenue accounted for approximately 7.9% of total rentals revenue. By 2022, this share increased to approximately 9.7%, indicating a modest but steady expansion of the company's international footprint relative to its domestic operations.
- Aggregate Growth Analysis
- The total revenue growth rate peaked between 2021 and 2022, with an increase of approximately 23.3%. This period marks the most aggressive growth phase in the five-year window, surpassing the pre-pandemic growth rate observed between 2018 and 2019.
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Rental equipment, net
United Rentals Inc., rental equipment, net by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Domestic | 12,047) | 9,448) | 7,960) | 8,995) | 8,910) |
| Foreign | 1,230) | 1,112) | 745) | 792) | 690) |
| Total | 13,277) | 10,560) | 8,705) | 9,787) | 9,600) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The net value of rental equipment experienced a period of volatility between 2018 and 2022, characterized by a contraction in 2020 followed by a period of rapid expansion. Total assets grew from 9,600 million US dollars in 2018 to 13,277 million US dollars by the end of 2022, representing a total increase of approximately 38.3% over the analyzed timeframe.
- Domestic Asset Performance
- The domestic segment represents the vast majority of the rental equipment portfolio. Following a period of relative stability between 2018 and 2019, domestic asset values declined to 7,960 million US dollars in 2020. A significant recovery was observed thereafter, with values escalating to 12,047 million US dollars by December 31, 2022, indicating substantial capital investment in the domestic fleet during the final two years of the period.
- Foreign Asset Growth
- Foreign operations demonstrated a strong upward trajectory, nearly doubling in value over the five-year span. Assets increased from 690 million US dollars in 2018 to 1,230 million US dollars in 2022. A notable acceleration in growth occurred between 2020 and 2021, during which foreign assets rose from 745 million to 1,112 million US dollars, suggesting a strategic expansion into international markets.
- Geographic Concentration and Diversification
- The asset base remains heavily concentrated in the domestic market; however, the proportional contribution of foreign assets has steadily risen. In 2018, foreign equipment accounted for approximately 7.2% of the total net rental equipment. By the end of 2022, this share increased to approximately 9.3%, reflecting a gradual diversification of the company's geographic asset footprint.
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