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).
- Domestic Asset Turnover
- The domestic asset turnover ratio exhibited an overall upward trend from 2018 to 2020, rising from 0.72 to a peak of 0.82. This increase indicates improved efficiency in using assets to generate revenue in domestic operations during this period. However, a slight decline is observed in 2021, dropping to 0.79, followed by a continued decrease to 0.76 in 2022. Although the ratio remains higher than the 2018 level, this downturn suggests a slight weakening in asset utilization efficiency domestically in the later years.
- Foreign Asset Turnover
- The foreign asset turnover ratio demonstrated a different pattern, starting at 0.80 in 2018 and increasing steadily to 0.86 in 2019. This marked improvement reflects enhanced asset efficiency internationally during this timeframe. However, the ratio decreased to 0.80 in 2020 and dropped further to 0.70 in 2021, indicating a significant reduction in asset turnover abroad. In 2022, the ratio partially recovered to 0.79, suggesting some stabilization, yet it remained below earlier peak levels achieved in 2019.
- Comparative Observations
- Comparing both geographic areas, domestic asset turnover showed more stability and a smaller range of fluctuations compared to the foreign asset turnover, which experienced sharper rises and falls. The foreign ratio’s peak in 2019 was higher than the domestic peak, but subsequent declines were also more pronounced. The domestic market closed 2022 slightly below its peak, while the foreign market displayed a rebound from its lowest point in 2021 but still remained below its previous highs.
- Overall Insights
- Overall, asset turnover efficiency domestically was relatively stable with a mild downward trend post-2020, whereas foreign asset turnover experienced more volatility with notable declines during 2020 and 2021, likely influenced by broader market or operational challenges. The partial recovery in foreign asset turnover in 2022 suggests adaptability and potential corrective measures, though asset utilization efficiency has not yet fully returned to earlier peak levels in either geography.
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
- Equipment rentals revenue
- The equipment rentals revenue demonstrates an overall upward trend from 2018 to 2022. Starting at $6,388 million in 2018, it increased to $7,283 million in 2019, then experienced a decline to $6,543 million in 2020. Following this dip, revenue rebounded strongly to $7,430 million in 2021 and further accelerated to $9,139 million in 2022, marking the highest value in the analyzed period.
- Rental equipment, net
- The net value of rental equipment fluctuates over the years with an initial increase from $8,910 million in 2018 to $8,995 million in 2019. This was followed by a notable decline to $7,960 million in 2020. From 2021 onward, the net rental equipment value increased substantially, reaching $9,448 million in 2021 and peaking at $12,047 million in 2022. The rise in 2022 reflects significant investment or asset growth in the rental equipment base.
- Area asset turnover
- The area asset turnover ratio exhibits modest variation throughout the period. Starting at 0.72 in 2018, the ratio rose to a peak of 0.82 in 2020, indicating improved efficiency in using assets to generate revenue. However, the ratio declined in subsequent years to 0.79 in 2021 and further to 0.76 in 2022, suggesting a slight reduction in asset utilization efficiency despite increasing revenues and asset base.
- Summary
- The data reveals a pattern of revenue growth largely supported by an expanding asset base, especially from 2021 to 2022. The dip in both revenue and net rental equipment in 2020 may be attributed to external factors causing a temporary contraction. Despite increasing assets, the gradual decline in asset turnover from 2020 onwards indicates that the company's asset growth outpaced its revenue generation capacity, possibly reflecting a lag in achieving optimal operational efficiency from new investments.
Area Asset Turnover: Foreign
United Rentals Inc.; Foreign; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ 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
- Equipment rentals revenue
- The equipment rentals revenue exhibits an overall upward trend from 2018 to 2022. Starting at $552 million in 2018, it increased to $681 million in 2019, then decreased to $597 million in 2020. However, a significant recovery followed, with revenues rising to $777 million in 2021 and further to $977 million in 2022, marking the highest value over the five-year span.
- Rental equipment, net
- Rental equipment, net value demonstrates a consistent growth trajectory from 2018 through 2022. Beginning at $690 million in 2018, it rose steadily to $792 million in 2019. A slight decline to $745 million occurred in 2020, followed by substantial increases to $1,112 million in 2021 and $1,230 million in 2022. This indicates significant investment or acquisition of rental assets in the later years.
- Area asset turnover
- The area asset turnover ratio, which measures revenue generated per dollar of rental equipment, shows variability and a mild decline over the observed period. It started at 0.8 in 2018, increased slightly to 0.86 in 2019, then decreased back to 0.8 in 2020. A notable drop to 0.7 occurred in 2021, followed by a partial recovery to 0.79 in 2022. This suggests a temporary reduction in asset efficiency or utilization, improving somewhat by the end of the period.
Equipment rentals revenue
United Rentals Inc., equipment rentals revenue by geographic area
US$ 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).
- Domestic Equipment Rentals Revenue
- The domestic segment exhibited a generally positive growth trend over the five-year period. Starting at $6,388 million in 2018, revenue increased consistently in 2019 to $7,283 million. A decline occurred in 2020, with revenue falling to $6,543 million, likely influenced by external factors during that year. Subsequently, the segment recovered and expanded, registering $7,430 million in 2021 and reaching a peak of $9,139 million in 2022. Overall, domestic revenue reflects robust growth and resilience, with notable recovery after the 2020 dip.
- Foreign Equipment Rentals Revenue
- The foreign segment also experienced growth but with more variability. Revenue rose from $552 million in 2018 to $681 million in 2019, then declined to $597 million in 2020. From 2020 onward, the foreign revenue showed steady growth, reaching $777 million in 2021 and $977 million in 2022. The foreign market's revenue trajectory indicates initial volatility followed by a consistent upward trend in the latter years.
- Total Equipment Rentals Revenue
- Total revenue mirrored the patterns observed in the domestic and foreign segments. Starting at $6,940 million in 2018, total revenue increased to $7,964 million in 2019 before declining to $7,140 million in 2020. Recovery and growth occurred in the subsequent years, with total revenue rising to $8,207 million in 2021 and reaching $10,116 million in 2022. This overall trend suggests resilience in the combined markets with strong growth post-2020.
- Summary of Trends
- The data reveals that both domestic and foreign equipment rental revenues faced a downturn in 2020, likely reflecting broader economic challenges in that period. However, both segments demonstrated recovery and expansion in 2021 and 2022. The domestic market contributes the majority of revenue and shows a strong upward trend, especially in the final year. The foreign market, while smaller in scale, shows a positive growth trajectory after 2020. The combined total revenue reflects these dynamics, highlighting recovery and growth trends consistent across geographies.
Rental equipment, net
United Rentals Inc., rental equipment, net by geographic area
US$ 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).
- Domestic Rental Equipment, Net
- The domestic rental equipment net values exhibited a generally increasing trend over the five-year period. Starting from 8,910 million USD in 2018, there was a slight increase to 8,995 million USD in 2019. However, in 2020, a notable decline occurred, bringing the value down to 7,960 million USD. This decline was followed by a significant recovery in 2021, reaching 9,448 million USD, and continued growth into 2022, peaking at 12,047 million USD. This suggests a strong rebound and expansion in the domestic market, especially after the dip in 2020.
- Foreign Rental Equipment, Net
- The foreign segment showed more moderate fluctuations but overall growth. The value increased from 690 million USD in 2018 to 792 million USD in 2019, followed by a slight decrease to 745 million USD in 2020. In 2021, there was a substantial increase to 1,112 million USD, and the growth trend persisted in 2022, with the value reaching 1,230 million USD. This progression indicates expanding international operations with some resilience despite minor setbacks.
- Total Rental Equipment, Net
- The total rental equipment net figures parallel the combined trends of the domestic and foreign components. The total rose modestly from 9,600 million USD in 2018 to 9,787 million USD in 2019 before declining to 8,705 million USD in 2020. A pronounced recovery occurred in 2021, with total net values reaching 10,560 million USD, followed by a significant increase in 2022 to 13,277 million USD. The total data reflect an overall growth trajectory with a noticeable dip in 2020 likely associated with broader economic or market challenges during that period, followed by strong recovery and expansion.