Analysis of Reportable Segments
United Rentals Inc. operates in 2 segments: General rentals and Specialty.
Segment Profit Margin
United Rentals Inc., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 33.84% | 30.87% | 29.17% | 32.37% | 35.01% |
| Specialty | 43.82% | 42.20% | 41.78% | 41.78% | 44.76% |
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).
An analysis of segment profit margins from 2018 through 2022 reveals a synchronized pattern of contraction and recovery across both reporting segments. Both divisions experienced a decline in profitability that bottomed out in 2020, followed by a consistent trajectory of margin expansion through the end of 2022.
- General Rentals Profitability
- This segment exhibited significant volatility over the five-year period. The profit margin declined from 35.01% in 2018 to a period low of 29.17% in 2020. Following this trough, a recovery phase commenced, with margins improving to 30.87% in 2021 and reaching 33.84% by December 31, 2022. Despite the recovery, the 2022 margin remained approximately 117 basis points below 2018 levels.
- Specialty Profitability
- The Specialty segment maintained a higher and more stable margin profile compared to General Rentals. After an initial decrease from 44.76% in 2018 to 41.78% in 2019, the margin remained flat through 2020. A subsequent upward trend was observed, with the margin increasing to 42.20% in 2021 and further expanding to 43.82% in 2022.
- Comparative Segment Performance
- The Specialty segment consistently outperformed General Rentals in terms of profit margins throughout the entire period. The margin spread between the two segments was narrowest in 2022 (9.98 percentage points) and widest in 2020 (12.61 percentage points). While both segments followed a similar V-shaped recovery path starting in 2021, the Specialty segment demonstrated greater resilience to the downturn observed between 2018 and 2020.
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Segment Profit Margin: General rentals
United Rentals Inc.; General rentals; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals gross profit | 2,905) | 2,269) | 1,954) | 2,407) | 2,293) |
| Revenue | 8,584) | 7,351) | 6,699) | 7,436) | 6,550) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 33.84% | 30.87% | 29.17% | 32.37% | 35.01% |
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
Segment profit margin = 100 × Equipment rentals gross profit ÷ Revenue
= 100 × 2,905 ÷ 8,584 = 33.84%
The General Rentals segment exhibited a volatile but ultimately growth-oriented trajectory between 2018 and 2022, characterized by a significant contraction in 2020 followed by a robust recovery in both top-line revenue and profitability.
- Revenue and Gross Profit Trends
- Revenue increased from US$ 6,550 million in 2018 to a peak of US$ 8,584 million in 2022. This progression was interrupted by a contraction in 2020, where revenue declined to US$ 6,699 million. Equipment rentals gross profit mirrored this trend, falling from US$ 2,293 million in 2018 to a period low of US$ 1,954 million in 2020, before rebounding strongly to US$ 2,905 million by the end of 2022.
- Segment Profit Margin Performance
- A sustained decline in the segment profit margin was observed from 2018 to 2020, with the ratio dropping from 35.01% to 29.17%. This downward trend reversed in 2021 as the margin climbed to 30.87%, continuing upward to reach 33.84% in 2022. While the recovery is evident, the margin has not yet returned to the 2018 peak.
- Operational Analysis
- The data indicates a strong correlation between revenue recovery and margin expansion following the 2020 trough. The increase in gross profit and margin from 2021 through 2022 suggests improved pricing power or enhanced cost management during the period of revenue acceleration. Despite the margin remaining slightly below 2018 levels, the absolute growth in revenue has resulted in the highest gross profit levels of the five-year period.
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Segment Profit Margin: Specialty
United Rentals Inc.; Specialty; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals gross profit | 1,340) | 998) | 765) | 800) | 670) |
| Revenue | 3,058) | 2,365) | 1,831) | 1,915) | 1,497) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 43.82% | 42.20% | 41.78% | 41.78% | 44.76% |
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
Segment profit margin = 100 × Equipment rentals gross profit ÷ Revenue
= 100 × 1,340 ÷ 3,058 = 43.82%
The Specialty segment demonstrated significant scale expansion between 2018 and 2022, characterized by a substantial increase in both revenue and gross profit, despite a temporary contraction during the 2020 fiscal year.
- Revenue and Gross Profit Trajectory
- Revenue grew from US$ 1,497 million in 2018 to US$ 3,058 million in 2022, representing a more than twofold increase over the period. Equipment rentals gross profit mirrored this growth, rising from US$ 670 million to US$ 1,340 million. A brief disruption is noted in 2020, where revenue declined to US$ 1,831 million and gross profit fell to US$ 765 million, followed by a rapid acceleration in growth through 2021 and 2022.
- Segment Profit Margin Analysis
- The segment profit margin exhibited a U-shaped trend. After an initial decrease from 44.76% in 2018 to 41.78% in 2019, the margin remained flat at 41.78% through 2020. A recovery phase began in 2021, with the margin climbing to 42.20% and reaching 43.82% by the end of 2022. This indicates that the segment successfully improved its profitability ratios during its period of highest revenue growth, although margins remained slightly below the 2018 peak.
- Operational Efficiency and Scaling
- The simultaneous increase in both absolute gross profit and the profit margin from 2020 to 2022 suggests positive operating leverage. The ability to expand the margin while doubling revenue indicates an improvement in cost management or an increase in the rental rate environment during the latter part of the analyzed period.
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Segment Return on Assets (Segment ROA)
United Rentals Inc., ROA by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 14.82% | 14.10% | 12.98% | 15.01% | 14.70% |
| Specialty | 29.26% | 23.73% | 27.16% | 27.27% | 26.42% |
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 Segment Return on Assets (ROA) for the period between 2018 and 2022 demonstrates a divergence in asset efficiency between the General Rentals and Specialty segments, with the latter consistently maintaining a significantly higher rate of return. While both segments experienced fluctuations, they both concluded the period in 2022 with improved performance relative to their respective cyclical lows.
- General Rentals Performance
- Return on assets for the General Rentals segment exhibited a pattern of stability with a temporary contraction. The ROA rose slightly from 14.70% in 2018 to 15.01% in 2019 before declining to a period low of 12.98% in 2020. A steady recovery followed, with the ratio climbing to 14.10% in 2021 and reaching 14.82% by the end of 2022, effectively returning to pre-2020 levels.
- Specialty Performance
- The Specialty segment maintained a substantially higher ROA throughout the five-year period, although it displayed greater volatility. After reaching 27.27% in 2019 and remaining nearly flat at 27.16% in 2020, the segment saw a notable decline to 23.73% in 2021. This downturn was followed by a sharp rebound in 2022, where the ROA reached a peak of 29.26%, the highest value recorded for any segment during the analyzed period.
- Comparative Segment Efficiency
- A consistent performance gap is observable, as the Specialty segment's asset utilization remained roughly double that of General Rentals. Even at its 2021 low of 23.73%, the Specialty segment's ROA significantly exceeded the peak performance of General Rentals. This indicates a higher intrinsic ability of the Specialty segment to generate earnings from its asset base compared to the General Rentals segment.
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Segment ROA: General rentals
United Rentals Inc.; General rentals; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals gross profit | 2,905) | 2,269) | 1,954) | 2,407) | 2,293) |
| Total assets | 19,604) | 16,087) | 15,051) | 16,036) | 15,597) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 14.82% | 14.10% | 12.98% | 15.01% | 14.70% |
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
Segment ROA = 100 × Equipment rentals gross profit ÷ Total assets
= 100 × 2,905 ÷ 19,604 = 14.82%
The financial performance of the general rentals segment from 2018 to 2022 is characterized by a period of initial stability, a temporary contraction in 2020, and a robust subsequent expansion. The segment demonstrated resilience by recovering from a cyclical downturn to exceed pre-pandemic profit levels by the end of the observed period.
- Gross Profit Trends
- Equipment rentals gross profit exhibited a fluctuating trajectory, starting at US$ 2,293 million in 2018 and reaching a peak of US$ 2,905 million in 2022. A significant decline was recorded in 2020, with gross profit falling to US$ 1,954 million, a decrease of approximately 18.8% from the previous year. A strong recovery followed, with 2022 profits increasing by 28.2% compared to 2021 levels.
- Asset Base Expansion
- Total assets remained relatively stable between 2018 and 2021, fluctuating within a narrow range between US$ 15,051 million and US$ 16,087 million. However, a substantial expansion occurred in 2022, with total assets rising to US$ 19,604 million. This sharp increase indicates a significant investment in the asset base toward the end of the five-year period.
- Segment Return on Assets (ROA) Analysis
- The segment ROA fluctuated between a low of 12.98% and a high of 15.01%. After peaking in 2019, the ratio declined in 2020, reflecting the impact of reduced gross profits relative to the asset base. A consistent recovery trend is observed from 2020 through 2022, with the ROA reaching 14.82%. The ability to maintain a near-peak ROA in 2022, despite the substantial increase in total assets, indicates that profit growth effectively scaled alongside the expanded asset base.
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Segment ROA: Specialty
United Rentals Inc.; Specialty; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Equipment rentals gross profit | 1,340) | 998) | 765) | 800) | 670) |
| Total assets | 4,579) | 4,205) | 2,817) | 2,934) | 2,536) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 29.26% | 23.73% | 27.16% | 27.27% | 26.42% |
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
Segment ROA = 100 × Equipment rentals gross profit ÷ Total assets
= 100 × 1,340 ÷ 4,579 = 29.26%
The Specialty segment exhibited significant expansion in both gross profit and asset base between 2018 and 2022, culminating in a peak Segment Return on Assets (ROA) at the end of the analyzed period.
- Gross Profit Trends
- Gross profit grew from 670 million USD in 2018 to 1,340 million USD in 2022, effectively doubling over the five-year span. A marginal decline was observed in 2020, falling to 765 million USD from 800 million USD in 2019, followed by a period of accelerated growth through 2022.
- Asset Base Evolution
- Total assets increased from 2,536 million USD in 2018 to 4,579 million USD in 2022. The most significant expansion occurred in 2021, where assets rose from 2,817 million USD to 4,205 million USD, indicating a substantial capital investment during that fiscal year.
- Segment ROA Interpretation
- The Segment ROA remained relatively consistent between 26.42% and 27.27% from 2018 through 2020. A notable contraction to 23.73% occurred in 2021, coinciding with the sharp increase in total assets, which suggests that the growth in the asset base initially outpaced the growth in gross profit. This trend reversed in 2022, as the ROA climbed to 29.26%, the highest level in the period, demonstrating enhanced operational efficiency and a higher return on the invested capital.
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Segment Asset Turnover
United Rentals Inc., asset turnover by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 0.44 | 0.46 | 0.45 | 0.46 | 0.42 |
| Specialty | 0.67 | 0.56 | 0.65 | 0.65 | 0.59 |
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).
An analysis of the segment asset turnover ratios from 2018 through 2022 reveals distinct operational efficiencies between the General Rentals and Specialty segments. While both segments experienced fluctuations, the Specialty segment consistently maintained a higher turnover rate than General Rentals throughout the observed period.
- General Rentals Asset Turnover
- This segment demonstrated relative stability in its asset utilization. The ratio increased from 0.42 in 2018 to a peak of 0.46 in 2019, remained largely consistent with a slight dip to 0.45 in 2020, returned to 0.46 in 2021, and concluded the period at 0.44 in 2022. The narrow range of fluctuation suggests a steady relationship between the asset base and revenue generation within this segment.
- Specialty Asset Turnover
- The Specialty segment exhibited higher overall efficiency but greater volatility compared to General Rentals. Starting at 0.59 in 2018, the ratio rose to 0.65 in 2019 and 2020. A significant contraction occurred in 2021, where the ratio dropped to 0.56, before rebounding sharply to a five-year high of 0.67 in 2022.
- Comparative Efficiency Analysis
- The Specialty segment consistently outperformed the General Rentals segment in terms of asset turnover across all five years. The efficiency gap widened significantly by 2022, as the Specialty segment achieved its highest turnover rate while General Rentals experienced a slight decline from its 2021 level. This indicates a superior capacity for the Specialty segment to generate revenue per unit of asset employed.
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Segment Asset Turnover: General rentals
United Rentals Inc.; General rentals; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | 8,584) | 7,351) | 6,699) | 7,436) | 6,550) |
| Total assets | 19,604) | 16,087) | 15,051) | 16,036) | 15,597) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.44 | 0.46 | 0.45 | 0.46 | 0.42 |
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
Segment asset turnover = Revenue ÷ Total assets
= 8,584 ÷ 19,604 = 0.44
The general rentals segment exhibits a pattern of growth punctuated by a brief contraction in 2020, with a subsequent period of aggressive asset expansion and revenue recovery through 2022.
- Revenue Performance
- Revenue increased from US$ 6,550 million in 2018 to US$ 8,584 million in 2022. A temporary decline occurred in 2020, where revenue fell to US$ 6,699 million, followed by a steady upward trajectory that culminated in a significant peak in 2022.
- Asset Base Growth
- Total assets grew from US$ 15,597 million in 2018 to US$ 19,604 million in 2022. Similar to revenue, there was a contraction in 2020 to US$ 15,051 million. The most substantial increase occurred between 2021 and 2022, where assets rose by approximately 21.8%, indicating a period of significant capital investment.
- Asset Turnover Analysis
- The segment asset turnover ratio remained relatively stable over the five-year period, oscillating within a narrow range of 0.42 to 0.46. After an initial improvement from 0.42 in 2018 to 0.46 in 2019, the ratio stayed consistent until 2022, when it declined slightly to 0.44. This recent decline suggests that the rapid expansion of the asset base in 2022 outpaced the growth in revenue, leading to a marginal decrease in the efficiency of asset utilization.
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Segment Asset Turnover: Specialty
United Rentals Inc.; Specialty; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | 3,058) | 2,365) | 1,831) | 1,915) | 1,497) |
| Total assets | 4,579) | 4,205) | 2,817) | 2,934) | 2,536) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.67 | 0.56 | 0.65 | 0.65 | 0.59 |
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
Segment asset turnover = Revenue ÷ Total assets
= 3,058 ÷ 4,579 = 0.67
The Specialty segment experienced significant growth in both revenue and asset scale between 2018 and 2022, though asset utilization efficiency fluctuated during this period.
- Revenue Trends
- Revenue demonstrated a strong overall upward trajectory, increasing from 1,497 million US dollars in 2018 to 3,058 million US dollars in 2022. A marginal contraction was observed in 2020, when revenue declined to 1,831 million US dollars from 1,915 million US dollars in 2019, before accelerating growth in the subsequent two years.
- Asset Base Expansion
- Total assets grew from 2,536 million US dollars in 2018 to 4,579 million US dollars in 2022. The most substantial expansion occurred between 2020 and 2021, during which assets increased by approximately 49%, rising from 2,817 million US dollars to 4,205 million US dollars.
- Segment Asset Turnover Analysis
- The asset turnover ratio exhibited volatility, moving from 0.59 in 2018 to a peak of 0.67 in 2022. While the ratio improved and stabilized at 0.65 during 2019 and 2020, a notable decrease to 0.56 occurred in 2021. This decline indicates that the significant investment in total assets during 2021 initially outpaced the growth in revenue. However, the recovery to 0.67 in 2022 suggests a successful optimization of the expanded asset base, resulting in the highest level of asset efficiency recorded in the five-year period.
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Segment Capital Expenditures to Depreciation
United Rentals Inc., capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 1.62 | 1.69 | 0.59 | 1.17 | 1.40 |
| Specialty | 1.82 | 1.29 | 0.53 | 1.07 | 1.19 |
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 capital expenditures to depreciation ratios for both reportable segments exhibit a synchronized V-shaped trend from 2018 through 2022. Both segments experienced a significant contraction in investment relative to depreciation during 2020, followed by a substantial recovery and expansion phase in 2021 and 2022.
- General Rentals
- The ratio began at 1.40 in 2018 and declined steadily to 1.17 in 2019, before dropping sharply to a period low of 0.59 in 2020. This indicates a phase where depreciation expenses significantly outweighed capital investments. A strong rebound occurred in 2021, with the ratio rising to 1.69, before stabilizing slightly at 1.62 by the end of 2022.
- Specialty
- A similar downward trajectory is observed, starting at 1.19 in 2018 and falling to 0.53 in 2020. However, the subsequent recovery in the Specialty segment was more aggressive than in General Rentals. The ratio increased to 1.29 in 2021 and continued its upward momentum to reach a five-year peak of 1.82 in 2022.
Comparatively, while both segments mirrored each other's volatility during the 2020 downturn, their growth trajectories diverged in the final two years. The Specialty segment transitioned from having a lower investment-to-depreciation ratio than General Rentals in 2018 to maintaining a higher ratio by 2022, suggesting a more intensive focus on asset expansion within the Specialty division during the most recent reporting period.
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Segment Capital Expenditures to Depreciation: General rentals
United Rentals Inc.; General rentals; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 2,868) | 2,719) | 969) | 1,967) | 1,980) |
| Depreciation and amortization expense | 1,765) | 1,611) | 1,633) | 1,681) | 1,410) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.62 | 1.69 | 0.59 | 1.17 | 1.40 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 2,868 ÷ 1,765 = 1.62
The analysis of the general rentals segment reveals significant volatility in capital investment relative to depreciation and amortization over the five-year period from 2018 to 2022. The most prominent feature of this period is a sharp contraction in investment in 2020, followed by a substantial expansion in 2021 and 2022.
- Capital Expenditure Trends
- Capital expenditures remained relatively stable between 2018 and 2019, hovering around US$ 1.9 billion. A precipitous decline occurred in 2020, with expenditures falling to US$ 969 million. This was followed by a rapid acceleration in spending, which rose to US$ 2.72 billion in 2021 and reached US$ 2.87 billion by the end of 2022.
- Depreciation and Amortization Stability
- In contrast to the volatility of capital expenditures, depreciation and amortization expenses exhibited a steadier progression. These expenses grew from US$ 1.41 billion in 2018 to US$ 1.77 billion in 2022, reflecting the ongoing consumption of the existing asset base regardless of the fluctuation in new investments.
- Asset Investment Ratio Analysis
- The ratio of capital expenditures to depreciation serves as a key indicator of whether the company is expanding or contracting its asset base. The ratio declined from 1.40 in 2018 to 1.17 in 2019, then dropped sharply to 0.59 in 2020, signifying a period where asset depreciation significantly outpaced new investment. A strong recovery followed, with the ratio climbing to 1.69 in 2021 and 1.62 in 2022, indicating an aggressive strategy of fleet expansion and asset replacement that exceeded the rate of depreciation.
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Segment Capital Expenditures to Depreciation: Specialty
United Rentals Inc.; Specialty; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 822) | 479) | 189) | 383) | 311) |
| Depreciation and amortization expense | 452) | 372) | 355) | 357) | 261) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.82 | 1.29 | 0.53 | 1.07 | 1.19 |
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
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization expense
= 822 ÷ 452 = 1.82
The Specialty segment exhibits a volatile investment cycle between 2018 and 2022, characterized by a period of stability, a sharp contraction, and a subsequent phase of aggressive expansion. Capital expenditures fluctuated significantly, while depreciation and amortization expenses maintained a more steady upward trajectory over the five-year period.
- Maintenance and Moderate Growth (2018–2019)
- During this period, the capital expenditures to depreciation ratio remained slightly above 1.0, moving from 1.19 to 1.07. This indicates that investments were sufficient to cover the depreciation of existing assets while allowing for modest growth in the segment's asset base.
- Investment Contraction (2020)
- A significant downturn is observed in 2020, where the ratio dropped to 0.53. This decline was driven by a sharp reduction in capital expenditures to 189 million US$, falling well below the depreciation expense of 355 million US$. This suggests a period of asset depletion where the company did not replace a substantial portion of its aging equipment.
- Accelerated Capital Deployment (2021–2022)
- A strong recovery followed the 2020 low, with the ratio climbing to 1.29 in 2021 and reaching 1.82 by 2022. The surge in capital expenditures, peaking at 822 million US$ in 2022, far outpaced the growth in depreciation expenses. This trend reflects a strategic shift toward aggressive fleet expansion and modernization, with investments nearly doubling the annual depreciation charge by the end of the period.
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Revenue
United Rentals Inc., revenue by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 8,584) | 7,351) | 6,699) | 7,436) | 6,550) |
| Specialty | 3,058) | 2,365) | 1,831) | 1,915) | 1,497) |
| Total | 11,642) | 9,716) | 8,530) | 9,351) | 8,047) |
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 revenue exhibited a general upward trajectory over the five-year period, increasing from US$ 8,047 million in 2018 to US$ 11,642 million in 2022. While a contraction was observed in 2020, where total revenue declined to US$ 8,530 million, the subsequent recovery in 2021 and 2022 demonstrated significant momentum, with the 2022 figures representing a 44.7% increase over the 2018 baseline.
- General Rental Segment Performance
- The general rentals segment serves as the primary revenue driver. Revenue in this category grew from US$ 6,550 million in 2018 to a peak of US$ 8,584 million in 2022. A notable decline occurred in 2020, with revenue dropping to US$ 6,699 million from US$ 7,436 million in 2019. However, the segment rebounded strongly in 2022, achieving its highest recorded value in the analyzed period.
- Specialty Segment Expansion
- The specialty segment displayed the most aggressive growth rate of the two segments. Revenue more than doubled over the period, rising from US$ 1,497 million in 2018 to US$ 3,058 million in 2022. Unlike the general rentals segment, the specialty segment showed greater resilience during the 2020 downturn, experiencing only a marginal decrease to US$ 1,831 million from US$ 1,915 million in 2019 before accelerating rapidly in the following two years.
- Revenue Mix and Segment Contribution
- A shift in the revenue composition is evident. In 2018, the specialty segment accounted for approximately 18.6% of total revenue. By 2022, this contribution increased to approximately 26.3%. This trend indicates a strategic expansion or a higher market demand for specialty equipment relative to general rental offerings, contributing significantly to the overall growth of the total revenue stream.
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Depreciation and amortization expense
United Rentals Inc., depreciation and amortization expense by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 1,765) | 1,611) | 1,633) | 1,681) | 1,410) |
| Specialty | 452) | 372) | 355) | 357) | 261) |
| Total | 2,217) | 1,983) | 1,988) | 2,038) | 1,671) |
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 depreciation and amortization expenses exhibited an overall upward trajectory between 2018 and 2022, increasing from 1,671 million US$ to 2,217 million US$. A significant surge occurred between 2018 and 2019, followed by a period of relative stability from 2020 to 2021, before reaching a five-year peak in 2022.
- General Rentals Segment
- The General Rentals segment represents the primary driver of total depreciation and amortization costs. Expenses rose sharply from 1,410 million US$ in 2018 to 1,681 million US$ in 2019. This was followed by a marginal decline over the next two years, reaching 1,611 million US$ by 2021, before increasing to 1,765 million US$ in 2022. This pattern suggests a period of capital investment followed by a phase of asset utilization or slower acquisition prior to the 2022 increase.
- Specialty Segment
- The Specialty segment demonstrated consistent growth in depreciation and amortization expenses over the analyzed period. Starting at 261 million US$ in 2018, expenses jumped to 357 million US$ in 2019 and maintained a steady upward climb to end at 452 million US$ in 2022. The growth in this segment was more linear and less volatile than that of the General Rentals segment, indicating a steady expansion of the specialty asset base.
- Segment Composition and Distribution
- General Rentals consistently accounted for the vast majority of the total expense burden, typically representing between 80% and 85% of the total depreciation and amortization. However, the Specialty segment's contribution grew in proportion over time, reflecting a strategic increase in the scale or value of specialty equipment relative to general rental assets.
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Equipment rentals gross profit
United Rentals Inc., equipment rentals gross profit by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 2,905) | 2,269) | 1,954) | 2,407) | 2,293) |
| Specialty | 1,340) | 998) | 765) | 800) | 670) |
| Total | 4,245) | 3,267) | 2,719) | 3,207) | 2,963) |
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 total gross profit for equipment rentals exhibited a sustained upward trajectory between 2018 and 2022, despite a temporary contraction in 2020. Total gross profit grew from 2,963 million US dollars in 2018 to 4,245 million US dollars in 2022, reflecting a significant expansion in profitability over the five-year period.
- General Rentals Segment Trends
- Gross profit within the general rentals segment experienced a period of volatility, increasing from 2,293 million US dollars in 2018 to 2,407 million US dollars in 2019, before falling to a period low of 1,954 million US dollars in 2020. A strong recovery followed, with a steady climb to 2,269 million US dollars in 2021 and a sharp increase to 2,905 million US dollars by 2022.
- Specialty Segment Trends
- The specialty segment demonstrated more aggressive and consistent growth compared to general rentals. Gross profit rose from 670 million US dollars in 2018 to 1,340 million US dollars in 2022, effectively doubling the segment's profit contribution over the analyzed timeframe. A marginal decrease was noted in 2020, but this was quickly offset by substantial gains in 2021 and 2022.
- Comparative Growth Analysis
- While general rentals continue to provide the largest absolute contribution to total gross profit, the specialty segment has shown a higher relative growth rate. The sharpest increase in total gross profit occurred between 2021 and 2022, during which both segments reached their five-year peaks, suggesting a broad-based recovery and expansion in rental demand.
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Capital expenditures
United Rentals Inc., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 2,868) | 2,719) | 969) | 1,967) | 1,980) |
| Specialty | 822) | 479) | 189) | 383) | 311) |
| Total | 3,690) | 3,198) | 1,158) | 2,350) | 2,291) |
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 capital expenditures exhibited significant volatility between 2018 and 2022, characterized by a severe contraction in 2020 followed by an aggressive expansion phase in the subsequent two years. Total spending reached a period low of 1,158 million US dollars in 2020 before surging to a peak of 3,690 million US dollars by the end of 2022.
- General Rentals Investment Patterns
- The General Rentals segment remains the primary driver of capital allocation. After maintaining a stable investment level of approximately 1,970 million US dollars between 2018 and 2019, expenditures plummeted by approximately 50% in 2020. However, a substantial recovery occurred in 2021, with spending rising to 2,719 million US dollars, and continuing upward to 2,868 million US dollars in 2022, representing a 44% increase over 2018 levels.
- Specialty Segment Growth Trajectory
- While smaller in absolute volume, the Specialty segment demonstrated the most significant relative growth toward the end of the period. Following a dip to 189 million US dollars in 2020, investments accelerated rapidly, reaching 822 million US dollars in 2022. This represents a 164% increase from the 311 million US dollars invested in 2018, suggesting a strategic shift toward expanding specialty capabilities.
- Segmental Allocation and Concentration
- A shift in the distribution of capital is observable. In 2018, the Specialty segment accounted for approximately 13.6% of total capital expenditures. By 2022, this proportion increased to approximately 22.3%, indicating that while General Rentals continues to dominate the expenditure profile, a larger share of growth capital is being directed toward the Specialty segment.
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Total assets
United Rentals Inc., total assets by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| General rentals | 19,604) | 16,087) | 15,051) | 16,036) | 15,597) |
| Specialty | 4,579) | 4,205) | 2,817) | 2,934) | 2,536) |
| Total | 24,183) | 20,292) | 17,868) | 18,970) | 18,133) |
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 assets across reportable segments exhibited a overall growth trajectory between 2018 and 2022, characterized by a temporary contraction in 2020 followed by an accelerated expansion phase. Total assets increased from 18,133 million US dollars in 2018 to 24,183 million US dollars by the end of 2022, representing a total growth of approximately 33.4% over the five-year period.
- General Rentals Segment Trends
- The General rentals segment remained the primary contributor to the total asset base. After a slight increase in 2019 and a decline to 15,051 million US dollars in 2020, the segment experienced significant growth. The most substantial increase occurred between 2021 and 2022, where assets rose from 16,087 million US dollars to 19,604 million US dollars, reflecting a year-over-year increase of approximately 21.8%.
- Specialty Segment Trends
- The Specialty segment demonstrated a more aggressive growth rate compared to General rentals. Assets grew from 2,536 million US dollars in 2018 to 4,579 million US dollars in 2022. A notable surge is observed between 2020 and 2021, where assets increased by nearly 49%, moving from 2,817 million US dollars to 4,205 million US dollars.
- Asset Composition and Diversification
- A shift in the asset mix is evident over the analyzed period. In 2018, the Specialty segment represented approximately 14% of total assets. By 2022, this proportion increased to approximately 19%. This indicates a strategic expansion in the Specialty segment's capacity relative to the core General rentals business.
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