NOTE 10. SEGMENT REPORTING

FASB guidelines establish annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. In accordance with these guidelines the Company’s four reportable segments are Mobile Modular, TRS-RenTelco, Adler Tanks and Enviroplex. Management focuses on several key measures to evaluate and assess each segment’s performance including rental revenue growth, gross margin, 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 amongst Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of average rental equipment at cost, goodwill, 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 years ended December 31, 2017, 2016 and 2015, for the Company’s reportable segments is shown in the following tables:

Segment Data (dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex ¹		Consolidated
Year Ended December 31,
2017
Rental revenues	$	142,584		$	82,812		$	64,021		$	—	$	289,417
Rental related services revenues		50,448			2,858			24,762		—			78,068
Sales and other revenues		38,234			22,374			2,572			31,369		94,549
Total revenues		231,266			108,044			91,355			31,369		462,034
Depreciation of rental equipment		21,247			32,891			15,770		—			69,908
Gross profit		103,935			50,289			43,218			8,903		206,345
Selling and administrative expenses		55,583			22,171			29,542			4,309		111,605
Income from operations		48,352			28,118			13,676			4,594		94,740
Interest expense (income) allocation		(6,671	)		(2,320	)		(3,071	)		440		(11,622	)
Income before (benefit) provision for income taxes		41,681			26,132			10,605			5,034		83,452
Rental equipment acquisitions		34,526			58,781			4,800		—			98,107
Accounts receivable, net (period end)		59,274			19,581			18,663			8,354		105,872
Rental equipment, at cost (period end)		775,400			262,325			309,808		—			1,347,533
Rental equipment, net book value (period end)		543,857			109,482			208,981		—			862,320
Utilization (period end) ²		77.8	%		61.7	%		57.5	%
Average utilization ²		76.8	%		62.9	%		56.0	%

Segment Data (Continued) (dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex ¹			Consolidated
Year Ended December 31,
2016
Rental revenues	$	130,496		$	82,307		$	58,585		$	—		$	271,388
Rental related services revenues		49,206			2,846			23,807		—				75,859
Sales and other revenues		29,810			23,464			1,438			22,121			76,833
Total revenues		209,512			108,617			83,830			22,121			424,080
Depreciation of rental equipment		21,001			35,256			15,940		—				72,197
Gross profit		93,816			45,797			37,409			7,145			184,167
Selling and administrative expenses		51,432			21,896			27,610			3,970			104,908
Income from operations		42,384			23,901			9,799			3,175			79,259
Interest expense (income) allocation		(6,804	)		(2,465	)		(3,200	)		262			(12,207	)
Income before provision for income taxes		35,580			21,315			6,599			3,437			66,931
Rental equipment acquisitions		43,099			30,505			1,030		—				74,634
Accounts receivable, net (period end)		55,916			19,506			16,150			5,305			96,877
Rental equipment, at cost (period end)		744,099			245,700			306,701		—				1,324,057
Rental equipment, net book value (period end)		544,421			90,172			221,778		—				856,371
Utilization (period end) 2		77.3	%		61.0	%		50.7	%
Average utilization 2		76.6	%		60.6	%		50.1	%

2015
Rental revenues	$	115,986		$	89,208		$	68,502		$	—		$	273,696
Rental related services revenues		45,616			3,055			24,643		—				73,314
Sales and other revenues		22,682			22,754			1,486			10,612			57,534
Total revenues		184,284			115,017			94,631			10,612			404,544
Depreciation of rental equipment		19,246			39,974			15,993		—				75,213
Gross profit		78,771			47,836			47,397			2,903			176,907
Selling and administrative expenses		46,496			22,930			27,494			3,030			99,950
Income from operations		32,275			24,906			19,903			(127	)		76,957
Interest expense (income) allocation		(5,363	)		(2,194	)		(2,729	)		194			(10,092	)
Income before provision for income taxes		26,912			22,224			17,174			67			66,377
Rental equipment acquisitions		79,622			44,316			9,440		—				133,378
Accounts receivable, net (period end)		53,550			21,784			17,955			1,728			95,017
Rental equipment, at cost (period end)		736,875			262,945			310,263		—				1,310,083
Rental equipment, net book value (period end)		529,483			102,191			237,927		—				869,601
Utilization (period end) 2		76.9	%		58.7	%		49.7	%
Average utilization 2		75.8	%		60.5	%		58.3	%

Gross Enviroplex sales revenues were $31,369, $22,206 and $11,530 in 2017, 2016 and 2015, respectively, which includes inter-segment sales to Mobile Modular of $0, $85 and $918, which have been eliminated in consolidation.

Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment. 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 during 2017, 2016 and 2015. Revenue from foreign country customers accounted for 4%, 5% and 5% of the Company’s revenues for the same periods, respectively.