Company: MGRC
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023116
Chunk: 38

Company: MCGRATH RENTCORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 38
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 to related parties at such dates.

NOTE 16. SEGMENT REPORTINGDuring the quarter ended December 31, 2023, the Company determined that its Portable Storage business segment met the criteria for separate recognition as defined in the Accounting Standards Codification ("ASC") Topic 280, Segment Reporting.  The guidance under this topic requires a public business entity to evaluate both quantitative and qualitative thresholds to determine the significance of a business segment and whether the separate reporting of a business segment enhances the users' understanding of the reporting entity's performance, future net cash flows and judgments.  The Company evaluated the guidance within Topic 280 and made its determination to separately report the Portable Storage segment primarily due to the Company's continued growth in container fleet purchases and related increased revenues and improved profitability performance when compared to previously reported periods.  In addition to this determination, the Company also divested its Adler Tanks business segment during the year ended December 31, 2023.  Additional information regarding the divestiture of Adler Tanks can be found in Note 5 to the Consolidated Financial Statements.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, Portable Storage, TRS-RenTelco and Enviroplex.  The Company's Chief Operating Decision Maker ("CODM") Joe Hanna, Chief Executive Officer, and management  focus on several key measures to evaluate and assess each segment’s performance including rental, rental related services and sales revenue growth, segment profit, and income before provision for income taxes.  In addition to the evaluation of the aforementioned key measures of each reportable segment, the CODM and management evaluate supplemental information by reportable segment such as rental equipment acquisitions, fleet utilization, and average utilization to further assess segment performance and the future allocation of Company resources.  Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, Portable Storage and TRS-RenTelco, based on their pro-rata share of direct revenues.  Interest expense is allocated amongst Mobile Modular, Portable Storage and TRS-RenTelco 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 from continuing operations for the years ended December 31