What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-24 compared with 2025-04-24 · 292 added, 100 removed, 299 unchanged (57% of the section changed)

14 unchanged sentences

and (4) its classroom manufacturing business selling modular buildings used primarily as classrooms in California (“Enviroplex”).

In the three months ended March 31, 2025, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 66%, 15%, 17% and 2% of the Company’s income before provision for taxes (the equivalent of “pretax income”), respectively, compared to 63%, 23%, 16% and negative 2% for the same period in 2024.

In the six months ended June 30, 2025, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 63%, 14%, 16% and 7% of the Company’s income before provision for taxes (the equivalent of “pretax income”), respectively, compared to 62%, 24%, 12% and 2% for the same period in 2024.

The Company generates its revenues primarily from the rental of its equipment on operating leases and from sales of equipment occurring in the normal course of business.

18 unchanged sentences

Electronic test equipment revenues are primarily affected by the business activity within these industries related to research and development, manufacturing, and communication infrastructure installation and maintenance.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 79% and 80% of consolidated revenues in the three months ended March 31, 2025 and 2024, respectively.

Of the total rental operations revenues for the three months ended March 31, 2025, Mobile Modular, Portable Storage and TRS-RenTelco comprised 70%, 13% and 17%, respectively, compared to 67%, 15% and 18%, respectively, in the same period of 2024.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 74% and 75% of consolidated revenues in the six months ended June 30, 2025 and 2024, respectively.

Of the total rental operations revenues for the six months ended June 30, 2025, Mobile Modular, Portable Storage and TRS-RenTelco comprised 70%, 13% and 17%, respectively, compared to 68%, 15% and 17%, respectively, in the same period of 2024.

The Company’s direct costs of rental operations include depreciation of rental equipment, rental related service costs, impairment of rental equipment (if applicable), and other direct costs of rental operations (which include direct labor, supplies, repairs, insurance, property taxes, license fees, cost of sub-rentals and amortization of certain lease costs).

1 unchanged sentence

In addition, Enviroplex sells new modular buildings used primarily as classrooms in California.

For the three months ended March 31, 2025 and 2024, sales and other revenues of modular, container and electronic test equipment comprised approximately 21% and 20% of the Company’s consolidated revenues, respectively.

Of the total sales and other revenues from operations for the three months ended March 31, 2025 and 2024, Mobile Modular and Enviroplex together comprised 75% and 76%, respectively, Portable Storage comprised 4% in both periods, and TRS-RenTelco comprised 21% and 20%, respectively.

For the six months ended June 30, 2025 and 2024, sales and other revenues of modular, container and electronic test equipment comprised approximately 26% and 25% of the Company’s consolidated revenues, respectively.

Of the total sales and other revenues from operations for the six months ended June 30, 2025 and 2024, Mobile Modular and Enviroplex together comprised 82% and 81%, respectively, Portable Storage comprised 3% and 4%, respectively, and TRS-RenTelco comprised 15% in both periods.

The Company’s cost of sales includes the carrying value of the equipment sold and the direct costs associated with the equipment sold, such as delivery, installation, modifications and related site work.

Selling and administrative expenses primarily include personnel and benefit costs, which include share-based compensation, depreciation and amortization, bad debt expense, advertising costs, and professional service fees.

Transaction costs incurred by the Company in 2024 attributed to the terminated Merger Agreement with WillScot Mobile Mini were considered non-operating and excluded from Selling and administrative expenses.

The Company believes that sharing of common facilities, financing, senior management, and operating and accounting systems by all of the Company’s operations results in an efficient use of overhead.

2 unchanged sentences

Recent Developments

On February 19, 2025, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.485 per common share for the quarter ended March 31, 2025, an increase of 2% over the prior year’s comparable quarter.

On June 4, 2025, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.485 per common share for the quarter ended June 30, 2025, an increase of 2% over the prior year’s comparable quarter.

Business Outlook

5 unchanged sentences

Results of Operations

Three Months Ended March 31, 2025 Compared to

Three Months Ended March 31, 2024

Consolidated revenues for the three months ended March 31, 2025, increased $7.6 million, or 4%, to $195.4 million from $187.8 million for the same period in 2024.

Consolidated net income for the three months ended March 31, 2025, increased $5.4 million, or 23%, to $28.2 million from $22.8 million for the same period in 2024.

Earnings per diluted share for the three months ended March 31, 2025, increased 23% to $1.15, from $0.93 for the same period in 2024.

The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to an increase in gross profit on rental operations revenues at Mobile Modular and a reduction in interest expense incurred on outstanding debt obligations.

For the three months ended March 31, 2025, on a consolidated basis:

Three Months Ended June 30, 2025 Compared to

Three Months Ended June 30, 2024

Consolidated revenues for the three months ended June 30, 2025, increased 11% to $235.6 million, from $212.6 million for the same period in 2024.

Consolidated net income for the three months ended June 30, 2025, increased 74% to $36.0 million, from $20.6 million for the same period in 2024.

Earnings per diluted share for the three months ended June 30, 2025, increased by $0.62 to $1.46, compared to $0.84 for the same period in 2024.

The increase in net income and earnings per diluted share during the quarter was primarily attributed to an increase in gross profit on rental operations revenues at Mobile Modular and TRS-RenTelco, and an increase in gross profit on sales revenues at Enviroplex, lower interest expense incurred on outstanding debt obligations and $12.4 million in transaction costs incurred as a result of the terminated merger with WillScot Mobile Mini in 2024.

For the three months ended June 30, 2025, on a consolidated basis:

• Gross profit increased $7.3 million, or 7%, to $110.7 million in 2025.

Mobile Modular’s gross profit increased $3.6 million, or 6%, primarily due to higher gross profit on rental and rental related services revenues, partly offset by a reduction in gross profit on sales revenues.

Portable Storage's gross profit decreased $3.2 million, or 18%, primarily due to lower gross profit on rental and rental related services revenues.

TRS-RenTelco’s gross profit increased $1.0 million, or 7%, primarily due to higher gross profit on rental revenues.

Enviroplex’s gross profit increased $1.7 million, due to higher sales revenues and gross margins in 2025.

• Selling and administrative expenses increased 1% to $50.9 million.

• During the three months ended March 31, 2025, the Company had no reportable transactions under Other income, net on the condensed consolidated statements of income.

For the three months ended March 31, 2024, the Company had Other income, net of $9.3 million due to the net gain on sale of a property.

• During the three months ended March 31, 2024, the Company incurred $9.4 million in transaction costs related to the Merger Agreement with Willscot Mobile Mini that was terminated September 20, 2024.

These significant costs that did not recur during the three months ended March 31, 2025 are reported separately on the Company’s condensed consolidated statements of income.

• Interest expense decreased $4.5 million, or 35%, to $8.2 million, which was primarily attributed to $205.9 million lower average debt levels of the Company and a lower effective interest rate in 2025 of 5.70%, compared to 6.53% for the same period in 2024.

The 27% decrease in average debt when compared to 2024 was primarily attributed to lower rental equipment purchases in 2025 and the proceeds received in 2024 from the merger termination with WillScot Mobile Mini after transaction costs and income taxes.

Mobile Modular’s gross profit increased $1.9 million, or 3%, largely due to higher gross profit on rental operations revenues.

Portable Storage's gross profit decreased $1.3 million, or 8%, primarily due to lower gross profit on rental operations revenues.

TRS-RenTelco’s gross profit increased $3.4 million, or 26%, primarily due to higher gross profit on rental and sales revenues.

Enviroplex’s gross profit increased $3.2 million, due to higher sales revenue and an increase in sales margins in 2025.

• Selling and administrative expenses increased $4.5 million to $53.5 million, primarily due to a $2.5 million increase in marketing and administrative expenses and $2.0 million higher employees' salaries and benefit costs during the period.

• During the three months ended June 30, 2024, the Company incurred $12.4 million in transaction costs related to the Merger Agreement with Willscot Mobile Mini that was terminated September 20, 2024.

These significant costs that did not recur during the three months ended June 30, 2025, are reported separately on the Company’s condensed consolidated statements of income.

• Interest expense decreased $5.2 million to $7.8 million, which was primarily attributed to $232.4 million lower average debt levels of the Company and a lower effective interest rate in 2025 of 5.56%, compared to 6.57% for the same period in 2024.

The 29% decrease in average debt when compared to 2024 was primarily attributed to lower rental equipment purchases in 2025 and the proceeds received in 2024 from the terminated merger with WillScot Mobile Mini after transaction costs and income taxes.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 61%, 13% and 16%, respectively, compared to 65%, 21% and 8%, respectively, for the comparable 2024 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was 2% and negative 2% in 2025 and 2024, respectively.

• The provision for income taxes resulted in an effective tax rate of 24.6% and 23.6%, for the quarters ended March 31, 2025 and 2024, respectively.

Enviroplex pre-tax income contribution was 10% and 6% in 2025 and 2024, respectively.

• The provision for income taxes resulted in an effective tax rate of 27.3% and 28.8%, for the quarters ended June 30, 2025 and 2024, respectively.

• Adjusted EBITDA increased $2.9 million, or 3%, to $86.5 million in 2025.

Mobile Modular

For the three months ended March 31, 2025, Mobile Modular’s total revenues increased $4.3 million, or 3%, to $131.9 million compared to the same period in 2024, primarily due to higher rental related services and rental revenues, partly offset by lower sales revenues.

The total revenue increase, together with higher gross profit on rental and rental related services revenues, and lower interest expense, partly offset by a $6.2 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a $0.3 million increase in pre-tax income to $25.0 million for the three months ended March 31, 2025, from $24.7 million for the same period in 2024.

For the three months ended June 30, 2025, Mobile Modular’s total revenues increased $11.4 million, or 8%, to $156.0 million compared to the same period in 2024, primarily due to higher sales and rental operations revenues.

The revenue increase, together with higher gross profit on rental and rental related services revenues, partly offset by $3.5 million higher selling and administrative expenses, resulted in a $2.2 million increase in pre-tax income to $30.0 million for the three months ended June 30, 2025, from $27.9 million for the same period in 2024.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

17 unchanged sentences

Selling and administrative expenses 5

Other income, net

Income from operations

15 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant.

Due to this determination, the Company reclassified $6.4 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

Transaction costs incurred as a result of the terminated merger with WillScot Mobile Mini have been reclassified to the corporate segment and presented separately on the condensed consolidated statements of income for the period ended June 30, 2024.

nm = Not meaningful

Mobile Modular’s gross profit for the three months ended March 31, 2025, increased $3.6 million, or 6%, to $65.5 million.

For the three months ended March 31, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $2.0 million, or 3%, due to 4% higher average rental equipment on rent, partly offset by 1% lower average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 13% in both 2025 and 2024, and other direct costs were 27% in 2025 and 30% in 2024, which resulted in gross margin percentages of 60% in 2025, compared to 58% in 2024.

The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $3.2 million, or 7%, to $47.1 million in 2025.

Mobile Modular’s gross profit for the three months ended June 30, 2025, increased $1.9 million, or 3%, to $73.2 million.

For the three months ended June 30, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $3.9 million, or 5%, due to 2% higher average rental equipment on rent and 3% higher average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 13% in both 2025 and 2024, and other direct costs were 29% and 27% in 2025 and 2024, respectively, which resulted in gross margin percentages of 58% in 2025, compared to 60% in 2024.

The higher rental revenues, partly offset by lower rental margins, resulted in gross profit on rental revenues increasing $0.4 million, or 1%, to $47.2 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues increased $3.3 million, or 11%, compared to 2024.

The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services.

The increase in rental related services revenues and lower gross margin percentage of 33% in 2025, compared to 35% in 2024, resulted in rental related services gross profit increasing $1.4 million, or 17%, to $9.7 million in 2025.

• Gross Profit on Sales – Sales revenues decreased $2.8 million, or 11%, compared to 2024, due to lower new and used equipment sales.

The lower sales revenues, partly offset by the higher gross margin percentage of 32% in 2025, compared to 31% in 2024, resulted in gross profit on sales decreasing $0.8 million, or 10%, to $7.1 million.

The lower gross profit on sales in 2025 was primarily due to lower new and used equipment sales.

The increase in revenues accompanied by higher gross margin percentage of 36% in 2025, compared to 31% in 2024, resulted in rental related services gross profit increasing $2.6 million, or 29%, to $11.7 million in 2025.

• Gross Profit on Sales – Sales revenues increased $4.6 million, or 13%, compared to 2024, due to higher new and used equipment sales.

The lower gross margin percentage of 32% in 2025 compared to 38% in 2024, together with higher sales revenues, resulted in gross profit on sales decreasing $0.9 million, or 6%, to $12.9 million.

The lower gross margin on sales in 2025 was primarily due to a higher mix of new versus used sales.

Sales occur routinely as a normal part of Mobile Modular’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.

For the three months ended March 31, 2025, selling and administrative expenses increased $0.4 million, or 1%, to $34.0 million.

For the three months ended June 30, 2025, selling and administrative expenses increased $3.5 million, or 11%, to $36.8 million, primarily due to a $1.7 million increase in employees' salaries and benefit costs, $0.9 million higher allocated corporate expenses and $0.7 million higher marketing and administrative expenses.

Portable Storage

For the three months ended March 31, 2025, Portable Storage’s total revenues decreased $3.5 million, or 14%, to $21.3 million compared to the same period in 2024, primarily due to lower rental and rental related services revenues.

Lower gross profit on rental and rental related services revenues and a $1.3 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a decrease in pre-tax income of $3.8 million, or 41%, to $5.4 million in 2025.

For the three months ended June 30, 2025, Portable Storage’s total revenues decreased $0.7 million, or 3%, to $23.3 million compared to the same period in 2024, primarily due to lower rental and rental related services revenues.

Lower gross profit on rental and rental related services revenues, partly offset by lower allocated interest expense, resulted in a decrease in pre-tax income of $0.8 million, or 11%, to $6.6 million in 2025.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

18 unchanged sentences

Selling and administrative expenses 5

Other income, net

Income from operations

15 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant.

Due to this determination, the Company reclassified $1.2 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

nm = Not meaningful

Portable Storage’s gross profit for the three months ended March 31, 2025, decreased $3.2 million, or 18%, to $13.9 million.

For the three months ended March 31, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $2.3 million, or 13%, due to 10% lower average rental equipment on rent and 3% lower average monthly rental rates.

As a percentage of rental revenues, depreciation was 6% and 5% in 2025 and 2024, respectively, and other direct costs were 9% and 8% in 2025 and 2024, respectively, which resulted in gross margin percentage of 84% in 2025 and 87% in 2024.

The lower rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $2.5 million, or 15%, to $13.5 million in 2025.

Portable Storage’s gross profit for the three months ended June 30, 2025, decreased $1.3 million, or 8%, to $15.0 million.

For the three months ended June 30, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $0.9 million, or 5%, due to 5% lower average rental equipment on rent and comparable average monthly rental rates in 2025 as compared to 2024.

As a percentage of rental revenues, depreciation was 6% in both 2025 and 2024, and other direct costs were 11% and 9% in 2025 and 2024, respectively, which resulted in gross margin percentage of 83% and 86% in 2025 and in 2024, respectively.

The lower rental revenues and rental margins resulted in gross profit on rental revenues decreasing $1.3 million, or 9%, to $14.0 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues was $4.4 million, compared to $4.6 million during the same period in 2024.

The gross margin on rental related services revenues was negative 8% in 2025, compared to 6% in 2024.

The gross margin on rental related services revenues was 2% in 2025, compared to 4% in 2024.

The lower revenues coupled with lower gross margins in 2025, resulted in rental related services gross profit decreasing $0.1 million, when compared to 2024.

• Gross Profit on Sales – Sales revenues were comparable to 2024 at $1.2 million.

The comparable sales revenues and lower gross margins of 33% in 2025, compared to 37% in 2024, resulted in a comparable sales gross profit of $0.4 million in 2025.

• Gross Profit on Sales – Sales revenues increased $0.4 million, primarily due to higher used equipment sales.

The higher sales revenues and lower gross margins of 39% in 2025, compared to 43% in 2024, resulted in sales gross profit increasing $0.1 million, or 21%, to $0.7 million in 2025.

Sales occur routinely as a normal part of Portable Storage’s rental business;

however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.

For the three months ended March 31, 2025, Portable Storage’s selling and administrative expenses decreased $0.3 million, or 3%, to $7.6 million.

For the three months ended March 31, 2025, TRS-RenTelco’s total revenues increased $1.3 million to $35.0 million, compared to the same period in 2024, primarily due to higher sales revenues.

The total revenue increase, together with higher gross profit on rental revenues and lower interest expense, partly offset by a $1.7 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a comparable pre-tax income of $6.2 million for the three months ended March 31, 2025, when compared to 2024.

For the three months ended June 30, 2025, Portable Storage’s selling and administrative expenses increased $0.1 million, or 1%, to $7.5 million.

For the three months ended June 30, 2025, TRS-RenTelco’s total revenues increased $3.7 million, or 11%, to $36.4 million, compared to the same period in 2024, primarily due to higher sales and rental revenues.

Higher gross profit on rental and sales revenues, coupled with higher selling and administrative expenses and a decrease in allocated interest expense, resulted in an 86% increase in pre-tax income to $8.0 million for the three months ended June 30, 2025, from $4.3 million for the same period in 2024.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

17 unchanged sentences

Selling and administrative expenses 5

Income from operations

Interest expense allocation

Foreign currency exchange (gain) loss

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

nm = Not meaningful

TRS-RenTelco’s gross profit for the three months ended June 30, 2025 increased $3.4 million, or 26%, to $16.4 million.

For the three months ended June 30, 2025 compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $1.8 million, or 7%, depreciation expense decreased $1.5 million, or 14%, and other direct costs increased by $0.5 million, or 9%, resulting in a 32% increase in gross profit on rental revenues to $11.9 million.

As a percentage of rental revenues, depreciation was 36% and 44% in 2025 and 2024, respectively, and other direct costs were 21% and 20% in 2025 and 2024, respectively, which resulted in a gross margin percentage of 44% and 36% in 2025 and 2024, respectively.

The increase in rental revenues was primarily due to a 3% increase in average rental equipment on rent and 4% higher average monthly rental rates in 2025, as compared to 2024.

• Gross Profit on Sales – Sales revenues increased $1.9 million, or 32%, to $7.7 million in 2025.

Gross profit on sales increased $0.5 million, or 16%, to $3.6 million, with gross margin percentages of 47% and 54% in 2025 and 2024, respectively.

Sales occur as a normal part of TRS-RenTelco’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.

For the three months ended June 30, 2025, selling and administrative expenses increased $0.7 million, or 11%, to $7.3 million.

The increase was primarily attributed to $0.4 million higher employees' salaries and benefit costs when compared to 2024.

Six Months Ended June 30, 2025 Compared to

Six Months Ended June 30, 2024

Consolidated revenues for the six months ended June 30, 2025, increased 8% to $431.0 million, from $400.4 million for the same period in 2024.

Consolidated net income for the six months ended June 30, 2025, increased 48% to $64.2 million, from $43.5 million for the same period in 2024.

Earnings per diluted share for the six months ended June 30, 2025, increased $0.84 to $2.61, compared to $1.77 for the same period in 2024.

The increase in consolidated net income during the current period was primarily attributed to higher gross profit on rental operations and sales revenues and a $9.8 million reduction in interest expense incurred on outstanding debt obligations, partly offset by $5.0 million higher selling and administrative expenses.

In 2024 the Company reported Other income, net of $9.3 million from the sale of a corporate property and incurred $21.7 million in transaction costs attributed to the terminated merger with WillScot Mobile Mini, which further contributed to the current period increases in net income and diluted earnings per share as compared to 2024.

For the six months ended June 30, 2025, on a consolidated basis:

• Gross profit increased $10.5 million, or 5%, to $207.2 million in 2025.

Mobile Modular’s gross profit increased $5.6 million, or 4%, largely due to higher gross profit on rental operations revenues.

Portable Storage's gross profit decreased $4.4 million, or 13%, primarily due to lower gross profit on rental operations revenues.

TRS-RenTelco’s gross profit increased $4.4 million, or 16%, primarily due to higher gross profit on rental revenues.

Enviroplex’s gross profit increased $4.9 million due to higher sales revenue and an increase in sales margins in 2025.

• Selling and administrative expenses increased $4.9 million to $104.4 million, primarily due to $2.5 million higher employees' salaries and benefit costs and $2.3 million higher marketing and administrative expenses.

• During the six months ended June 30, 2024, the Company incurred $21.7 million in transaction costs related to the Merger Agreement with Willscot Mobile Mini that was terminated on September 20, 2024.

These significant costs that did not recur during the six months ended June 30, 2025 are reported separately on the Company’s condensed consolidated statements of income.

• Interest expense decreased $9.8 million to $16.0 million, which was primarily attributed to $215.2 million lower average debt levels of the Company and a lower effective interest rate in 2025 of 5.63% compared to 6.59% for the same period in 2024.

The 28% decrease in average debt when compared to 2024 was primarily the result of lower rental equipment purchases in 2025 and the $180.0 million payment received from the terminated merger with WillScot Mobile Mini, net of transaction costs and income taxes, which was primarily used to pay down existing debt obligations.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 63%, 14% and 16%, respectively, compared to 62%, 24% and 12%, respectively, for the comparable 2024 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was 7% and 2% in 2025 and 2024, respectively.

• The provision for income taxes resulted in an effective tax rate of 26.1% and 26.2%, for the periods ended June 30, 2025 and 2024, respectively.

• Adjusted EBITDA increased $5.3 million, or 3%, to $161.0 million in 2025.

Mobile Modular

For the six months ended June 30, 2025, Mobile Modular’s total revenues increased $15.8 million, or 6%, to $287.9 million compared to the same period in 2024, primarily due to higher rental operations and sales revenues.

The revenue increase, together with higher gross profit on rental operations revenues and lower allocated interest expense, partly offset by lower gross profit on sales revenues, resulted in a $2.5 million increase in pre-tax income to $55.0 million for the six months ended June 30, 2025, from $52.5 million for the same period in 2024.

Included within pre-tax income for the period ended June 30, 2024, was other income, net of $6.2 million which contributed to the period-over-period change.

In 2024, other income, net was comprised of an allocated net gain on sale of a corporate property.

Excluding other income, net, the total change in pre-tax income for 2025 was an increase of $8.7 million, or 19%.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

Mobile Modular – Six Months Ended 6/30/25 compared to Six Months Ended 6/30/24 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

1 unchanged sentence

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

nm = Not meaningful

Mobile Modular’s gross profit for the six months ended June 30, 2025, increased $5.6 million, or 4%, to $138.7 million.

For the six months ended June 30, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $5.9 million, or 4%, due to 3% higher average rental equipment on rent and 1% higher average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 13% in both 2025 and 2024, and other direct costs were 28% in both 2025 and 2024, which resulted in gross margin percentages of 59% in both periods.

The higher rental revenues and comparable rental margins, resulted in gross profit on rental revenues increasing $3.6 million, or 4%, to $94.3 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues increased $8.6 million, or 16%, compared to 2024.

The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services.

The increase in revenues accompanied by higher gross margin percentage of 35% in 2025, compared to 33% in 2024, resulted in rental related services gross profit increasing $4.0 million, or 23%, to $21.5 million in 2025.

• Gross Profit on Sales – Sales revenues increased $1.7 million, or 3%, compared to 2024, due to higher new and used equipment sales.

The lower gross margin percentage of 32% in 2025 compared to 35% in 2024, together with higher sales revenue, resulted in gross profit on sales decreasing $1.6 million, or 7%, to $20.0 million.

The lower gross margin on sales in 2025 was primarily due to a higher mix of new versus used sales.

Sales occur routinely as a normal part of Mobile Modular’s rental business;

For the six months ended June 30, 2025, selling and administrative expenses increased $3.9 million, or 6%, to $70.8 million, primarily due to a $1.5 million increase in employees' salaries and benefit costs and $1.3 million higher allocated corporate expenses.

Portable Storage

For the six months ended June 30, 2025, Portable Storage’s total revenues decreased $4.2 million, or 9%, to $44.6 million compared to the same period in 2024, primarily due to lower rental operations revenues, partly offset by higher sales revenues.

Lower gross profit on rental operations revenues, partly offset by $1.0 million lower allocated interest expense, resulted in a decrease in pre-tax income of $4.6 million, or 27%, to $12.0 million in 2025.

Included within pre-tax income for the period ended June 30, 2024, was other income, net of $1.3 million which contributed to the period-over-period change.

In 2024, other income, net was comprised of an allocated net gain on sale of a corporate property.

Excluding other income, net, the total change in pre-tax income for 2025 was a decrease of $3.2 million, or 21%.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

Portable Storage – Six Months Ended 6/30/25 compared to Six Months Ended 6/30/24 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Gross Profit (Loss)

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

Income from operations

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

nm = Not meaningful

Portable Storage’s gross profit for the six months ended June 30, 2025, decreased $4.4 million, or 13%, to $29.0 million.

For the six months ended June 30, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $3.2 million, or 9%, due to 2% lower average monthly rental rates and 7% lower average rental equipment on rent in 2025.

As a percentage of rental revenues, depreciation was 6% and 5% in 2025 and 2024, respectively, and other direct costs were 10% and 8% in 2025 and 2024, respectively, which resulted in gross margin percentage of 83% and 86% in 2025 and 2024, respectively.

The lower rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $3.8 million, or 12%, to $27.5 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues was $8.0 million, a decrease of $1.3 million compared to 2024.

The gross margin on rental related services revenues was negative 3% in 2025, compared to 5% in 2024.

The lower revenues coupled with lower gross margins in 2025, resulted in rental related services gross profit decreasing $0.6 million, when compared to 2024.

• Gross Profit on Sales – Sales revenues increased $0.5 million, primarily due to higher used equipment sales.

The higher sales revenues and lower gross margins of 36% in 2025, compared to 40% in 2024, resulted in sales gross profit increasing $0.1 million, or 8%, to $1.1 million in 2025.

Sales occur routinely as a normal part of Portable Storage’s rental business;

however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.

For the six months ended June 30, 2025, Portable Storage’s selling and administrative expenses decreased $0.2 million, or 1%, to $15.1 million.

For the six months ended June 30, 2025, TRS-RenTelco’s total revenues increased $5.0 million to $71.4 million, compared to the same period in 2024, primarily due to higher sales and rental revenues.

Higher gross profit on rental revenues and $1.7 million lower allocated interest expense resulted in a 35% increase in pre-tax income to $14.2 million for the six months ended June 30, 2025, from $10.5 million for the same period in 2024.

Included within pre-tax income for the period ended June 30, 2024, was other income, net of $1.7 million which contributed to the period-over-period change.

In 2024, other income, net was comprised of an allocated net gain on sale of a corporate property.

Excluding other income, net, the total change in pre-tax income for 2025 was an increase of $5.4 million, or 62%.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

TRS-RenTelco – Six Months Ended 6/30/25 compared to Six Months Ended 6/30/24 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

Income from operations

Interest expense allocation

Foreign currency exchange (gain) loss

14 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant.

Due to this determination, the Company reclassified $1.7 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

nm = Not meaningful

TRS-RenTelco’s gross profit for the three months ended March 31, 2025 increased $1.0 million, or 7%, to $14.9 million.

For the three months ended March 31, 2025 compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $0.1 million, depreciation expense decreased $1.6 million, or 14%, and other direct costs increased by $0.4 million, or 9%, resulting in a 14% increase in gross profit on rental revenues to $10.3 million.

TRS-RenTelco’s gross profit for the six months ended June 30, 2025 increased $4.4 million, or 16%, to $31.2 million.

For the six months ended June 30, 2025 compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $1.9 million, or 4%, depreciation expense decreased $3.1 million, or 14%, and other direct costs increased by $0.9 million, or 9%, resulting in a 23% increase in gross profit on rental revenues to $22.2 million.

As a percentage of rental revenues, depreciation was 37% and 45% in 2025 and 2024, respectively, and other direct costs were 21% and 20%, in 2025 and 2024, respectively, which resulted in a gross margin percentage of 42% and 36% in 2025 and 2024, respectively.

The increase in rental revenues was primarily due to a 1% increase in average rental equipment on rent and 3% higher average monthly rental rates in 2025, as compared to 2024.

• Gross Profit on Sales – Sales revenues increased $3.0 million, or 24%, to $15.7 million in 2025.

Gross profit on sales decreased $0.2 million, or 4%, to $3.7 million, with a lower gross margin percentage of 47% in 2025, compared to 57% in 2024.

Gross profit on sales was $7.3 million, an increase of $0.4 million, or 5%, compared to 2024, with a lower gross margin percentage of 47% in 2025, compared to 55% in 2024.

Sales occur as a normal part of TRS-RenTelco’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.

For the three months ended March 31, 2025, selling and administrative expenses increased $0.2 million, or 3%, to $7.4 million.

For the six months ended June 30, 2025, selling and administrative expenses increased $0.9 million, or 7%, to $14.8 million.

The increase was primarily attributed to $0.6 million higher employees' salaries and benefit costs when compared to 2024.

Adjusted EBITDA

16 unchanged sentences

Three Months Ended

Six Months Ended

Twelve Months Ended

10 unchanged sentences

Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues for the period.

Transaction costs include merger and acquisition related legal and professional fees and other costs specific to these transactions.

Transaction costs include acquisition and divestiture related legal and professional fees and other costs specific to these transactions.

Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.

The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA.

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

1 unchanged sentence

Three Months Ended

Six Months Ended

Twelve Months Ended

11 unchanged sentences

Adjusted EBITDA 1

Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation and non-operating transactions.

Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation, other income, net and non-operating transactions.

Adjusted EBITDA is a component of two restrictive financial covenants for the Company’s unsecured Credit Facility, the Note Purchase Agreement, Series D Senior Notes, Series E Senior Notes and Series F Senior Notes (as defined and more fully described under the heading “Liquidity and Capital Resources” in this MD&A).

1 unchanged sentence

• Permit the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility and the Note Purchase Agreement (as defined and more fully described under the heading “Liquidity and Capital Resources” in this MD&A)) of Adjusted EBITDA (as defined in the Credit Facility and the Note Purchase Agreement) to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

At June 30, 2025, the actual ratio was 3.59 to 1.

• Permit the Consolidated Leverage Ratio of funded debt (as defined in the Credit Facility and the Note Purchase Agreement) to Adjusted EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2025, the actual ratio was 1.60 to 1.

At June 30, 2025, the Company was in compliance with each of the aforementioned covenants.

There are no anticipated trends that the Company is aware of that would indicate non-compliance with these covenants, although, significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

1 unchanged sentence

The Company’s rental businesses are capital intensive and generate significant cash flows.

Cash flows for the Company for the three months ended March 31, 2025 compared to the same period in 2024 are summarized as follows:

Cash flows for the Company for the six months ended June 30, 2025 compared to the same period in 2024 are summarized as follows:

Cash Flows from Operating Activities:

The Company’s operations provided net cash of $109.7 million in 2025, compared to $138.6 million in 2024.

The $5.5 million decrease in net cash provided by operating activities was primarily attributable to $24.3 million lower cash provided due to a reduction in accounts payable, a result of the payment timing of rental equipment acquisitions and other trade accounts payable.

In addition, the Company's inventories provided for $6.3 million higher cash flows in 2025, compared to 2024, primarily due to lower rental equipment manufacturing in progress when compared to the same period in 2024.

Finally, the Company's prepaid expenses and other assets provided $5.7 million higher cash flows in 2025, compared to 2024, primarily as a result of lower prepaid income taxes.

The $28.9 million decrease in net cash provided by operating activities was primarily attributable to a $31.6 million decrease in accounts payable as a result of the payment timing of rental equipment acquisitions and other trade accounts payable.

In addition, accounts receivable increased $24.4 million due to higher customer billings compared to related cash payments in 2025.

Finally, the Company's inventories provided $14.8 million in operating cash flows during 2025 due to a higher usage of purchased inventories during 2025.

Cash Flows from Investing Activities:

Net cash used in investing activities was $61.6 million in 2025, down from $133.9 million in 2024.

The $75.4 million decrease in net cash used was primarily due to $67.1 million lower rental equipment purchases when compared to the previous year, due to the higher rental equipment acquisitions in the first quarter of 2024 to meet customer rental demand.

Further, the Company had $21.3 million and $12.3 million lower purchases and proceeds of property, plant and equipment in 2025, respectively, which was primarily attributed to decreased land and building purchases during the year, and the sale of a corporate property in 2024.

The $72.3 million decrease in net cash used was primarily due to $95.1 million lower rental equipment purchases when compared to the previous year, due to higher equipment acquisitions during 2024 to meet customer rental demand.

This decrease in investing activities was partly offset by a $22.0 million increase in cash paid for the acquisition of businesses during 2025.

Cash Flows from Financing Activities:

Net cash used in financing activities was $48.6 million in 2025, compared to $19.7 million in net cash provided during 2024.

The $68.3 million change was largely attributed to reduced borrowings under bank lines of credit, primarily as a result of lower rental equipment purchases during the period, when compared to 2024.

Net cash used in financing activities was $47.4 million in 2025, compared to $3.8 million of cash provided in 2024.

The $51.2 million change was primarily attributable to the $75.0 million of borrowings under term note

agreements in 2024 and $26.0 million lower net payments under bank lines of credit in 2025.

The $49.0 million lower net borrowings was primarily the result of lower rental equipment purchases during the period, compared to 2024.

Significant capital expenditures are required to maintain and grow the Company’s rental assets.

5 unchanged sentences

On July 15, 2022, the Company entered into an amended and restated credit agreement with Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and lender, and other lenders named therein (the “Credit Facility”).

The Credit Facility provides for a $650.0 million unsecured revolving credit facility (which may be further increased to $950.0 million, of which as of Mach 31, 2025, $73.0 million was utilized through the term loan entered on April 23, 2024, by adding one or more tranches of term loans and/or increasing the aggregate revolving commitments), which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

The Credit Facility provides for a $650.0 million unsecured revolving credit facility (which may be further increased to $950.0 million, of which $75.0 million was utilized through the term loan entered on April 23, 2024, by adding one or more tranches of term loans and/or increasing the aggregate revolving commitments), which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

The proceeds of the Credit Facility are available to be used for general corporate purposes, including permitted acquisitions.

The Credit Facility permits the Company’s existing indebtedness to remain, which includes the Company’s $20.0 million Treasury Sweep Note due July 15, 2027, the Company’s existing senior notes issued pursuant to the Note Purchase and Private Shelf Agreement with Prudential Investment Management, Inc., dated as of April 21, 2011 (as amended):

(i) the $60.0 million aggregate outstanding principal of notes issued November 5, 2015 and due November 5, 2022, (ii) the $40.0 million aggregate outstanding principal of notes issued March 17, 2021 and due March 17, 2028, and (iii) the $60.0 million aggregate outstanding principal of notes issued June 16, 2021 and due June 16, 2026.

The Credit Facility permits the Company’s existing indebtedness to remain, which includes the Company’s $20.0 million Treasury Sweep Note due July 15, 2027 and the Company’s existing senior notes issued pursuant to the Note Purchase and Private Shelf Agreement with Prudential Investment Management, Inc., dated as of April 21, 2011 (as amended, the "Prior NPA") comprised of (i) the $40.0 million aggregate outstanding principal of notes issued March 17, 2021 and due March 17, 2028, and (ii) the $60.0 million aggregate outstanding principal of notes issued June 16, 2021 and due June 16, 2026.

The Prior NPA was amended and restated, and superseded in its entirety, by the Note Purchase Agreement (as defined and more fully described under the heading "Liquidity and Capital Resources - Note Purchase and Private Shelf Agreement" in this MD&A).

In addition, the Company may incur additional senior note indebtedness in an aggregate amount not to exceed $250.0 million.

9 unchanged sentences

Concurrently with entry into the First Incremental Amendment, the Company repaid revolving loans issued under the Credit Agreement in an aggregate amount equal to approximately $75.0 million.

At March 31, 2025, under the Credit Facility and Sweep Service Facility, the Company had unsecured lines of credit that permit it to borrow up to $650.0 million of which $311.5 million was outstanding and had capacity to borrow up to an additional $338.5 million.

At June 30, 2025, under the Credit Facility and Sweep Service Facility, the Company had unsecured lines of credit that permit it to borrow up to $650.0 million, of which $324.7 million was outstanding and had capacity to borrow up to an additional $325.3 million.

The Credit Facility contains financial covenants requiring the Company to not (all defined terms used below not otherwise defined herein have the meaning assigned to such terms in the Credit Facility):

• Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than 2.50 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

At June 30, 2025, the actual ratio was 3.59 to 1.

• Permit the Consolidated Leverage Ratio at any time during any period of four consecutive fiscal quarters to be greater than 2.75 to 1.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2025, the actual ratio was 1.60 to 1.

At June 30, 2025, the Company was in compliance with each of the aforementioned covenants.

There are no anticipated trends that the Company is aware of that would indicate non-compliance with these covenants, although significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

1 unchanged sentence

On June 8, 2023, the Company entered into a Second Amended and Restated Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) with PGIM, Inc.

(“PGIM”) and the holders of Series D and Series E Notes previously issued pursuant to the Prior Amended and Restated NPA, among the Company and the other parties to the Note Purchase Agreement.

(“PGIM”) and the holders of Series D and Series E Notes previously issued pursuant to the Prior NPA.

The Note Purchase Agreement amended and restated, and superseded in its entirety, the Prior NPA.

5 unchanged sentences

6.25% Senior Notes Due in 2030

On September 27, 2023, the Company issued and sold to the purchasers $75.0 million aggregate principal amount of 6.25% Series F Notes (the “Series F Senior Notes”) pursuant to the terms of the Second Amended and Restated Note Purchase and Private Shelf Agreement, dated June 8, 2023 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

The Series F Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 6.25% per annum and mature on September 27, 2030.

Interest on the Series F Senior Notes is payable semi-annually beginning on March 27, 2024 and continuing thereafter on September 27 and March 27 of each year until maturity.

Interest on the Series F Senior Notes became payable semi-annually beginning on March 27, 2024 and continuing thereafter on September 27 and March 27 of each year until maturity.

The principal balance is due when the notes mature on September 27, 2030.

The full net proceeds from the Series F Senior Notes will primarily be used to fulfill the income tax obligations incurred from the divestiture of Adler Tanks.

At March 31, 2025, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

At June 30, 2025, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

2.57% Senior Notes Due in 2028

On March 17, 2021, the Company issued and sold to the purchasers $40.0 million aggregate principal amount of 2.57% Series D Notes (the “Series D Senior Notes”) pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

The Series D Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 2.57% per annum and mature on March 17, 2028.

2 unchanged sentences

The full net proceeds from the Series D Senior Notes were used to pay off the Company’s $40 million Series B Senior Notes.

At March 31, 2025, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

At June 30, 2025, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

2.35% Senior Notes Due in 2026

On June 16, 2021, the Company issued and sold to the purchasers $60.0 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

On June 16, 2021, the Company issued and sold to the purchasers $60.0 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Prior NPA.

The Series E Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 2.35% per annum and mature on June 16, 2026.

2 unchanged sentences

The full net proceeds from the Series E Senior Notes were used to pay down the Company’s credit facility.

At March 31, 2025, the principal balance outstanding under the Series E Senior Notes was $60.0 million.

At June 30, 2025, the principal balance outstanding under the Series E Senior Notes was $60.0 million.

Among other restrictions, the Note Purchase Agreement, which has superseded in its entirety the Prior NPA, under which the Series D Senior Notes, Series E Senior Notes and Series F Senior Notes were sold, contains financial covenants requiring the Company

1 unchanged sentence

• Permit the Consolidated Fixed Charge Coverage Ratio of EBITDA to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

At June 30, 2025, the actual ratio was 3.59 to 1.

• Permit the Consolidated Leverage Ratio of funded debt to EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2025, the actual ratio was 1.60 to 1.

At June 30, 2025, the Company was in compliance with each of the aforementioned covenants.

3 unchanged sentences

Critical Accounting Estimates

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the three month period ended March 31, 2025.

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the six month period ended June 30, 2025.

Refer to our 2024 Annual Report for a discussion of our critical accounting policies and estimates.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis