Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting

Segment Reporting

NOTE 7. SEGMENT REPORTING

The Company's four reportable segments are (1) its modular building rental division ("Mobile Modular"); (2) its electronic test equipment rental division ("TRS-RenTelco"); (3) its containment solutions for the storage of hazardous and non-hazardous liquids and solids ("Adler Tanks"); and (4) its classroom manufacturing business selling modular buildings used primarily as classrooms in California ("Enviroplex"). The operations of each of these segments are described in Part I — Item 1, "Business", and the accounting policies of the segments are described in "Note 2 — Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. Management focuses on several key measures to evaluate and assess each segment's performance, including rental revenue growth, gross profit, income from operations and income before provision for income taxes. Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of direct revenues. Interest expense is allocated among Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of average rental equipment at cost, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. Summarized financial information for the six months ended June 30, 2011 and 2010 for the Company's reportable segments is shown in the following table:

(dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex  1			Consolidated
Six Months Ended June 30,
2011
Rental Revenues	$	39,566		$	45,611		$	25,967		$	—		$	111,144
Rental Related Services Revenues		11,321			1,402			5,156			—			17,879
Sales and Other Revenues		8,241			13,119			170			1,950			23,480
Total Revenues		59,128			60,132			31,293			1,950			152,503
Depreciation of Rental Equipment		6,849			18,836			3,752			—			29,437
Gross Profit		26,429			27,001			21,177			604			75,211
Selling and Administrative Expenses		15,599			12,606			7,317			1,681			37,203
Income (Loss) from Operations		10,830			14,395			13,860			(1,077	)		38,008
Interest Expense (Income) Allocation		1,854			972			717			(107	)		3,436
Income (Loss) before Provision for Income Taxes		8,976			13,423			13,143			(970	)		34,572
Rental Equipment Acquisitions		18,910			31,927			26,745			—			77,582
Accounts Receivable, net (period end)		36,591			21,711			16,882			3,646			78,830
Rental Equipment, at cost (period end)		529,056			260,563			159,756			—			949,375
Rental Equipment, net book value (period end)		378,689			106,970			146,859			—			632,518
Utilization (period end) 2		67.7	%		65.4	%		86.4	%
Average Utilization 2		67.2	%		65.3	%		85.4	%
2010
Rental Revenues	$	41,006		$	38,319		$	13,659		$	—		$	92,984
Rental Related Services Revenues		10,259			1,039			4,019			—			15,317
Sales and Other Revenues		6,161			10,648			52			3,091			19,952
Total Revenues		57,426			50,006			17,730			3,091			128,253
Depreciation of Rental Equipment		6,852			18,330			2,374			—			27,556
Gross Profit		28,075			18,774			10,239			1,222			58,310
Selling and Administrative Expenses		13,904			11,453			5,664			1,339			32,360
Income (Loss) from Operations		14,171			7,321			4,575			(117	)		25,950
Interest Expense (Income) Allocation		1,730			877			507			(99	)		3,015
Income (Loss) before Provision for Income Taxes		12,441			6,444			4,068			(18	)		22,935
Rental Equipment Acquisitions		12,465			18,879			27,004			—			58,348
Accounts Receivable, net (period end)		37,641			17,871			10,533			3,366			69,411
Rental Equipment, at cost (period end)		513,004			243,479			107,886			—			864,369
Rental Equipment, net book value (period end)		371,526			98,287			101,997			—			571,810
Utilization (period end) 2		67.9	%		67.0	%		70.5	%
Average Utilization 2		67.9	%		65.3	%		65.5	%

1 Gross Enviroplex sales revenues were $1,952 and $3,091 for the six months ended June 30, 2011 and 2010, respectively. In 2011, there were $2 of inter-segment sales to Mobile Modular, which were eliminated in consolidation. There were no inter-segment sales to Mobile Modular in 2010, which require elimination in consolidation.

2 Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding accessory equipment and, for Mobile Modular and Adler Tanks, excluding new equipment inventory. The Average Utilization for the period is calculated using the average costs of rental equipment.

No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2011 and 2010. In addition, total foreign country customers and operations accounted for less than 10% of the Company's revenues and long-lived assets for the same periods.